Merck posts $16.3bn quarter

Merck’s quarter was strong in the way big drug-company quarters usually matter most — the core business kept growing, but the accounting told a rougher story. Revenue came in at $16.3 billion for the first quarter of 2026, ahead of Wall Street expectations, powered again by cancer drugs, animal health, and newer launches. But Merck still posted a GAAP loss because it booked a huge charge tied to its Cidara acquisition. That split is the whole story here — the business looked healthy, while the portfolio rebuild got expensive. (merck.com) ### Why did the quarter look good? Because the biggest engine is still running. Keytruda and Keytruda QLEX together generated $8.0 billion in the quarter, up 12%, and Merck also got a big lift from Winrevair, which brought in $525 million, plus animal health sales of $1.8 billion. Total company sales rose 5%, or 3% excluding currency effects, which is solid for a company this size. (merck.com) ### So why was there a loss? Because Merck chose to spend heavily now to protect itself later. The company recorded a $9.0 billion charge related to its acquisition of Cidara Therapeutics, and that charge was large enough to push quarterly results to a GAAP loss of $1.72 per share and a non-GAAP loss of $1.28 per share. CNBC noted the company’s net loss was $4.24 billion for the quarter, versus net income a year earlier. (cnbc.com) ### What is Cidara doing in this story? Cidara is basically part of Merck’s scramble to build the next wave before Keytruda’s exclusivity starts to weaken. Merck agreed in November 2025 to buy Cidara for nearly $9.2 billion, paying $221.50 a share for a biotech centered on an experimental flu-prevention drug. That is not a bolt-on deal. It is a very e(cnbc.com)nings. (stocktitan.net) ### Did guidance actually improve? Yes — but in a careful, slightly hedged way. Merck narrowed its 2026 sales range to $65.8 billion to $67.0 billion, lifting the low end from $65.5 billion, and raised its adjusted earnings outlook to $5.04 to $5.16 a share from $5.00 to $5.15. The company also said this outlook do(stocktitan.net) May and bring another one-time charge of about $5.8 billion. (merck.com) ### Why does Terns matter too? Because Merck is not making one defensive move — it is making several at once. The Terns deal would expand its hematology pipeline with TERN-701, a candidate for chronic myeloid leukemia. Put simply, Merck is using today’s cash flows from Keytruda to buy tomorrow’s growth drivers before the patent cliff gets too close. (merck.com) ### Is this still a Keytruda story? Mostly, yes. Merck keeps talking about diversification, and the newer assets are real, but Keytruda is still doing an enormous amount of the work. When one franchise contributes roughly half of quarterly sales(merck.com)exactly that context, alongside looming generic competition for older products like Januvia and Janumet. (cnbc.com) ### What should investors take from this? The clean read is that Merck’s operating business held up well, and maybe even better than expected. The messier read is that staying strong after Keytruda will cost a lot of money, and those costs are landing now. ### Bottom line This was a good quarter hidden inside ugly accounting. Merck beat on revenue, (cnbc.com)company also showed how expensive the post-Keytruda transition is going to be. (merck.com)