Despite posting strong results in the final quarter of 2025, MSD (Merck & Co) has cut its 2026 guidance more than analysts expected, as the drugmaker prepares for the loss of exclusivity for several of its drugs.
MSD reported fourth-quarter global sales of $16.4 billion, an increase of 5% from the same period in 2024. Full-year sales in 2025 grew 1% to $65 billion.
While year-end results exceeded analyst expectations, investor optimism was overshadowed by the sales forecast for 2026. The big pharmaceutical company forecasts global sales of between $65.5 billion and $67 billion. The upper end of this range falls short of the average analyst estimate of $67.6 billion, according to LSEG data.
As has been the case in recent years, cancer blockbuster Keytruda (pembrolizumab) was the top-performing drug in the big pharma company’s portfolio. Immunotherapy reached $31.7 billion in global sales, driving much of the company’s better-than-expected 2025 performance, especially its strong fourth quarter. Keytruda is one of the MSD products that will face loss of exclusivity later this decade, while type 2 diabetes drugs Januvia (sitagliptin) and neuromuscular blocker Bridion (sugammadex) will lose patent protection in 2026.
The focus has therefore been firmly on the company’s pipeline and M&A activity in search of revenue replacement.
Reacting to the results, Citi analysts wrote: “We note that 2026 guidance was below expectations as investor interest remains in the anticipated loss of Keytruda exclusivity and the strategy to offset the impact with new launches and pipeline catalysts.”
MSD made two big deals in 2025 as it looks to replenish its portfolio. This included a $10 billion purchase of Verona Pharma and a $9.2 billion acquisition of antiviral developer Cidara Therapeutics in August and November last year, respectively. In January 2026, there were suggestions that MSD was looking to buy Revolution Medicines for up to $32 billion, although talks reportedly ended after disagreements over pricing.
In an earnings call, CEO Rob Davis said, “Our belief in our ability to have sustainable growth once we overcome the loss of exclusivity is as high as ever. We have early-stage assets that we will review over the next two years. Additionally, we have undertaken additional business development.”
Keytruda’s strong performance was joined by MSD’s new drug, Winrevair, which is used to treat pulmonary arterial hypertension (PAH). The injection recorded $467 million in sales in the fourth quarter, 133% more than in the same period of the previous year. While it was recently approved in 2024, Winrevair is touted as a major growth driver for the company as it transitions away from reliance on Keytruda.