Earnings release
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NEWS RELEASE Merck & Co., Inc., Rahway, N.J., USA Announces Third- Quarter 2026 Financial Results; Highlights Multiple Milestones Advancing Broad, Diverse Pipeline 2026-10-29 Sales Growth Re ects Continued Strength in Oncology and Animal Health, Plus Contributions From Other Products in Broader Portfolio, Including WINREVAIR Financial Highlights Total Worldwide Sales Were $18.1 Billion (5% Growth; 4% Growth ex-FX) KEYTRUDA/KEYTRUDA QLEX1 Sales Were $8.6 Billion (6% Growth; 6% Growth ex-FX); Includes KEYTRUDA QLEX Sales of $830 Million WINREVAIR Sales Were $694 Million (93% Growth; 94% Growth ex-FX) Animal Health Sales Were $1.7 Billion (4% Growth; 3% Growth ex-FX) GAAP EPS Was $2.04; Non-GAAP EPS Was $2.49; GAAP and Non-GAAP EPS Include a One-Time Charge of $0.12 per Share Related to a Global License Agreement With SciBrunch Pipeline & Portfolio Highlights Presented First-Time Pivotal Data From Phase 3 Trials Across Robust Oncology Pipeline at ESMO Congress 2026, Including: TroFuse-005 Trial Evaluating Sacituzumab Tirumotecan (sac-TMT) in Certain Patients With Advanced or Recurrent Endometrial Cancer; U.S. FDA Accepted for Priority Review a Biologics License Application Based on These Data 1
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INTerpath-001 Trial Evaluating Intismeran Autogene Plus KEYTRUDA as Adjuvant Treatment for Patients With Resected Stage IIB-IV Melanoma, in Collaboration With Moderna Announced Positive Phase 2b Results in Moderate to Severe Hidradenitis Suppurativa From Clinical Study of Investigational Immunology Candidate Tulisokibart Presented One-Year Results From Phase 2b/3 BRUNELLO Trial Evaluating Remigromig in Adults With Diabetic Macular Edema Full-Year 2026 Financial Outlook Narrows and Raises the Midpoint of Worldwide Sales Range; Now Expects Sales To Be Between $66.8 Billion and $67.3 Billion Narrows and Raises Expected Non-GAAP EPS Range To Be Between $2.77 and $2.82; Outlook Now Includes One-Time Charge of $0.12 per Share Related to the Global License Agreement With SciBrunch RAHWAY, N.J.--(BUSINESS WIRE)-- Merck & Co., Inc., Rahway, N.J., USA (NYSE: MRK), known as MSD outside the United States and Canada, today announced nancial results for the third quarter of 2026. “Our science-led strategy is transforming our business,” said Robert M. Davis, chairman and chief executive o cer. “The potentially practice-changing advances in oncology presented at last weekend’s ESMO meeting, including new data for our antibody-drug conjugate sac-TMT and the rst Phase 3 validation of a therapeutic cancer vaccine, further clinically de-risk the substantial long-term opportunity of our late-phase pipeline. With positive momentum across multiple therapeutic areas, I’m increasingly con dent in our ability to deliver long-term value for patients and shareholders.” Financial Summary $ in millions, except EPS amounts Third Quarter 2026 2025 Change Change Ex- Exchange Sales $18,085$17,2765% 4% GAAP net income2 5,065 5,785 -12% -14% Non-GAAP net income that excludes certain items2,3* 6,159 6,448 -4% -5% GAAP EPS 2.04 2.32 -12% -13% Non-GAAP EPS that excludes certain items3* 2.49 2.58 -3% -5% *Refer to table on page 7. For the third quarter of 2026, Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $2.04 and non-GAAP EPS was $2.49. Both GAAP and non-GAAP EPS in the third quarter of 2026 include a one-time charge of $0.12 per share related to a global license agreement with SciBrunch Therapeutics Co., Ltd. 2
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(SciBrunch). Both GAAP and non-GAAP EPS in the third quarter of 2025 include a charge of $0.10 per share for a milestone payment to LaNova Medicines Ltd. (LaNova, acquired by Sino Biopharmaceutical Limited) associated with the technology transfer for MK-2010. Non-GAAP EPS excludes acquisition- and divestiture-related costs and costs related to restructuring programs, as well as income and losses from investments in equity securities. Non-GAAP EPS in the third quarter of 2025 also excludes tax expense relating to audit reserve adjustments. Year-to-date results can be found in the attached tables. Third-Quarter Sales Performance The following table re ects sales of the Company’s top products and signi cant performance drivers. Third Quarter $ in millions2026 2025 Change Change Ex- Exchange Commentary Total Sales $18,085$17,2765% 4% Pharmaceutical16,26815,611 4% 4% Increase primarily driven by growth inKEYTRUDA/KEYTRUDA QLEX, WINREVAIR,GARDASIL/GARDASIL 9, WELIREG, ENFLONSIA and theinclusion of OHTUVAYRE sales. Growth bene ted fromthe timing of purchases by approximately $550 million.Growth was partially o set by declines in BRIDION,JANUVIA/JANUMET