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MRK's Keytruda & Gardasil Sales Rise in Q3: Can the Momentum Last?
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Key Takeaways
Merck's Keytruda and Gardasil sales grew 6% and 14%, respectively, in the third quarter of 2026.
Keytruda benefited from earlier-stage cancer demand, while Gardasil gained from favorable U.S. purchasing.
Gardasil faces 2027 headwinds from weak demand in China and Japan and growing competition.
Merck’s (MRK - Free Report) two largest franchises, PD-1 inhibitor Keytruda and HPV vaccine Gardasil, delivered year-over-year sales growth in the third quarter of 2026. However, their growth outlooks differ significantly. Let’s break it down.
Keytruda Sales Rise in Q3 but Growth Headwinds Loom
Combined Keytruda and Keytruda Qlex sales increased 6% to $8.60 billion. Keytruda Qlex contributed $830 million during the reported quarter. Excluding the sales of Keytruda Qlex, Keytruda recorded sales of $7.77 billion in the third quarter, which beat the Zacks Consensus Estimate of $7.46 billion.
Keytruda’s growth was driven by strong uptake in earlier-stage cancers and continued robust demand for metastatic indications. However, the timing of U.S. customer purchases last year created a headwind to growth, but this was largely offset by approximately $200 million from favorable U.S. inventory timing. However, the benefit from this channel inventory is expected to reverse in the fourth quarter.
Merck is seeing an increase in usage of Keytruda in tumors that primarily affect women, including cervical and breast cancers, as well as Keytruda in combination with Pfizer’s Padcev in first-line, locally advanced or metastatic urothelial cancer. Merck also saw an increased uptake in earlier-stage head and neck cancer.
In 2027, Keytruda’s growth is expected to moderate as the company has reached peak penetration for certain approved indications. Policy-related headwinds in Germany are also expected to impact Keytruda’s sales.
The most significant longer-term risk is Keytruda's U.S. loss of market exclusivity beginning in 2028. The entry of biosimilars could lead to substantial pricing and market-share pressure on the original intravenous formulation.
Year to date, shares of Merck have rallied 42.9% compared with the industry’s 22.7% rise.
Image Source: Zacks Investment Research
Gardasil Recovers on Favorable U.S. Purchasing Trends, Challenges Remain
Gardasil generated sales of $1.99 billion, up 14% year over year. U.S. sales rose 18%, reflecting favorable public-sector purchasing patterns and improved net pricing. International sales rose 6% in the quarter. Gardasil/Gardasil 9 sales beat the Zacks Consensus Estimate of $1.81 billion.
Gardasil’s sales declined 9% in the first half of 2026, primarily due to lower demand in China, Japan and the United States. However, third-quarter sales improved significantly, but much of the growth came from favorable CDC purchasing patterns (approximately $300 million) and higher net pricing in the United States rather than a broad-based recovery in vaccine demand. Of approximately $300 million in favorable vaccine purchasing benefits recorded in the third quarter, $50 million is expected to reverse in the fourth quarter of 2026, while the remaining $250 million will reverse in 2027. This will create a significant year-over-year headwind for Gardasil.
Gardasil faces continued challenges in 2027. Continued weak demand in China and Japan, growing competition from cheaper domestic HPV vaccines in China, broader vaccine hesitancy and reduced vaccination rates could continue to weigh on Gardasil sales.
PD-1/PD-L1 Inhibitors Competing With MRK's Keytruda
Keytruda faces competition from other PD-1/PD-L1 inhibitors, including Bristol Myers’ (BMY - Free Report) Opdivo, Roche’s (RHHBY - Free Report) Tecentriq and AstraZeneca’s (AZN - Free Report) Imfinzi.
BMY’s Opdivo, also a PD-1 inhibitor like Keytruda, is approved across multiple cancer types, including lung, melanoma and kidney cancers. Bristol Myers recorded $7.0 billion in Opdivo sales in the first nine months of 2026, down 5% year over year.
Tecentriq is Roche’s leading immuno-oncology drug approved for multiple cancer indications. RHHBY recorded CHF 2.6 billion in Tecentriq sales in the first nine months of 2026, up 5% year over year.
