MRK

A month has gone by since the last earnings report for Merck (MRK). Shares have added about 18.2% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Merck due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Merck & Co., Inc. before we dive into how investors and analysts have reacted as of late. Merck reported an adjusted loss of 13 cents per share for the second quarter of 2026, narrower than the Zacks Consensus Estimate of a loss of 26 cents. In the year-ago quarter, the company reported adjusted earnings of $2.13 per share.Including acquisition and divestiture-related costs, restructuring costs, income and losses from investments in equity securities and certain other items, loss was 54 cents per share in the second quarter versus earnings of $1.76 per share in the year-ago quarter.Adjusted as well as reported earnings included a charge of $2.31 per share recorded in the quarter related to the acquisition of Terns Pharmaceuticals, which was completed during the period.Revenues in the second quarter increased 5% year over year on a reported basis and 4% excluding foreign exchange (Fx) to $16.61 billion. Sales beat the Zacks Consensus Estimate of $16.33 billion. Higher sales of oncology drugs, including Keytruda and contributions from new products like Winrevair, Welireg and Capvaxive, and the Animal Health segment were partially offset by lower sales of Gardasil and some other vaccines. The Pharmaceutical segment generated revenues of $14.76 billion, up 5% year over year (4% excluding FX). Pharmaceutical segment revenues beat the Zacks Consensus Estimate of $14.28 billion.All sales growth numbers discussed below exclude FX impact. Combined sales of Keytruda and Keytruda Qlex increased 4% to $8.37 billion. The reported figure topped the Zacks Consensus Estimate of $8.06 billion. Sales of Keytruda benefited from rapid uptake across earlier-stage indications and continued strong momentum in metastatic indications. Keytruda sales in the second quarter included $463 million in sales of Keytruda Qlex, the subcutaneous formulation of Keytruda, compared to $128 million in the previous quarter as patient adoption has increased since the permanent J-code was established in April.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 Padcev in first-line, locally advanced or metastatic urothelial cancer.Merck said on the conference call that Keytruda’s U.S. growth will moderate as penetration peaks in several indications. The comparison will also be impacted by a $250 million wholesaler purchase benefit in the third quarter of 2025.On the conference call, Merck’s CEO Robert Davis said that the Keytruda exclusivity transition will create a shallow decline followed by a fast return to growth.Alliance revenues from Lynparza declined 2% to $365 million in the quarter. Lenvima alliance revenues increased 6% to $283 million, driven by higher U.S. demand, partly offset by lower net pricing.Welireg sales surged 67% to $271 million, reflecting higher demand in the United States for certain previously treated advanced renal cell carcinoma patients and continued launch uptake across international markets, particularly Japan. Favorable wholesaler purchasing patterns in the United States also aided performance. In vaccines, sales of HPV vaccines — Gardasil and Gardasil 9 — rose 3% to $1.17 billion. Higher demand in the Asia Pacific and Europe, along with favorable tender timing in Europe, supported the franchise. These gains were partly offset by lower demand and unfavorable timing of CDC purchases in the United States. Gardasil/Gardasil 9 sales missed the Zacks Consensus Estimate of $1.18 billion.Combined sales of ProQuad, M-M-R II and Varivax declined 3% to $592 million, mainly due to lower demand in the United States. Sales of the pneumococcal 15-valent conjugate vaccine Vaxneuvance declined 36% to $148 million due to lower demand in the United States and most international markets as well as unfavorable comparison to the prior year quarter, as public-sector activity in the United States increased sales in that period.Capvaxive sales increased 40% to $184 million, driven by increased demand in the United States and continued launch uptake in some international markets. Sales of the new RSV vaccine, Enflonsia, in the United States were $2 million in the second quarter of 2026 compared with $1 million in the first quarter. In the infectious disease portfolio, Bridion sales rose 8% to $497 million due to higher demand and pricing in the United States, partially offset by lower demand in most international markets due to generic competition. Bridion lost patent exclusivity in the United States in July 2026. However, Merck expects that U.S. sales will decline at a slower pace than previously expected due to lower-than-anticipated generic competition.Prevymis sales increased 28% to $295 million, driven by higher demand in the United States and certain European markets.Januvia/Janumet franchise sales fell 31% year over year to $429 million. Sales of the drug declined due to lower demand and net pricing in the United States due to competition, as well as lower demand in China and most other international markets amid ongoing generic competition.Winrevair sales jumped 75% to $588 million, reflecting continued strong demand in the United States and early launch momentum across international markets, particularly Japan and Europe.Ohtuvayre, added from the October 2025 acquisition of Verona Pharma, contributed $204 million in sales in the second quarter compared with $131 million in the previous quarter. Revenues in the second quarter benefitted from continued prescription demand as well as favorable timing of specialty pharmacy purchases. However, third-quarter revenues will be hurt by the unwinding of specialty pharmacy purchases. Merck is investing in salesforce expansion and patient support to drive accelerated growth in 2027.Regarding its newly launched HIV pill, Idvynso, Merck said it is seeing encouraging early progress on access and reimbursement.Merck’s Animal Health segment generated revenues of $1.78 billion, up 8% year over year on a reported basis and 5% excluding FX. This growth was driven by higher demand for livestock as well as companion animal products. Sales from this segment marginally beat the Zacks Consensus Estimate of $1.77 billion.Sales of livestock products rose 6% to $1.04 billion, driven