and LAGEVRIO, as well as loweralliance revenue related to Koselugo. KEYTRUDA/ KEYTRUDA QLEX8,601 8,147 6% 6% Growth primarily driven by strong global uptake inearlier-stage indications including triple-negative breastcancer, cervical cancer, head and neck cancer andbladder cancer, as well as higher global demand inmetastatic indications, including urothelial cancer.Timing of wholesaler purchases unfavorably a ectedsales in the U.S. but was largely o set by a bene t fromincreased inventory in the channel. Sales of KEYTRUDAQLEX were $830 million. GARDASIL/ GARDASIL 91,995 1,749 14% 14% Increase primarily due to higher sales in the U.S.re ecting favorable public-sector purchasing patternsand higher net pricing. PROQUAD, M-M-RII and VARIVAX730 684 7% 7%Increase primarily due to higher demand in certainEuropean markets. WINREVAIR694 360 93% 94% Growth primarily re ects higher demand and favorablewholesaler and specialty pharmacy purchasing patternsin the U.S., as well as launch uptake in certaininternational markets, particularly in Europe and Japan. JANUVIA/JANUMET380 624 -39% -39% Decline primarily driven by lower demand due togeneric competition following loss of market exclusivityin the U.S. Lynparza* 352 379 -7% -7%Decline primarily due to lower net pricing in the U.S. andlower demand and pricing in China. PREVYMIS 347 266 30% 31%Increase primarily due to higher demand globally. WELIREG 307 196 56% 58% Growth primarily driven by higher demand in the U.S.and continued launch uptake in international markets,particularly in Japan. Lenvima* 287 258 11% 11%Growth primarily due to higher demand in the U.S. CAPVAXIVE 263 244 8% 7% Increase primarily driven by launch uptake in severalinternational markets, particularly in Asia Paci c andEurope, partially o set by lower sales in the U.S.re ecting lower adult pneumococcal vaccination ratesand lower net pricing. 187 79 138% 136% Increase primarily driven by seasonal demand andassociatedinventorybuildintheU.S.andcertain 3
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ENFLONSIA187 79 138% 136%associated inventory build in the U.S. and certaininternational markets. OHTUVAYRE184 - - -Product obtained as part of the Company's October2025 acquisition of Verona Pharma plc. BRIDION 144 439 -67% -67% Decline primarily driven by lower demand in the U.S.due to generic competition following loss of marketexclusivity. LAGEVRIO 17 138 -88% -88%Decline largely due to lower demand in Japan. Animal Health1,676 1,615 4% 3%Growth attributable to both Livestock and CompanionAnimal product portfolios. Livestock 1,048 1,023 2% 2%Growth primarily driven by higher demand for poultryproducts. CompanionAnimal 628 592 6% 6% Growth largely driven by new product launches. Sales ofBRAVECTO line of products were $264 million and $262million in the current and prior-year quarters,respectively, which represents an increase of 1%, or atexcluding impact of foreign exchange. Other Revenues**141 50 185% -25% Increase primarily due to favorable impact of revenue-hedging activities, partially o set by lower revenue fromthird-party manufacturing arrangements. *Alliance revenue for this product represents the Company’s share of pro ts, which are product sales net of cost of sales and commercialization costs.**Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues,including revenue-hedging activities. In addition, Koselugo alliance revenue was $13 million in the third quarter of 2026 compared with $214 million in the third quarter of 2025. The decrease was due to an amendment to the collaboration agreement with AstraZeneca in 2025, which discontinued the provisions whereby the Company shared revenue and costs with AstraZeneca, and revised the payment structure, resulting in the Company’s recognition of a $150 million upfront payment and a $50 million regulatory milestone in the third quarter of 2025. Third-Quarter Expense and Related Information The table below presents selected expense information. $ in millions GAAP Acquisition- and Divestiture- Related Costs4 Restructuring Costs (Income) Loss From Investments in Equity Securities Non- GAAP3 Third Quarter 2026 Cost of sales $4,892$1,140 $396 $- $3,356 Selling, general and administrative2,886 24 - - 2,862 Research and development4,537 3 1 - 4,533 Restructuring costs 184 - 184 - - Other (income) expense, net27 - - (393) 420 Third Quarter 2025 Cost of sales $3,855$621 $110 $- $3,124 Selling, general and administrative2,633 34 - - 2,599 Research and development4,234 4 233 - 3,997 Restructuring costs 47 - 47 - - Other (income) expense, net(238) - - (344) 106 GAAP Expense, EPS and Related Information Gross margin was 72.9% for the third quarter of 2026 compared with 77.7% for the third quarter of 2025. The decrease was primarily due to higher amortization of intangible assets, restructuring costs and production costs. 4
