Merck Faces Future Challenges Despite Current Success

Merck & Co forecasts lower 2026 sales and profits due to post-patent challenges for key drugs like Januvia, despite strong performance from Keytruda. The company's proactive measures include acquisitions and focusing on new treatments. Sales achieved $16.4 billion in Q4, with revenue growth driven by Keytruda.

On Tuesday, Merck & Co predicted that its 2026 sales and profits would fall short of Wall Street expectations due to the impact of losing patent exclusivity on drugs like Januvia. This grim forecast overshadowed a strong fourth-quarter report where the company's revenue was bolstered by the successful cancer drug Keytruda.

The pharmaceutical giant's shares dipped by 1.2% in premarket trading, with projections placing 2026 revenue between $65.5 billion and $67.0 billion, slightly missing the average analyst estimate. CEO Rob Davis highlighted legacy products going off patent as a key issue, but he remains confident in the company's strategic direction.

Merck's adjusted Q4 profit was $2.04 per share, surpassing estimates. Keytruda alone generated $8.37 billion in sales, counteracting a decline in their Gardasil vaccine. As part of its strategy, Merck acquired Cidara Therapeutics and Verona Pharma to diversify its drug offerings as Keytruda faces its own patent expiry challenges.

(With inputs from agencies.)