by higher demand for ruminant and poultry products. Sales of companion animal products rose 5% to $734 million, driven by new product launches. Adjusted gross margin was 81.1%, down 110 basis points year over year due to higher inventory write-offs.Adjusted selling, general and administrative expenses rose 10% to $2.89 billion, reflecting higher administrative and promotional spending.Adjusted research and development expenses increased almost 144% to $9.74 billion in the quarter due to a significantly higher charge of $5.7 billion related to the Terns acquisition compared to a $200 million business development charge a year ago.Excluding these business development charges, operating expenses grew 7% in the quarter. Merck raised its sales guidance for 2026 while lowering its adjusted EPS range to include acquisition costs.The company now expects revenues to be in the range of $66.3-$67.3 billion, compared with the previous expectation of $65.8-$67.0 billion. The new range indicates year-over-year growth of 2% to 4%.The company now expects adjusted earnings of $2.66-$2.76 per share, down from its previous guidance of $5.04-$5.16. The revised range includes a one-time charge of $2.43 per share related to the Terns acquisition.The 2026 guidance represents a significant decline from adjusted EPS of $8.98 in 2025 due to higher charges related to business development transactions. In 2025, Merck recorded a one-time charge of 20 cents per share related to business development transactions.The guidance includes a positive impact from Fx of approximately 1% on sales and around 15 cents on EPS.The adjusted gross margin is expected to be around 81%, lower than the prior expectation of approximately 82% due to higher inventory reserves.Adjusted operating expenses are now expected to be in the range of $42.0-$42.7 billion compared with the earlier projection of $36.0 billion to $36.8 billion. The adjusted tax rate guidance was raised to 35-36% compared with the previous guidance of 23.5-24.5%.In 2026, Merck expects to buy back shares worth $3 billion. It turns out, estimates revision have trended downward during the past month. Currently, Merck has a average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Merck has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Merck is part of the Zacks Large Cap Pharmaceuticals industry. Over the past month, Novartis (NVS), a stock from the same industry, has gained 5.2%. The company reported its results for the quarter ended June 2026 more than a month ago. Novartis reported revenues of $14.41 billion in the last reported quarter, representing a year-over-year change of +2.5%. EPS of $2.41 for the same period compares with $2.42 a year ago. For the current quarter, Novartis is expected to post earnings of $2.24 per share, indicating a change of -0.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Novartis. Also, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Merck & Co., Inc. (MRK) : Free Stock Analysis Report Novartis AG (NVS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

August has been a great month for the shares of Merck & Co., Inc. (NYSE:MRK) and Moderna Inc. (NASDAQ:MRNA), to say the least. The former's stock closed 12.6% higher and the latter's stock closed 176% higher on August 19th. The stocks surged after a major announcement from Moderna Inc. (NASDAQ:MRNA) shared the results from its late stage melanoma vaccine. This trial combined MRNA's products with Merck & Co., Inc. (NYSE:MRK)'s well known Keytruda cancer drug to demonstrate that the pair worked together in creating a customized response to attacking cancer. Cramer commented on the development on August 24th in his morning appearance: For Moderna Inc. (NASDAQ:MRNA), the development was a nice breath of fresh air. Ahead of the surge, the stock was up by a modest 13% year-to-date. Moderna Inc. (NASDAQ:MRNA), the firm whose vaccine made headlines in the coronavirus pandemic, had struggled after the pandemic ended. As of its second quarter, the firm was bleeding cash as its net loss of $782 million far outstripped its revenue of $145 million. Additionally, Moderna Inc. (NASDAQ:MRNA)'s norovirus vaccine had also missed the success criteria for early results. With the results of the melanoma vaccine out, the bullish and bearish viewpoints about the firm depend on whether the results and a recent FDA flu vaccine approval justify a thorough re-rating of the stock. Among the recent bullishness for the stock, Bank of America and Morgan Stanley stand out. The former has raised the share price target to $170 from $40 and upgraded the rating to Neutral from Underperform, as it commented that the melanoma vaccine had changed the narrative. The latter bumped the target to $89 from $39 and discussed Moderna Inc. (NASDAQ:MRNA)'s platform strength. As for Merck & Co., Inc. (NYSE:MRK), its Keytruda vaccine is among the top selling vaccines in the world. With Keytruda accounting for roughly 50% of the firm's $16.6 billion of Q2 revenue, the vaccine, naturally, sits at the heart of the narrative. The drug's sales managed to grow 5% in the second quarter despite being in the market for years. Consequently, the performance of other drugs are important for the bullish viewpoint. During the second quarter, Merck & Co., Inc. (NYSE:MRK)'s arterial hypertension drug Winrevair's sales grew 75% annually to $588 million, while Welireg's sales grew by 67% to $271 million. Yet, at the same time, the need to develop business is taking a toll on the firm's bottom line. Merck & Co., Inc. (NYSE:MRK) posted a net loss in its second quarter while headwinds from generics grew to $2.5 billion in 2026. Shifting towards the hedge funds and valuation, during Q2, 49 out of 1,006 hedge funds covered by Insider Monkey had held a stake in MRNA, which marked a drop from the 52 in Q1. Some notable reductions came from D E Shaw (-97%) and Bridgewater Associates (-85%). As for MRK, 101 funds had held a stake in Q2, up from 98 in Q1. Fisher Asset Management bumped its stake by 46% to $4.9 billion. Price-to-sales wise, MRNA is more richly valued as its multiple of 28.28 is higher than MRK's 5.83. Yet, 16% of the shares are also sold short. READ NEXT: Jim Cramer Draws the Line on NVIDIA in China: Why National Security Comes First and Jim Cramer Defends His Dell Stance as Investors Complain About Missing Out. Disclosure: None.