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Selling, general and administrative (SG&A) expenses were $2.9 billion in the third quarter of 2026, an increase of 10% compared with the third quarter of 2025. The increase was primarily due to higher administrative costs, as well as higher promotional costs in support of product launches. Research and development (R&D) expenses were $4.5 billion in the third quarter of 2026, an increase of 7% compared with the third quarter of 2025. The increase was primarily due to a $400 million charge related to a global license agreement with SciBrunch and higher clinical development spending, partially o set by lower restructuring costs and a $200 million reduction in R&D expenses as part of a funding agreement with Blackstone Life Sciences (Blackstone). R&D expenses in the third quarter of 2025 include a $300 million charge for a milestone payment to LaNova for the completion of the technology transfer for MK-2010. Other (income) expense, net, was $27 million of expense in the third quarter of 2026 compared with $238 million of income in the third quarter of 2025. The unfavorability was primarily due to higher net interest expense. The e ective income tax rate for the third quarter of 2026 was 8.9%, re ecting the favorable impacts of certain discrete items, as well as jurisdictional mix of income and expense. GAAP EPS was $2.04 for the third quarter of 2026 compared with $2.32 for the third quarter of 2025. The decrease was primarily driven by higher operating expenses, re ecting increased investments to advance the R&D pipeline and support product launches, higher amortization of intangible assets, higher net interest expense and increased restructuring costs, partially o set by operational strength in the business and a lower e ective income tax rate. Non-GAAP Expense, EPS and Related Information Non-GAAP gross margin was 81.4% for the third quarter of 2026 compared with 81.9% for the third quarter of 2025. The decrease was primarily due to higher production costs. Non-GAAP SG&A expenses were $2.9 billion in the third quarter of 2026, an increase of 10% compared with the third quarter of 2025. The increase was primarily due to higher administrative costs, as well as higher promotional costs in support of product launches. Non-GAAP R&D expenses were $4.5 billion in the third quarter of 2026, an increase of 13% compared with the third quarter of 2025. The increase was primarily due to a $400 million charge related to a global license agreement with SciBrunch and higher clinical development spending, partially o set by a $200 million reduction in R&D expenses as part of a funding agreement with Blackstone. R&D expenses in the third quarter of 2025 include a $300 million charge for a milestone payment to LaNova for the completion of the technology transfer for MK-2010. 5
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Non-GAAP other (income) expense, net, was $420 million of expense in the third quarter of 2026 compared with $106 million of expense in the third quarter of 2025. The unfavorability was primarily due to higher net interest expense. The non-GAAP e ective income tax rate for the third quarter of 2026 was 10.9%, re ecting the favorable impacts of certain discrete items, as well as jurisdictional mix of income and expense. Non-GAAP EPS was $2.49 for the third quarter of 2026 compared with $2.58 for the third quarter of 2025. The decrease was primarily driven by higher operating expenses, re ecting increased investments to advance the R&D pipeline and support product launches, and higher net interest expense, partially o set by operational strength in the business and a lower e ective income tax rate. A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows. Third Quarter $ in millions, except EPS amounts 2026 2025 EPS GAAP EPS $2.04 $2.32 Di erence 0.45 0.26 Non-GAAP EPS that excludes items listed below3 $2.49 $2.58 Net Income GAAP net income2 $5,065$5,785 Di erence 1,094 663 Non-GAAP net income that excludes items listed below2,3 $6,159$6,448 Excluded Items: Acquisition- and divestiture-related costs4 $1,167$659 Restructuring costs 581 390 Income from investments in equity securities(393) (344) Decrease to net income before taxes 1,355 705 Estimated income tax (bene t) expense5 (261) (42) Decrease to net income $1,094$663 Pipeline and Portfolio Highlights In the third quarter, the Company achieved key regulatory and clinical milestones to meaningfully advance its broad and diverse pipeline. Oncology: U.S. Food and Drug Administration (U.S. FDA) approved WELIREG plus Lenvima, in collaboration with Eisai, for certain previously treated adult patients with advanced renal cell carcinoma with a clear cell component (ccRCC), based on Phase 3 LITESPARK-011 trial. 6
