New York, Feb 4, 2026, 19:20 EST — After-hours
- Merck shares gained roughly 2.2% in after-hours trading, maintaining their rise following this week’s earnings report and updated outlook.
- The drugmaker’s 2026 forecast showed pressure from off-patent drugs and U.S. pricing challenges, despite steady demand for Keytruda.
- Fresh data on the experimental cholesterol drug enlicitide gave investors one more pipeline catalyst to watch.
Merck & Co shares climbed roughly 2.2% in after-hours trading Wednesday, closing at $118.33, after hitting a peak of $120.36 during the session.
This move is crucial as Merck faces a wave of patent expirations on older drugs—known in the industry as “loss of exclusivity.” Investors are eager for fresh launches and late-stage pipeline candidates to step up and replace that revenue.
The urgency of that question has ramped up following the company’s guidance reset. Traders are also watching to see if Merck can steady Gardasil vaccine sales and maintain steady growth in its oncology franchise.
Merck projected 2026 revenue between $65.5 billion and $67.0 billion on Tuesday, falling short of the Street’s average estimate of $67.6 billion, per LSEG data. CEO Rob Davis pointed to legacy products as the source of the gap, saying, “Where the disconnect is coming with the Street, frankly, is in a lot of our legacy products.” BMO Capital analyst Evan Seigerman noted the quarter “builds a reasonable foundation for Merck heading into 2026,” but warned the outlook might temper expectations. (Reuters)
Merck reported fourth-quarter sales of $16.4 billion, with adjusted earnings of $2.04 per share, buoyed by $8.37 billion in Keytruda sales. However, Gardasil revenue dropped 34% to roughly $1.03 billion. Davis noted that “momentum is building as we continue to execute on our strategy.” The company also detailed a voluntary pact with the U.S. government, which includes a direct-to-patient program and a three-year hold on Section 232 tariffs—import duties linked to a national-security law. Merck pledged over $70 billion in capital and R&D investments to boost U.S. production and innovation. (Merck)
On Wednesday, researchers revealed that enlicitide, an experimental daily cholesterol pill, slashed LDL cholesterol by up to 60% over six months in a trial involving more than 2,900 high-risk patients already on statins. “There are other pills that patients can add to their statins but none come close to the degree of LDL cholesterol lowering that we see with enlicitide,” said Dr. Ann Marie Navar of UT Southwestern Medical Center, the study’s lead author. (AP News)
Merck watchers haven’t overlooked the cardiometabolic angle. As patent expirations loom on older drugs, new products and late-stage assets outside oncology are seen as crucial pressure valves.
Analysts quickly adjusted their targets following the quarter. Jason Gerberry of BofA Securities bumped Merck’s price target to $132 from $124, maintaining a buy rating. He noted the firm had become more cautious on certain off-patent drugs, U.S. Gardasil sales, and Merck’s COVID pill Lagevrio. Still, Gerberry raised forecasts for later years after factoring in Merck’s flu candidate MK-1406. (TipRanks)
Still, the short-term outlook is complicated. If generics gain ground quicker than anticipated, U.S. pricing pressure intensifies, or Gardasil demand in China drops further, newer products might struggle to gain traction before the next wave of patent expirations arrives.
Traders on Thursday will be focused on whether the bounce after guidance sticks and how fast attention moves from 2026 forecasts to pipeline updates. Merck’s upcoming earnings trigger is its Q1 report and conference call set for April 30. (Merck)