When you buy through links on our articles, Future and its syndication partners may earn a commission. The main equity indexes rebounded from Thursday's sharp sell-off, but all three were down for the week. The trend for Treasury yields across the maturity spectrum reflects growing concerns about persistent inflation, government debt and how the Federal Reserve will respond. At the closing bell on Friday, the blue-chip Dow Jones Industrial Average had added 1.0% to 53,277, but still finished the week lower by 0.8%. The tech-heavy Nasdaq Composite was up 0.4% to 26,180, narrowing its weekly decline to 2.1%. The S&P 500 rose 0.4% to 7,674, though the broad-based index lost 1.4% this week. "It's not surprising that the S&P 500 pulled back modestly after its early-August breakout to new record highs," observes Daniel Skelly, head of research and strategy for Morgan Stanley Wealth Management. "But the move may have taken on additional significance in some circles, given the role tech softness played." Skelly notes that although we may see more volatility in the near term due to seasonal factors, "the longer-term AI capex story remains positive." Meanwhile, the bond market continues to adjust to a Treasury Department plan announced on Wednesday to increase buybacks of longer-dated debt. The yield on the 2-year Treasury was up to 4.232% vs 4.185% on Thursday. The 2-year was at 4.171% last Friday. The 10-year Treasury ticked up to 4.736% from 4.698% on Thursday and 4.696% a week ago. The 30-year Treasury climbed to 5.274%, up from 5.237% yesterday and 5.266% at the end of last week. Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day. Fed Chair Kevin Warsh will deliver the keynote address at the Kansas City Fed's annual Jackson Hole Economic Symposium on Friday, August 28, the highlight of next week's economic calendar. According to University of Pennsylvania Wharton School Professor Patrick Harker, a former president of the Philadelphia Fed, "Warsh is going to have to address the elephant in the room, which is inflation." Nvidia (NVDA, -1.0%) will offer fresh evidence for Skelly and others who see more support for stocks from AI capex when the chipmaker takes another turn on the earnings calendar after the closing bell next Wednesday. Wall Street expects management to report year-over-year earnings growth of 99.0% on annual revenue growth of 97.0%. "Notably," Susquehanna analyst Christopher Rolland writes in a preview of Nvidia's report, "AI demand is supported by increasing hyperscale capex plans. The top five hyperscalers are now expected to nearly double capex spend in 2026." Track all markets on TradingView Rolland also highlights a constructive outlook for 2027, when capex is expected to exceed $1 trillion. "We still view Nvidia as having one of the largest opportunity sets ahead," the analyst concludes. Indeed, as Louis Navellier of Navellier & Associates writes, "Due to the anticipation of Nvidia's spectacular quarterly results, plus the fact that the financial media will be all excited about their annual trip to Jackson Hole for the annual Kansas City Fed Conference, investor optimism is expected to be sky-high next week." Robinhood Markets (HOOD, +12.9%) led S&P 500 stocks higher on Friday after President Donald Trump advocated for passage of federal legislation that would establish a regulatory framework for digital assets such as bitcoin during a White House summit on Thursday. "We need Congress to take the next step by passing the Clarity Act — a fair version of the Clarity Act," Trump said in remarks prepared for the event. "It's a very, very powerful structured legislation which will keep us ahead of China, keep us ahead of everyone else, will open the door to the next wave of innovations and innovators." Track all markets on TradingView Crypto trading platform Coinbase Global (COIN, +8.2%) and bitcoin treasury company Strategy (MSTR, +6.1%) have also rallied on the president's recent endorsement of a broad bill to support digital assets. Moderna (MRNA, +8.9%) was the second-best performer in the S&P 500, following its 177% rise on Wednesday and 24% fall on Thursday with another dramatic move. Merck (MRK, +2.4%), Moderna's partner on the melanoma cancer vaccine that triggered this week's volatility, was second only to Goldman Sachs (GS, +3.7%) among Dow Jones stocks. Earnings Calendar and Analysis for Next Week What to Look Out for in Economic Data Next Week The Best Vanguard Bond Funds to Buy

AbbVie's growth engine is firing on all cylinders, but on its latest earnings call, analysts focused on whether the company can defend its turf and execute on its next big pipeline bet. AbbVie (ABBV) is on a roll, with the stock up 29% in the past year and trading about 6% below its 52-week high. The company just posted a quarter of solid sales growth, beating expectations and raising its full-year guidance. But its latest call wasn't a victory lap. Instead, analysts focused sharply on whether this powerful momentum is built to last, probing the defensibility of its growth in the face of emerging competition and complex trials ahead. Is The SKYRIZI Moat Holding? The first test came on SKYRIZI, the immunology drug driving much of the company’s success with sales up 24% this quarter. The worry is straightforward: a new oral competitor has entered the psoriasis market, threatening to chip away at SKYRIZI’s dominance. For investors, this is a direct challenge to the durability of AbbVie’s primary growth engine. Management’s answer was direct and backed by data. They reported seeing “no degradation in any of our NBRx trends” since the competitor launched in March. In fact, they claimed that new prescription growth for SKYRIZI has actually accelerated. The company’s read is that the new drug is expanding the market for advanced therapies rather than stealing share. It was a confident, numbers-backed defense of their most important franchise. A Blind Spot In The Pipeline? The second challenge was more forward-looking, aimed at the next potential blockbuster franchise in hidradenitis suppurativa (HS), a chronic skin condition. AbbVie has two major assets, lutikizumab and RINVOQ, with crucial data coming soon. But one analyst highlighted a uniquely modern risk: the widespread use of GLP-1 weight-loss drugs. Because weight loss can reduce inflammation, the concern is that these drugs could “contribute to high placebo rates” in the trials, potentially masking the true benefit of AbbVie’s drugs and jeopardizing the studies. Management acknowledged the dynamic, explaining that the trials are large enough that any GLP-1 effect should appear in both the placebo and treatment groups, effectively canceling it out. The response was logical, but it left the risk on the table. Unlike the clear-cut defense of SKYRIZI, this answer underscored a real, external variable that could complicate a critical pipeline readout. Execution Now, Execution Next Ultimately, AbbVie’s management team successfully argued that its current commercial execution is holding strong against new competition. The stock's outperformance has been notable, and we recently looked at how ABBV stock moved away from its peer group. The call, however, shifted the focus from today's precision to tomorrow's pipeline. For investors who like the theme but not the single-stock risk, a broad healthcare ETF like XLV offers diversified exposure. The answer will come from the data. Management confirmed that results from the pivotal HS trials for both RINVOQ and lutikizumab are expected “later this year.” Investors should watch for any sign of elevated placebo rates in those HS trial results, as that will be the first real test of whether AbbVie’s pipeline execution is as solid as its current sales machine. Where One Stock's Open Questions Fit A Bigger Plan Every stock carries unresolved questions like these, and no earnings call settles all of them. Owning a sector fund spreads that risk across more names, but it is still one bet on one theme: when the theme wobbles, the whole basket wobbles with it. The Trefis High Quality (HQ) Portfolio takes the next step out. It holds about 30 businesses diversified across sectors, selected not on a theme but on quality itself: consistent cash generation, strong margins, and resilient balance sheets. No single unresolved debate, and no single industry, carries your result. It has a track record of outpacing a benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. Track the debates on names you like, on top of a core built on quality rather than any one story.