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Approval represents rst approved combination of an oral hypoxia-inducible factor-2 alpha inhibitor and a multi-targeted vascular endothelial growth factor tyrosine kinase inhibitor (TKI) for these patients. In October, U.S. FDA accepted a Biologics License Application (BLA) seeking approval of sac-TMT for the treatment of adult patients with endometrial cancer who have previously received platinum containing chemotherapy and a programmed death receptor 1 or programmed death ligand 1 inhibitor, separately or in combination, based on Phase 3 TroFuse-005 trial. U.S. FDA set Prescription Drug User Fee Act (PDUFA) date of June 15, 2027. The Company is in discussions with the U.S. FDA and is hopeful for an earlier approval. In October, European Commission (EC) approved KEYTRUDA plus Padcev as perioperative treatment for adults with resectable muscle-invasive bladder cancer (MIBC), based on Phase 3 KEYNOTE-B15 trial. Ministry of Health, Labor and Welfare in Japan approved subcutaneous pembrolizumab and berahyaluronidase alfa injection under the trademark KEYJECT (marketed as KEYTRUDA QLEX in the U.S.) for all KEYTRUDA indications approved in Japan, based on Phase 3 MK-3475A-D77 trial. At the European Society for Medical Oncology (ESMO) Congress 2026 in October, positive new data were presented during three late-breaking Presidential Symposia across three Phase 3 trials from the Company’s robust oncology pipeline and portfolio, including: Results from Phase 3 TroFuse-005 trial evaluating sac-TMT for patients with advanced or recurrent endometrial cancer previously treated with chemotherapy and anti-PD-1/L1 immunotherapy. Results from Phase 3 INTerpath-001 trial, in collaboration with Moderna, Inc. (Moderna), evaluating adjuvant treatment with intismeran autogene (intismeran; V940 or mRNA-4157) in combination with KEYTRUDA. Results from Phase 3 KEYNOTE-C93 trial evaluating KEYTRUDA monotherapy versus platinum doublet chemotherapy as a rst-line treatment for certain patients with mismatch repair de cient (dMMR) advanced or recurrent endometrial cancer who had not previously received systemic chemotherapy or who experienced recurrence more than six months after completing prior adjuvant therapy. In addition, data were presented from Phase 3 OptiTROP studies in China, led by Kelun-Biotech, evaluating sac-TMT in non-small cell lung cancer (NSCLC), including: Results from the OptiTROP-Lung06 study as rst-line treatment for PD-L1-negative advanced non-squamous NSCLC. Final overall survival data from the OptiTROP-Lung04 study in epidermal growth factor receptor (EGFR)-mutated NSCLC following progression on EGFR TKIs. I natamab deruxtecan (I-DXd) Biologics License Application (BLA), in collaboration with Daiichi Sankyo, 7
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for certain patients with previously treated extensive-stage small cell lung cancer (ES-SCLC) was voluntarily withdrawn. Vaccines and Infectious Diseases: U.S. FDA accepted a supplemental BLA (sBLA) for ENFLONSIA to expand its indication to include prevention of respiratory syncytial virus (RSV) lower respiratory tract disease (LRTD) in children under 2 years of age at increased risk for severe RSV disease through their second RSV season, based on Phase 3 SMART trial. U.S. FDA set PDUFA date of March 22, 2027. Applications to expand marketing authorization for ENFLONSIA for same population in Europe and Japan, based on Phase 3 SMART trial, have also been accepted. U.S. FDA accepted a supplemental New Drug Application (sNDA) for IDVYNSO for the treatment of certain adults with HIV-1 infection who had not previously received antiretroviral treatment, based on Phase 3 P053 trial. U.S. FDA also accepted an sNDA to include 96-week data for IDVYNSO in certain virologically suppressed adults, based on the Phase 3 P051 and P052 trials. U.S. FDA set a PDUFA date for both sNDAs of April 22, 2027. Cardiometabolic, Respiratory and Specialty: U.S. FDA approved an update to U.S. product label for WINREVAIR to include e cacy and safety data from the Phase 3 HYPERION trial evaluating adults recently diagnosed with pulmonary arterial hypertension (PAH, World Health Organization [WHO] Group 1 pulmonary hypertension). In HYPERION, in patients diagnosed with PAH in the last 12 months, adding WINREVAIR on top of background therapy reduced the risk of clinical worsening events compared to placebo. Immunology: Presented results from Phase 2b study of tulisokibart in adults with moderate to severe hidradenitis suppurativa (HS). Ophthalmology: At the American Academy of Ophthalmology (AAO) 2026 Annual Meeting in October, presented for the rst time one-year results from Phase 2b/3 BRUNELLO trial evaluating remigromig, an investigational, tetravalent, tri-speci c antibody designed to agonize the Wingless-related integration site (Wnt) pathway, in adults with diabetic macular edema (DME). 8