AZN’s Imfinzi generated sales of $5.5 billion in the first nine months of 2026, up 28%, driven by strong demand growth across all regions from established indications and new launches.
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MRK's Keytruda & Gardasil Sales Rise in Q3: Can the Momentum Last?
Key Takeaways
Merck’s (MRK - Free Report) two largest franchises, PD-1 inhibitor Keytruda and HPV vaccine Gardasil, delivered year-over-year sales growth in the third quarter of 2026. However, their growth outlooks differ significantly. Let’s break it down.
Keytruda Sales Rise in Q3 but Growth Headwinds Loom
Combined Keytruda and Keytruda Qlex sales increased 6% to $8.60 billion. Keytruda Qlex contributed $830 million during the reported quarter. Excluding the sales of Keytruda Qlex, Keytruda recorded sales of $7.77 billion in the third quarter, which beat the Zacks Consensus Estimate of $7.46 billion.
Keytruda’s growth was driven by strong uptake in earlier-stage cancers and continued robust demand for metastatic indications. However, the timing of U.S. customer purchases last year created a headwind to growth, but this was largely offset by approximately $200 million from favorable U.S. inventory timing. However, the benefit from this channel inventory is expected to reverse in the fourth quarter.
Merck is seeing an increase in usage of Keytruda in tumors that primarily affect women, including cervical and breast cancers, as well as Keytruda in combination with Pfizer’s Padcev in first-line, locally advanced or metastatic urothelial cancer. Merck also saw an increased uptake in earlier-stage head and neck cancer.
In 2027, Keytruda’s growth is expected to moderate as the company has reached peak penetration for certain approved indications. Policy-related headwinds in Germany are also expected to impact Keytruda’s sales.
The most significant longer-term risk is Keytruda's U.S. loss of market exclusivity beginning in 2028. The entry of biosimilars could lead to substantial pricing and market-share pressure on the original intravenous formulation.
Year to date, shares of Merck have rallied 42.9% compared with the industry’s 22.7% rise.
Gardasil Recovers on Favorable U.S. Purchasing Trends, Challenges Remain
Gardasil generated sales of $1.99 billion, up 14% year over year. U.S. sales rose 18%, reflecting favorable public-sector purchasing patterns and improved net pricing. International sales rose 6% in the quarter. Gardasil/Gardasil 9 sales beat the Zacks Consensus Estimate of $1.81 billion.
Gardasil’s sales declined 9% in the first half of 2026, primarily due to lower demand in China, Japan and the United States. However, third-quarter sales improved significantly, but much of the growth came from favorable CDC purchasing patterns (approximately $300 million) and higher net pricing in the United States rather than a broad-based recovery in vaccine demand. Of approximately $300 million in favorable vaccine purchasing benefits recorded in the third quarter, $50 million is expected to reverse in the fourth quarter of 2026, while the remaining $250 million will reverse in 2027. This will create a significant year-over-year headwind for Gardasil.
Gardasil faces continued challenges in 2027. Continued weak demand in China and Japan, growing competition from cheaper domestic HPV vaccines in China, broader vaccine hesitancy and reduced vaccination rates could continue to weigh on Gardasil sales.
PD-1/PD-L1 Inhibitors Competing With MRK's Keytruda
Keytruda faces competition from other PD-1/PD-L1 inhibitors, including Bristol Myers’ (BMY - Free Report) Opdivo, Roche’s (RHHBY - Free Report) Tecentriq and AstraZeneca’s (AZN - Free Report) Imfinzi.
BMY’s Opdivo, also a PD-1 inhibitor like Keytruda, is approved across multiple cancer types, including lung, melanoma and kidney cancers. Bristol Myers recorded $7.0 billion in Opdivo sales in the first nine months of 2026, down 5% year over year.
Tecentriq is Roche’s leading immuno-oncology drug approved for multiple cancer indications. RHHBY recorded CHF 2.6 billion in Tecentriq sales in the first nine months of 2026, up 5% year over year.
AZN’s Imfinzi generated sales of $5.5 billion in the first nine months of 2026, up 28%, driven by strong demand growth across all regions from established indications and new launches.
MRK's Zacks Rank
Merck currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merck & Co., Inc. Price and Consensus
Merck & Co., Inc. price-consensus-chart | Merck & Co., Inc. Quote