Merck's second quarter was marked by continued sales growth, primarily driven by the strength of its oncology portfolio and contributions from new product launches. Management credited higher demand for KEYTRUDA in both early-stage and metastatic cancers and robust performance in Animal Health as core drivers. CFO Caroline Litchfield highlighted, “Our strong commercial and operational execution continues to drive near-term performance while we invest in our outstanding pipeline.” While market reaction was muted, management acknowledged the impact of higher operating expenses, including acquisition-related charges, on overall profitability. Is now the time to buy MRK? Find out in our full research report (it’s free). Revenue: $16.61 billion vs analyst estimates of $16.27 billion (5.1% year-on-year growth, 2.1% beat) Adjusted EPS: -$0.13 vs analyst estimates of -$0.26 (49.5% beat) The company slightly lifted its revenue guidance for the full year to $66.8 billion at the midpoint from $66.4 billion Management lowered its full-year Adjusted EPS guidance to $2.71 at the midpoint, a 46.9% decrease Operating Margin: -3.5%, down from 31.6% in the same quarter last year Constant Currency Revenue rose 4% year on year (-2% in the same quarter last year) Market Capitalization: $323 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Akash Tewari (Jefferies) asked about the potential for a broad sac-TMT plus pembrolizumab trial in first-line lung cancer. Dr. Dean Li, President of Research Labs, confirmed plans for such trials and discussed strategies for differentiating in crowded indications. Umer Raffat (Evercore) inquired about how TL1A activity compares to established TNF inhibitors in new indications. Dr. Li detailed Merck’s confidence in TL1A, particularly in gastrointestinal and dermatological diseases, citing biomarker data and positive trial results. Geoffrey Meacham (Citi) questioned the expected pace of LIPFENDRA’s commercial adoption and the role of outcomes trials. CEO Robert Davis noted high initial interest but set expectations for a gradual ramp as payer access develops. Michael Yee (UBS) probed the ulcerative colitis program and setbacks in fibrosis studies. Dr. Li explained the challenges of the SSc-ILD study and maintained confidence in the broader immunofibrosis strategy. Jason Gerberry (Bank of America) asked about market expansion potential for oral PCSK9s in primary care. Davis emphasized Merck's focus on expanding the market beyond injectable PCSK9 share, targeting millions not at LDL goals. In future quarters, StockStory analysts will monitor (1) continued adoption and access for LIPFENDRA and IDVYNSO, (2) pivotal clinical trial readouts for sac-TMT, tulisokibart, and key HIV assets, and (3) the pace of margin recovery as integration costs and R&D investments are absorbed. Ongoing product launches and regulatory milestones will be important markers of execution. Merck currently trades at $129.75, up from $127.77 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 9:00 a.m. ET Senior Vice President, Investor Relations - Peter Dannenbaum Chairman and Chief Executive Officer - Robert Davis Chief Financial Officer - Caroline Litchfield President of Research Labs - Dean Li Need a quote from a Motley Fool analyst? Email [email protected] Operator: Thank you for standing by. Welcome to Merck & Company, Inc., Rahway, New Jersey USA, Second Quarter Sales and Earnings Conference Call. [Operator Instructions] This call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to Mr. Peter Dannenbaum, Senior Vice President, Investor Relations. Sir, you may begin. Peter Dannenbaum: Thank you, Shirley, and good morning, everyone. Welcome to the Second Quarter 2026 Conference Call for Merck & Company, Inc., Rahway, New Jersey USA. Speaking on today's call will be Rob Davis, Chairman and Chief Executive Officer; Caroline Litchfield, Chief Financial Officer; and Dr. Dean Li, President of Research Labs. Before we get started, I'd like to point out that we have items in our GAAP results such as acquisition-related charges, restructuring costs and other items that we have excluded from our non-GAAP results. There is a reconciliation in our press release. I will also remind you that some of the statements that we make today may be considered forward-looking statements within the meaning of the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Such statements are made based on the current beliefs of our company's management and are subject to significant risks and uncertainties. If our underlying assumptions prove inaccurate or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. Our SEC filings, including Item 1A and the 2025 10-K, identify certain risk factors and cautionary statements that could cause the company's actual results to differ materially from those projected in any of our forward-looking statements made this morning. Merck & Company Incorporated Rahway, New Jersey, USA, undertakes no obligation to publicly update any forward-looking statements. During today's call, a slide presentation will accompany our speakers' prepared remarks. These slides, along with the earnings release, today's prepared remarks and our SEC filings are all posted to the Investor Relations section of our company's website. With that, I'd like to turn the call over to Rob. Robert Davis: Thank you, Peter. Good morning, and thank you for joining today's call. I remain very pleased with the substantial progress we're making across our business, driven by strong execution, growing contributions from new product launches and the continued advancement of the next wave of innovation from our pipeline. Earlier this year, we provided insight into greater than $70 billion of commercial opportunity we have from over 20 new products that we expect will transform our portfolio and, in many cases, the practice of medicine as well as fuel growth well into the next decade. We also outlined a series of clinical milestones that represent key events to substantially derisk this opportunity. Since then, we've made meaningful advancements against that objective, including several important proof points that have occurred earlier than expected. This progress further bolsters my high confidence in the future of our company and our ability to create long-term value for patients and shareholders. Turning to our second quarter results. We delivered revenue of $16.6 billion, reflecting continued strength across Oncology and Animal Health as well as increasing contributions from our recent launches. Importantly, while we're delivering for patients today, we're also making substantial investments in the next generation of innovative medicines and vaccines. We remain confident in our outlook for the remainder of the year, which Caroline will discuss in more detail in a moment. We also achieved several important clinical and regulatory milestones. In Cardiometabolic, the FDA approved LIPFENDRA, the first and only oral PCSK9 inhibitor to help reduce LDL cholesterol in adults with hypercholesterolemia along with diet and exercise. We're pleased to have worked with the FDA through the Commissioner's National Priority Voucher process to bring this important new treatment option to patients on an accelerated basis. We look forward to providing broad access for patients to help address elevated LDL-C, a major modifiable risk factor for cardiovascular disease. In Oncology, we received several approvals that underscore the ongoing impact of KEYTRUDA and the enduring strength of our oncology portfolio. At ASCO, we presented encouraging data that further demonstrate the durability of KEYTRUDA and at our investor event, we highlighted advances for a number of promising candidates across our pipeline. This included the first positive top line results from our expansive Phase III