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Business Development: Announced an exclusive global license agreement with SciBrunch for MK-2690 (SPR2015), an investigational preclinical oral KRAS G12D (ON) inhibitor. Notable recent news releases on the Company’s pipeline and portfolio are provided in the table that follows. Visit the News Releases section of the Company’s website to read the releases.* Oncology Sac-TMT Reduced Risk of Death by 32% and Risk of Disease Progression or Death by 41% Compared to Chemotherapy inCertain Patients With Advanced or Recurrent Endometrial Cancer; Results From Phase 3 TroFuse-005 Trial The Company and Moderna Presented Results From Landmark Phase 3 INTerpath-001 Trial for Intismeran Plus KEYTRUDA atESMO 2026 Presidential Symposium; Intismeran Plus KEYTRUDA Signi cantly Reduced Risk of Recurrence or Death by 42%(HR=0.58 [95% CI, 0.45–0.75]; Two-Sided p<0.001) Compared to KEYTRUDA Alone for Patients With Completely ResectedStage IIB-IV Melanoma KEYTRUDA as Monotherapy Reduced Risk of Disease Progression or Death by 43% for Certain Patients With Advanced orRecurrent Endometrial Cancer With dMMR Tumors Compared to Chemotherapy; Results From Phase 3 KEYNOTE-C93 Trial U.S. FDA Approved WELIREG Plus Lenvima for Certain Previously Treated Adult Patients With ccRCC; Based on Results FromPhase 3 LITESPARK-011 Trial, Presented at ESMO KEYTRUDA QLEX Approved in Japan for Subcutaneous Administration for All KEYTRUDA Indications Approved in Japan; Basedon Results From Phase 3 MK-3475A-D77 Trial EC Approved KEYTRUDA Plus Padcev as Perioperative Treatment for Adults With Resectable MIBC; Based on Results FromPhase 3 KEYNOTE-B15 Trial I-DXd BLA for Certain Patients With ES-SCLC Voluntarily Withdrawn The Company Entered Into Exclusive Global License Agreement With SciBrunch for SPR2015, an Investigational Oral KRASG12D (ON) Inhibitor Vaccines andInfectiousDiseases U.S. FDA Accepted sBLA for ENFLONSIA to Update Its RSV LRTD Indication to Include Children Under 2 Years at IncreasedRisk for Severe RSV for Their Second Season; Based on Results From Phase 3 SMART Trial; FDA Set PDUFA Date of March 22,2027 Cardiometabolic,Respiratory andSpecialty U.S. FDA Approved Update to the Label for WINREVAIR to Include Data From the Phase 3 HYPERION Trial Evaluating AdultsRecently Diagnosed With PAH (PAH, WHO Group 1 Pulmonary Hypertension) ImmunologyTulisokibart Met Primary and Key Secondary Endpoints in Phase 2b Study in Patients With Moderate to Severe HS OphthalmologyThe Company Presented One-Year Results From Pivotal Phase 2b/3 BRUNELLO Study Evaluating Remigromig, a Tri-Speci cAgonist of the Wnt Pathway, in Adults With DME, at AAO 2026 *References in the above news release titles have been modi ed for the purpose of this announcement. Sustainability Highlights The Company’s 2025/2026 Purpose for Progress Impact Report provided a comprehensive view of the Company’s measurable progress across its sustainability priorities, including achieving all goals targeted for completion by 2025. The Company also introduced new targets for 2030, including a goal to reach 100 million people with access solutions that close gaps in care by 2030. Full-Year 2026 Financial Outlook The following table summarizes the Company’s full-year nancial outlook. Full Year 2026 Updated Prior Sales* $66.8 billion to $67.3 billion$66.3 billion to $67.3 billion Non-GAAP Gross margin3 Approximately 81%Approximately 81% Non-GAAP Operating expenses3** $42.4 billion to $42.9 billion$42.0 billion to $42.7 billion Non-GAAP Other (income) expense, net3 Approximately $1.4 billion expenseApproximately $1.4 billion expense NGAAPE i i 3 320%330% 350%360% 9
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Non-GAAP E ective income tax rate3 32.0% to 33.0% 35.0% to 36.0% Non-GAAP EPS3*** $2.77 to $2.82 $2.66 to $2.76 Share count (assuming dilution)Approximately 2.48 billionApproximately 2.48 billion *The Company does not have any non-GAAP adjustments to sales.**Includes one-time R&D charges of $9.0 billion for the acquisition of Cidara Therapeutics, Inc. (Cidara), $5.7 billion for the acquisition of TernsPharmaceuticals, Inc. (Terns), and $400 million related to the global license agreement with SciBrunch. Outlook does not assume any additionalsigni cant potential business development transactions.***Includes one-time charges of $3.62 per share for the acquisition of Cidara, $2.31 per share for the acquisition of Terns, and $0.12 per share relatedto the global license agreement with SciBrunch. The Company has not provided a reconciliation of forward-looking non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other (income) expense, net, non-GAAP e ective income tax rate and non-GAAP EPS to the most directly comparable GAAP measures, given it cannot predict with reasonable certainty the amounts necessary for such a reconciliation, including intangible asset impairment charges, legal settlements, and income and losses from investments in equity securities either owned directly or through ownership interests in investment funds, without unreasonable e ort. These items are inherently di cult to forecast and could have a signi cant impact on the Company’s future GAAP results. The Company now anticipates full-year 2026 sales to be between $66.8 billion and $67.3 billion, including a positive impact from foreign exchange of approximately 1% at mid-October 2026 exchange rates. The Company now expects the full-year non-GAAP e ective income tax rate to be between 32.0% and 33.0%, including the impact of the non-tax-deductible one-time charges for the acquisitions of Cidara and Terns. The Company now expects full-year 2026 non-GAAP EPS to be between $2.77 and $2.82, including a positive impact from foreign exchange of approximately $0.15 per share at mid-October 2026 exchange rates. This range includes one-time charges of $9.0 billion, or $3.62 per share, related to the acquisition of Cidara; $5.7 billion, or $2.31 per share, related to the acquisition of Terns; and $400 million, or $0.12 per share, related to the global license agreement with SciBrunch. The charge related to SciBrunch was not previously included in the outlook. In 2025, non-GAAP EPS of $8.98 was negatively impacted by one-time charges of $0.20 per share in the aggregate related to certain business development transactions. Consistent with past practice, the nancial outlook does not assume additional signi cant potential business development transactions. Earnings Conference Call Investors, journalists and the general public may access a live audio webcast of the call on Thursday, Oct. 29, at 9 a.m. EDT via this weblink. A replay of the webcast, along with the sales and earnings news release, supplemental nancial disclosures and slides highlighting the results, will be available on the Company’s website. All participants may join the call by dialing (800) 369-3351 (U.S. and Canada Toll-Free) or (517) 308-9448 and using the access code 9818590. 10
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About Our Company At Merck & Co., Inc., Rahway, N.J., USA, known as MSD outside of the United States and Canada, we are uni ed around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA This news release of Merck & Co., Inc., Rahway, N.J., USA (the “Company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to signi cant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may di er materially from those set forth in the forward-looking statements. Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate uctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the Company’s ability to accurately predict future market conditions; manufacturing di culties or delays; nancial instability of international economies and sovereign risk; dependence on the e ectiveness of the Company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to di er materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and the Company’s other lings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov). Appendix Generic product names are provided below. 11
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Pharmaceutical BRIDION (sugammadex) CAPVAXIVE (Pneumococcal 21-valent Conjugate Vaccine) ENFLONSIA (clesrovimab-cfor) GARDASIL (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant) GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) IDVYNSO (doravirine/islatravir) JANUMET (sitagliptin and metformin HCl) JANUVIA (sitagliptin) KEYTRUDA (pembrolizumab) KEYTRUDA QLEX (pembrolizumab and berahyaluronidase alfa-pmph) LAGEVRIO (molnupiravir) Lenvima (lenvatinib) Lynparza (olaparib) M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live) OHTUVAYRE (ensifentrine) PREVYMIS (letermovir) PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live) VARIVAX (Varicella Virus Vaccine Live) WELIREG (belzutifan) WINREVAIR (sotatercept-csrk) Animal Health BRAVECTO ( uralaner) _______________________________1Available in some markets as KEYTRUDA SC.2Net income attributable to the Company.3 The Company is providing certain 2026 and 2025 non-GAAP information that excludes certain items because of the nature of these items and