global clinical development program for sac-TMT, our TROP2-directed antibody-drug conjugate in certain patients with advanced or recurrent endometrial cancer. In Immunology, we announced positive Phase III top line induction results for tulisokibart for certain patients with ulcerative colitis and are starting to see the first of numerous additional trial readouts, reinforcing our confidence in the potential of this program. And at the AIDS 2026 Congress last week, we shared compelling data from our broad HIV pipeline, including for islatravir in combination with lenacapavir, which has the potential to be the first oral once-weekly HIV treatment for virologically suppressed adults. We are excited to be returning to the HIV field with an array of important therapies, including the recent launch of IDVYNSO. Ahead of the meeting, we also announced initial access plans for Alimatravir, our investigational once-monthly oral HIV prep candidate now in Phase III studies, underscoring our commitment to help enable broad and sustainable access to this candidate upon its potential approval. We also continue to augment our portfolio through disciplined business development. During the quarter, we completed the acquisition of Terns Pharmaceuticals, adding MK-4208, a novel, potentially best-in-class therapy for certain patients with chronic myeloid leukemia. This transaction strengthens our hematology pipeline, adds another promising late-stage growth opportunity and reflects our continued focus on pursuing science-driven business development that can benefit patients and enhance long-term shareholder value. This quarter marks my fifth year as CEO. And as I reflect on the commitments our leadership team made in 2021, our strategy was clear: maximize the transformative potential of KEYTRUDA, expand, deepen and extend our leadership in Oncology, bring forward new growth drivers across additional therapeutic areas and advance Merck's mission of using the power of leading-edge science to save and improve lives around the world. Today, I'm proud that we are successfully executing on that strategy. Each year, we're making important progress in building a stronger foundation for our future. We're broadening and diversifying our pipeline, advancing multiple potential blockbuster opportunities and achieving clinical, regulatory and commercial milestones that will benefit patients and enhance our long-term growth trajectory. I believe Merck is substantially stronger, more diversified and better positioned for sustainable growth than it was just 5 years ago. While more work remains, I'm increasingly confident in Merck's future, particularly with the rapid pace of clinical and regulatory events now occurring. This confidence is grounded in the strength of our science, our disciplined approach to capital allocation, including business development, and the dedication of our colleagues around the world who work every day to deliver for patients. I want to extend a special word of thanks to our global team for the substantial progress and for their commitment and execution on behalf of patients, shareholders, and all of our stakeholders. And now I'll turn the call over to Caroline. Caroline Litchfield: Thank you, Rob. Good morning. We delivered growth in the quarter, led by continued strength in Oncology and Animal Health along with increasing contributions from our diverse and compelling new products across an array of therapeutic areas. Our strong commercial and operational execution continues to drive near-term performance while we invest in our outstanding pipeline to create long-term value for patients, customers and shareholders. Now turning to our second quarter results. Total company revenues were $16.6 billion, an increase of 5% or 4% excluding the impact of foreign exchange. The following revenue comments will be on an ex- exchange basis. In Oncology, sales of the KEYTRUDA family of products which includes KEYTRUDA and KEYTRUDA QLEX, increased 4% to $8.4 billion, with global growth driven by strong uptake in earlier-stage cancers and continued robust demand from metastatic indications. Strong utilization in tumors that primarily affect women, including breast and cervical cancers and increased use of KEYTRUDA in combination with Padcev in locally advanced or metastatic urothelial cancer were key contributors to growth. Sales of KEYTRUDA QLEX were $463 million. We have seen physician and patient adoption increase since the permanent J-code was established in April. As expected, early use has been predominantly in patients who are either on monotherapy or in combination with an oral agent. We remain confident in the trajectory of KEYTRUDA QLEX adoption. Our broader oncology portfolio delivered another quarter of strong growth. WELIREG sales increased 67% to $271 million, driven by continued uptake from international launches and increased use in certain U.S. patients with previously treated advanced renal cell carcinoma. We are excited that certain patients with earlier stage renal cell carcinoma may benefit from adjuvant treatment with WELIREG following the recent FDA approval of LITESPARK-022. In vaccines and infectious diseases, GARDASIL sales were $1.2 billion, an increase of 3%. Sales in international markets grew 6% while the U.S. was roughly flat as lower demand and timing of CDC purchases was largely offset by price. In pneumococcal, CAPVAXIVE sales were $184 million an increase of 40%. Growth was primarily driven by uptake from ongoing launches in certain international markets as well as higher demand in the U.S. In HIV, we are pleased to have launched IDVYNSO, our once-daily oral 2-drug single-tablet regimen of doravirine and islatravir for certain virologically suppressed adults. We have seen encouraging early progress on access and reimbursement and look forward to broadening access over time. In cardiometabolic and respiratory, WINREVAIR global sales were $588 million, an increase of 75%, reflecting continued strong demand from adults with pulmonary arterial hypertension. In the U.S., we saw further progress with more than 1,800 new patients having received a prescription and an increase in the proportion of patients whose background therapies do not include a prostacyclin. Outside the U.S., we continue to progress with ongoing launches. OHTUVAYRE sales were $204 million, reflecting continued prescription demand from patients with COPD as well as the benefit from the timing of specialty pharmacy purchases. Our Animal Health business delivered another quarter of solid growth with sales increasing 5%. Livestock sales grew 6%, driven by higher demand for ruminant and poultry products. Companion animal sales increased 5% due to new product launches. I will now walk you through the remainder of our P&L, and my comments will be on a non-GAAP basis. Gross margin was 81.1%, a decrease of 1.1 percentage points, primarily due to higher inventory reserves. Operating expenses increased to $12.6 billion. There was a $5.7 billion charge for the acquisition of Terns Pharmaceuticals in the quarter compared with a $200 million business development charge a year ago. Excluding these charges, operating expenses grew 7%, reflecting increased investments in support of our launches as well as our robust early and late-phase pipeline, partially offset by benefits from our multiyear optimization effort and recognition of a portion of the external funding for sac-TMT development. Other expense increased to $290 million, primarily reflecting financing costs related to recent business development transactions. Our tax provision was $882 million. As a result of the nontax deductible onetime charge for Terns, our tax rate was 160.3%. Taken together, we reported a loss of $0.13 per share, which includes a onetime charge of $2.31 per share from the acquisition of Terns. Now turning to our 2026 non-GAAP guidance. We have raised and narrowed our full year revenue guidance range to be between $66.3 billion and $67.3 billion, representing growth of 2% to 4%, including a positive impact from foreign exchange of approximately 1 percentage point using mid-July rates. Gross margin is now assumed to be approximately 81%, reflecting higher inventory reserves. Operating expenses are expected to be between $42 billion and $42.7 billion. This range includes $5.8 billion for the upfront charge for Terns and investment to advance MK-4208. This guidance does not assume additional significant potential business development transactions. Other expense, which now includes the financing costs for Terns, is expected to be approximately $1.4 billion. We now expect a full year tax rate between 35% and 36%, which reflects the nontax deductible onetime charge for Terns. We assume approximately 2.48 billion shares outstanding. Taken together, we expect EPS of $2.66 to $2.76 with a midpoint of $2.71, including a positive impact from foreign exchange of approximately $0.15 using mid-July rates. This range also includes an upfront charge of $2.31 per share related to the acquisition of Terns as well as approximately $0.12 per share of ongoing costs to advance MK-4208 and finance the transaction. As you consider your models, there are a few items to keep in mind for the second half of the year. First, for OHTUVAYRE. We remain excited about OHTUVAYRE's strong clinical profile and look forward to achieving its multibillion-dollar commercial potential in the coming years. Third quarter sales will be impacted by the unwind of specialty pharmacy purchases in the second quarter. We continue to invest behind our sales force and promotion to reach more physicians and patients in the U.S. We are also working with our specialty pharmacies to improve patient experience. We expect these actions to lead to accelerated growth in 2027. Next, we anticipate that total U.S. KEYTRUDA year-over-year growth will moderate as we increasingly reach peak penetration across several key indications. Additionally, as a reminder, we benefited by approximately $250 million due to the timing of wholesaler purchases in the third quarter of 2025, which will not repeat this year. For BRIDION, U.S. sales are anticipated to decline at a slower pace than previously expected due to lower-than-anticipated generic competition. Finally, other revenue in the second half of 2026 is expected to be significantly higher than the second half of 2025. This increase is primarily due to our revenue hedging program as well as an expected milestone receipt in the fourth quarter related to an out-license agreement. Now turning to capital allocation, where our strategy remains unchanged. We will continue to prioritize investments that support near- and long-term growth, including our new product launches and robust pipeline. We remain committed to the dividend with the goal of increasing it over time. Business development remains a high priority, and we maintain the ability within a strong investment-grade credit rating to pursue additional science-driven, value-creating transactions. We are on pace for approximately $3 billion in share repurchases this year, as previously communicated. To conclude, as we enter the second half of the year, we remain confident in the outlook of our business, supported by global demand for our innovative medicines and vaccines, including our many new product launches. The transformation of our portfolio is underway, and we are well positioned to deliver value for patients, customers and shareholders now and into the future. With that, I'd like to turn the call over to Dean. Dean Li: Thank you, Caroline. Good morning, everyone. The second quarter was marked by several important regulatory and clinical milestones. Today, I will provide updates in cardiometabolic disease, HIV, infectious disease, immunology and oncology. I will conclude with key upcoming milestones as we look toward the second half of 2026. First, in cardiometabolic disease, as Rob mentioned, we recently received FDA approval for LIPFENDRA, the first approved oral PCSK9 inhibitor. In the CORALreef Lipids trial, LIPFENDRA was shown to be highly effective in lowering LDL cholesterol with up to a 60% reduction when added to a statin. Earlier this year, updated U.S. guidelines on the management of dyslipidemia from the American College of Cardiology and American Heart Association recognize that atherosclerotic cardiovascular disease remains the leading cause of morbidity and mortality and underscore the need for earlier intervention to help reduce lifelong risk from prolonged elevated lipoprotein exposure. Guidelines also reestablished and lowered LDL-cholesterol treatment goals, including to under 55 milligrams per deciliter for individuals with ASCVD who are at very high risk of ASCVD events. The approval of LIPFENDRA is a major milestone in our effort to make PCSK9 inhibition accessible in a convenient daily oral option. As an oral macrocyclic peptide, LIPFENDRA has the potential to extend the reach of this therapeutic approach globally. Additional regulatory reviews are underway in the European Union and China. We are also advancing combination approaches designed to further reduce LDL cholesterol and target additional ASCVD risk factors. Studies are ongoing to support the development of 2 potential fixed-dose combinations anchored by LIPFENDRA -- one with rosuvastatin and another with MK-7262, our oral LP(a) inhibitor. Turning to HIV. Yesterday, we hosted an investor event focused on our HIV program, including new data presented at AIDS 2026. IDVYNSO provides the foundation of what we believe will be a series of novel entries into the field. Our late-stage pipeline aims to address unmet needs for those living with or at risk of HIV through innovative oral options, including 2 once-weekly treatment regimens and a monthly oral option for pre-exposure prophylaxis. In collaboration with Gilead, we announced full results of the Phase III ISLEND-1 and 2 trials evaluating the investigational oral once-weekly regimen of islatravir and Gilead's lenacapavir both studies demonstrated maintenance of virologic suppression in adults living with HIV who switched to therapy from a daily standard of care. These results support the potential for ISL/LEN to become the first approved oral once-weekly treatment regimen for adults with virologically suppressed HIV. Results were also presented from a Phase IIb study evaluating the investigational oral once-weekly combination of islatravir and ulonivirine, an internally developed investigational non-nucleoside reverse transcriptase inhibitor in adults with virologically suppressed HIV. Based on these results, we plan to advance ISL/ULO into Phase III studies for people living with HIV who are previously untreated and those with prior treatment experience. We also continue to evaluate our monthly oral HIV prep option, alimatravir, in 2 Phase III studies anticipated to read out next year. Next, in infectious disease. We are progressing our Phase III study of MK-1406, an investigational long-acting strain-agnostic antiviral designed to prevent influenza. Enrollment was completed in the Southern Hemisphere. Plans are now in place to continue the study through a second Northern Hemisphere flu season to strengthen our global regulatory submissions. We remain on track for potential approval in 2029. Moving to immunology, tulisokibart became the first anti-TL1A monoclonal antibody to demonstrate positive results in a Phase III trial. In June, we reported on the induction-only study of the ATLAS-UC trial. In patients with moderately to severely active ulcerative colitis, tulisokibart met the primary endpoint of clinical remission as