theimpact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhancesinvestors’ understanding of the Company’s results because management uses non-GAAP results to assess performance. Management uses non-GAAPmeasures internally for planning and forecasting purposes and to measure the performance of the Company along with other metrics. In addition,annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. Thisinformation should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. For adescription of the non-GAAP adjustments, see Table 2a attached to this release.4Re ects expenses related to business combinations, including the amortization of intangible assets, intangible asset impairment charges, andexpense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also includes integration,transaction and certain other costs associated with acquisitions and divestitures, as well as amortization of intangible assets related to collaborations,licensing arrangements and asset acquisitions, and recognition of fair value step-up to inventories for asset acquisitions.5 Includes the estimated income tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAPadjustments for all periods presented. Amount in the third quarter of 2025 also includes $86 million of tax expense relating to audit reserveadjustments. 12
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MERCK & CO., INC., RAHWAY, N.J., USACONSOLIDATED STATEMENT OF OPERATIONS - GAAP(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)(UNAUDITED)Table 1 GAAP %Change GAAP %Change 3Q263Q25 Sep YTD2026Sep YTD2025 Sales $ 18,085$ 17,2765% $ 50,978$ 48,6115%Costs, Expenses and OtherCost of sales 4,8923,85527% 13,48210,83124%Selling, general and administrative2,8862,63310% 8,4917,8358%Research and development4,5374,2347% 26,87111,903*Restructuring costs 184 47 * 530 676-22%Other (income) expense, net27 (238) * 262 (281) *Income Before Taxes 5,5596,745-18% 1,34217,647-92%Income Tax Provision 492 958 1,8552,346Net Income (Loss) 5,0675,787-12% (513) 15,301*Less: Net Income (Loss) Attributable to Noncontrolling Interests2 2 (3) 10Net Income (Loss) Attributable to Merck & Co., Inc., Rahway, N.J.,USA $ 5,065$ 5,785-12% $ (510)$ 15,291* Earnings (Loss) per Common Share Assuming Dilution(1) $ 2.04$ 2.32-12% $ (0.21)$ 6.08* Average Shares Outstanding Assuming Dilution(1) 2,4782,498 2,4712,514 E ective Income Tax Rate 8.9% 14.2% 138.2% 13.3% * 100% or greater(1)Because the Company recorded a net loss in the rst nine months of 2026, no potential dilutive common shares were used in the computation ofloss per common share assuming dilution as the e ect would have been anti-dilutive. MERCK & CO., INC., RAHWAY, N.J., USATHREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026 GAAP TO NON-GAAP RECONCILIATION (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)(UNAUDITED)Table 2a GAAP Acquisition-andDivestiture-RelatedCosts(1) RestructuringCosts(2) (Income)Loss fromInvestmentsin EquitySecurities AdjustmentSubtotalNon-GAAP Third Quarter Cost of sales $4,8921,140 396 1,536$ 3,356 Selling, general and administrative2,886 24 24 2,862 Research and development4,537 3 1 4 4,533 Restructuring costs184 184 184 – Other (income) expense, net27 (393) (393) 420 Income Before Taxes5,559(1,167) (581) 393 (1,355) 6,914 Income Tax Provision (Bene t)492 (239)(3) (105)(3) 83(3) (261) 753 Net Income 5,067 (928) (476) 310 (1,094) 6,161Net Income Attributable to Merck &Co., Inc., Rahway, N.J., USA5,065 (928) (476) 310 (1,094) 6,159Earnings per Common ShareAssuming Dilution $ 2.04 (0.38) (0.19) 0.12 (0.45) $ 2.49 E ective Income Tax Rate8.9% 10.9% September YTD Cost of sales $13,4823,221 817 4,038$ 9,444 Selling, general and administrative8,491 73 73 8,418 Research and development26,871 9 34 43 26,828 Restructuring costs530 530 530 – Other (income) expense, net262 (764) (764) 1,026 I Bf T 1342 13
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Income Before Taxes1,342(3,303) (1,381) 764 (3,920) 5,262 Income Tax Provision (Bene t)1,855 (660)(3) (240)(3) 163(3) (737) 2,592 Net (Loss) Income(513) (2,643) (1,141) 601 (3,183) 2,670Net (Loss) Income Attributable toMerck & Co., Inc., Rahway, N.J., USA(510) (2,643) (1,141) 601 (3,183) 2,673(Loss) Earnings per Common ShareAssuming Dilution(4) $(0.21) (1.07) (0.46) 0.24 (1.29) $ 1.08 E ective Income Tax Rate138.2% 49.3% Only the line items that are a ected by non-GAAP adjustments are shown.The Company is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have onthe analysis of underlying business performance and trends. Management believes that providing non-GAAP information enhances investors’understanding of the Company’s results because management uses non-GAAP measures to assess performance. Management uses non-GAAPmeasures internally for planning and forecasting purposes and to measure the performance of the Company along with other metrics. In addition,annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance withGAAP.