well as key secondary endpoint with no new safety concerns identified. We look forward to the upcoming readout of the larger induction and maintenance study, which together with the induction-only study would form the basis of a regulatory filing and will be presented at an upcoming scientific congress. These findings reinforce the potential of targeting TL1A to help address immunofibrosis, a key driver of disease progression across multiple immune-mediated inflammatory conditions. We have advanced a broad Phase II development program to further explore this hypothesis and now have results from 2 of these studies. In SSc-ILD, the study did not meet its primary end point. In hidradenitis suppurativa, we are pleased to share that the study met its primary and key secondary endpoints. Results will be shared in due course. Finally, in oncology, KEYTRUDA continues to generate compelling clinical data and regulatory approvals, including in earlier stages of disease. Recently, building on the approval of KEYNOTE-905, the FDA approved an expanded indication for KEYTRUDA and KEYTRUDA QLEX, each with Padcev, as treatment before and after surgery for adults with muscle-invasive bladder cancer based on the data from KEYNOTE-B15. This regimen is now approved regardless of cisplatin eligibility and is the first and only perioperative immunotherapy plus ADC regimen to extend survival for these patients. We are also pleased that the FDA recently approved KEYTRUDA and KEYTRUDA QLEX in combination with WELIREG for the adjuvant treatment of certain patients with clear cell renal cell carcinoma based on the LITESPARK-022 study. This marks WELIREG's first approval in earlier-stage disease and brings the total number of earlier-stage indications for KEYTRUDA-based regimens to 13. In June, at our ASCO investor event, we shared updates across our broad and diverse oncology portfolio. We also highlighted a series of pivotal readouts expected over the next several years. We are now beginning to see the first of those milestones materialize with the announcement of positive Phase III results from our global TroFuse development program evaluating sac-TMT. In TroFuse-005, sac-TMT demonstrated statistically significant and clinically meaningful improvement in both overall survival and progression-free survival versus chemotherapy in certain patients with advanced or recurrent endometrial cancer. We plan to apply the National Priority Review Voucher for sac-TMT towards our filing in endometrial cancer. These results represent the first readout from our global TroFuse program which includes 17 Phase III studies. The TroFuse program was intentionally designed to pursue both first-mover opportunities where sac-TMT can establish early leadership and indications in breast and non-small cell lung cancer where we can apply novel development approaches. This global effort continues to be informed by promising results generated by our partner, Kelun from their program evaluating sac-TMT in China. Positive results from the OptiTROP-Lung05 and, more recently, OptiTROP-Lung06 further strengthens our confidence in the potential of this differentiated TROP2-directed ADC. In closing, we anticipate a busy second half of the year. with multiple events and milestones, including in cardiometabolic and respiratory, the September 21 PDUFA date for WINREVAIR for the label update based on the Phase III HYPERION study, in immunology for tulisokibart, the second readout from the ATLAS-UC trial and the presentation of data from the Phase II HS study. In ophthalmology, data from the Phase III BRUNELLO study of remigromig, also known as MK-3000, our novel Wnt agonist, being evaluated in patients with diabetic macular edema. And finally, in oncology, potential approvals for WELIREG plus LENVIMA in advanced renal cell carcinoma and for I-DXd in extensive stage small cell lung cancer and data presentations from across our broad oncology portfolio, including detailed results of the Phase III TroFuse-005 study. Please mark your calendars for the evening of Monday, October 26, where we will host an investor event at the European Society for Medical Oncology in Madrid. I look forward to providing further updates on our progress. And now I will turn the call back to Peter. Peter Dannenbaum: Thank you, Dean. Shirley, we're now ready to begin Q&A. And we kindly request that analysts limit themselves to 1 question today so we can get to as many questioners in the time that we have. Thank you. Operator: [Operator Instructions] Our first question comes from Akash Tewari with Jefferies. Akash Tewari: Dean, you previously stated a biomarker strategy would be the right approach for first-line NSCLC. But with sac-TMT, we've seen a signal regardless of PD-L1 expression with the OptiTROP-Lung05 and 06 data. What are the chances we could see a broad sac-TMT plus pembro trial that goes head-to-head against KEYNOTE-189? And is it fair to say we could see sac-TMT combos with both pembro and a PD-1/VEGF for first-line lung? Dean Li: My simple answer is yes on all accounts, but I'll just step back a little bit, which is for sac-TMT, as we've stated, we think it's a cornerstone ADC. I mean it's a TROP2 ADC, but it has a novel linker and payload. And as described in the prepared remarks, we've sort of split the Phase III into 13 first mover where we go into indications where we thought we could be first. And actually, what we're hoping is the TroFuse-005 and then endometrial sort of gives validation to that strategy. And as we've noted, it's -- we've talked to the administration's FDA, and this will be the one that goes for national priority vouchers. In breast and lung, we've said that we need to be differentiated given other TROP2 ADCs. But as you point out, the Kelun OptiTROP-Lung05, 06 gives us a lot of confidence in the target and to target it across the full spectrum of PD-L1. So yes, we are going to rethink KEYNOTE-189, which is KEYTRUDA plus chemo. And now we have sac-TMT as an ADC as a next-gen chemo. I do think that we're going to be very thoughtful as to the IO agent and when we should use KEYTRUDA and when we should use other agents such as MK-2010. And as you might imagine, we're advancing MK-2010 -- with that in mind, we are moving quite fast in relationship to initiating trials, some that are signal finding, some that are dose and scheduling to optimize with novel agents, and we're advancing trials that can go from a Phase II to Phase III seamlessly. Operator: Our next question comes from Umer Raffat with Evercore. Umer Raffat: Dean, congrats on the HS trial update for the TL1A. I'm just trying to think out loud to what extent as we go into these new indications, is the activity we're seeing for these TL1As beyond what we would have expected from a TNF? I'm sure you can appreciate where I'm coming from on this. Dean Li: Yes. Thank you very much. So just to step back a little bit, I think the question is posed in the fact that TL1A is a member of the TNF superfamily. The TNFs have been really important drugs. They have been advanced. There is often problems with combining them because of their safety signal. In relationship to what we've seen so far, clearly, when you think about immunology, you think of 3 buckets, you think of GI, you think of derm and you think of rheumatology. In GI, clearly, we're very eager to move forward in ulcerative colitis and Crohn's disease, and we're really eager to see the other half of the UC study. In the derm sort of space, we have it in HS. And I think that's important as well as we have psoriatic arthritis. I think the positive readout for HS gives us more confidence in the derm sort of possibilities for this drug. And so that's where we're looking at. I still think that within the rheum space, which is, let's say, RA and to some degree, psoriatic