(1)Amounts included in cost of sales re ect expenses for the amortization of intangible assets, as well as the recognition of fair value step-up ofinventories related to the 2025 Verona Pharma plc acquisition. Amounts included in selling, general and administrative expenses re ect integration,transaction and certain other costs related to acquisitions and divestitures.(2)Amounts primarily include employee separation costs, accelerated depreciation and asset impairment charges associated with facilities to be closedor divested, as well as contractual termination costs, related to activities under the Company's formal restructuring programs.(3)Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAPadjustments.(4)Because the Company recorded a net loss in the rst nine months of 2026, no potential dilutive common shares were used in the computation ofloss per common share assuming dilution as the e ect would have been anti-dilutive. MERCK & CO., INC., RAHWAY, N.J., USA FRANCHISE / KEY PRODUCT SALES (AMOUNTS IN MILLIONS) (UNAUDITED) Table 3 2026 2025 3QSep YTD 1Q2Q3QSepYTD1Q2Q3QSepYTD4QFullYearNom% Ex-Exch%Nom% Ex-Exch% TOTAL SALES(1) $16,286$16,607$18,085$50,978$15,529$15,806$17,276$48,611$16,400$65,0115 4 5 4 PHARMACEUTICAL14,34914,76016,26845,37713,63814,05015,61143,29914,84358,1424 4 5 4Oncology Keytruda 7,9067,9047,77123,5817,2057,9568,14223,3038,33731,641-5-4 1 0Keytruda Qlex1284638301,420 5 5 35 40* * * *Alliance Revenue –Lynparza (2) 3413653521,0593123703791,0613891,450-7-7 0 -2Alliance Revenue –Lenvima(2) 2562832878262582652587812721,05311116 5Welireg 19927130777613716219649622071656585757Alliance Revenue –Reblozyl(3) 14812217744811910713636116452531312424 Vaccines &InfectiousDiseases Gardasil/Gardasil 91,0691,1691,9954,2321,3271,1261,7494,2021,0315,23314141 0ProQuad/M-M-RII/Varivax 5385927301,8605396096841,8326192,4517 7 2 1Bridion 4724971441,1134414614391,3414991,841-67-67-17-17Prevymis 27229534791520822826670227597830313029Capvaxive1421842635881071292444802797598 7 2222Vaxneuvance202148195545230229226685140825-14-13-20-22RotaTeq 206134196536228121204554119673-4-4-3-4Zerbaxa 82 77 90 249 70 74 81 225 87 3121111119Delstrigo 75 101 67 243 67 83 77 228 79 306-13-127 3En onsia 1 2 187190 79 79 21 100138136142140Isentress/IsentressHD 59 60 52 171 90 86 82 258 67 325-36-36-34-34Di cid 34 22 14 70 83 96 43 222 25 247-68-68-68-68Lagevrio 28 5 17 49 102 83 138323 57 380-88-88-85-85 Cardiometabolic,Respiratory, &Specialty Winrevair 5255886941,8082803363609764671,44393948585Januvia 3672581868115493723821,3023021,604-51-50-38-37J t 20717119457224725124374119994020202324 14
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Janumet 207171194572247251243741199940-20-20-23-24Ohtuvayre131204184519 178178- - - -Alliance Revenue -Adempas/Verquvo(4) 1091261183531061231123401294705 5 4 4Adempas(5) 78 78 78 234 68 80 82 229 83 312-5-3 2 -1 OtherPharmaceutical(6)7746417932,2098657031,0042,5737703,340-21-21-14-15 ANIMAL HEALTH1,7911,7751,6765,2431,5881,6461,6154,8491,5056,3544 3 8 5 Livestock 1,0641,0411,0483,1549249611,0232,9099873,8962 2 8 5Companion Animal7277346282,0896646855921,9405182,4586 6 8 5 Other Revenues(7) 146721413583031105046352515185-25-23-8 '*200% or greater'Sum of quarterly amounts may not equal year-to-date amounts due to rounding.(1)Only select products are shown.(2)Alliance Revenue represents the Company's share of pro ts, which are product sales net of cost of sales and commercialization costs.(3)Alliance Revenue represents royalties.(4)Alliance Revenue represents the Company's share of pro ts from sales in Bayer's marketing territories, which are product sales net of cost of sales andcommercialization costs.(5)Net product sales in the Company's marketing territories.(6)Includes Pharmaceutical products not individually shown above. Also re ects total alliance revenue for Koselugo of $161 million, $10 million and $13 million inthe rst, second and third quarter of 2026, respectively, and $44 million, $43 million and $214 million in the rst, second and third quarter of 2025, respectively.(7)Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of milestone payments for out-licensed products were $132 million, $0 million and $2 million in the rst,second and third quarter of 2026, respectively, and $95 million, $5 million and $11 million in the rst, second and third quarter of 2025, respectively. Media Contacts: Michael Levey michael.levey@msd.com John Cummins john.cummins2@msd.com Investor Contacts: Peter Dannenbaum (732) 594-1579 Steven Graziano (732) 594-1583 Source: Merck & Co., Inc. 15