arthritis, we'll have to sort of play that out as the data comes out. But I can just tell you, for example, for rheumatoid arthritis, we have very clear biomarker data suggesting we should go after TL1A. And clearly, in something like rheumatoid arthritis, there are animal models in preclinical where you can guesstimate what your activity is, and we have that data that gives us the strength to move forward in rheumatoid arthritis. Operator: Our next question comes from Terence Flynn with Morgan Stanley. Terence Flynn: Two-part for me. I was just wondering, Dean, if you could help us think about ahead of the Astra data AVANZAR data, what you'd be most interested to see in that data set and implications for your sac-TMT development strategy? And then anything you can say, I know it's a Kelun study, but OptiTROP-Lung06 just in terms of control arm performance in that trial, any comments? Dean Li: Yes. So let me take the last question first. We have a great partner in Kelun. We see very detailed data, and we are very comfortable with the data that they've shown us, and it gives us great confidence in moving forward. I would just highlight that some of the data that we saw is why we, for example, moved quickly to endometrial. So we have a lot of confidence in how they run their clinical trials and their data. I forgot the first half again. Peter Dannenbaum: AVANZAR. Dean Li: AVANZAR. I think the critical thing is, I think the AVANZAR -- I think we're waiting to see what the readout looks like. We're looking to see what it looks like in all-comers, what we look like in relationship to biomarker selected. And that will give us some views as to how do we advance ours, the need for a biomarker. You can always have a biomarker, but that doesn't mean that you always need it. And then the other sort of thing is how we think about advancing it in relationship to combination with an excellent PD-1 like KEYTRUDA or whether or not we should move it forward with an excellent PD-1/VEGF. Operator: Our next question comes from Michael Yee with UBS. Michael Yee: On TL1A, 2-part question. You had one positive Phase III in UC, but not a whole lot was said. So how do you think we should think about the profile in ulcerative colitis, appreciating the second study is coming? And then it's supposed to be all about fibrosis, but then the SSc study wasn't positive today. So how does that change your thinking around Crohn's and that fibrosis opportunity? Dean Li: Yes. So thank you very much for that question. In terms of the tulisokibart Study 2, I mean, we're very eager to see Study 1 because together, that will be the package that we sent to the FDA. And we are looking forward to that readout as we advance it. Again, in Crohn's disease, there's a signal, a clear signal, not just from us, but from others, and it's what do we see in Phase III. So I think we're very interested in moving those forward. You can look at some of the derm and the rheum indications that I spoke about. They will also have fibrosis component. In relationship to SSc-ILD, I would just state -- I would just step back. I don't know any anti-cytokine that has worked. So this was a bold move to move that forward. It's a challenging and refractory disease. We see no safety concerns. But I will tell you that when we publish that data, as you might imagine, we will, I look very carefully at the placebo arm. If I see no progression in the placebo arm, it is in SSc-ILD. But if I have no progression in the placebo arm, the chances that I will be able to show benefit in a treatment arm becomes much more difficult. So I would not throw out the immunofibrosis based on the SSc-ILD study not reading out positive in the specific patient population we recruited. Operator: Our next question comes from Geoff Meacham with Citi. Geoffrey Meacham: Dean, on the LIPFENDRA launch, I wanted to ask how you guys view the pace of maybe initial access. I wasn't sure what the right reimbursement expectation or if you thought the outcomes trial maybe would be more needed as a commercial tipping point. Dean Li: So why don't I turn the commercial to Rob, if that's okay. And then I can answer the remaining questions from a scientific standpoint. Robert Davis: Yes. Great. Thanks for the question, Geoff. If you look at it overall, I would just say we're very pleased with what we're seeing so far. Obviously, you saw the label. We have a very clean label, one we feel very good about. And with the fact that we have up to 60% LDL lowering, I think this is going to be a meaningful treatment. We're seeing very high interest from physicians and patients based on the approval announcement and ordering has begun last week, and we expect to be able to have it to pharmacies here shortly. As we look at it from an access perspective, overall, we're, I think, in pretty good shape. You remember, we really tried to set this up for broad access in the way we priced it and the way we're going. That said, we do believe it's going to take time to get that access established. So we are expecting to see the pace not be as fast out of the gate, but with long term, continue to expect to see this to be definitely a blockbuster opportunity as we move forward. I'll let Dean speak specifically to the broader question from a science perspective. Dean Li: Yes. So one thing I do want to highlight is there's often a lot of discussion of this FDA or this administration FDA. I can tell you in our conversations with this administration's FDA, they wanted to use LIPFENDRA as a cornerstone way to demonstrate what they're trying to do with their priority sort of review. Most of the programs in that priority review only touch one of the sort of the pillars of what they're trying to do. But they were very clear to us they want us to touch all of these pillars. And those pillars is to target public health crisis, an innovative breakthrough, a large unmet need, especially in chronic disease, which is a pillar of this HHS. They were very clear they want onshoring and supply chain and resilience in the U.S., and they were very interested in accessibility in relationship to increasing accessibility. So those 5 sort of pillars, that's what the FDA and us are racing to do as we launch this important product. Operator: Our next question comes from Chris Schott with JPMorgan. Christopher Schott: I guess with the pipeline derisking we've seen over the past year, can get any directional views or updated color on what you're envisioning Merck's earnings profile could look like as we move through the KEYTRUDA LOE? I know the focus of the company is more on the return to growth as we look out into the early 2030s. But just would be any thoughts on that transition period of earnings could look like over that, let's say, 2028 through early 2030s period. Robert Davis: Yes, Chris, thanks for the question. As we've said in the past, we feel very good about the progress we're making with the over 20 products we have coming, $70 billion of commercial opportunity, and we've already started to see meaningful clinical derisking happening at a pace faster than we expected as well as good solid launches from the products that have launched. So as we sit here today, we feel very good, as I've said in the past, we see that as the LOE period is more of a hill than a cliff. Nothing has changed in our view. I do think you're going to see a shallow dip with a fast return back to growth. And candidly, if we look at it on a non-risk-adjusted basis, we still aspire to grow through it. There still is the potential more to do to achieve it, but we're working to get there. So as I sit here today, I feel very good about where we are and the progress we're making. Always more to do, but I feel good about the hand we have right now. Operator: Our next question comes from Courtney Breen with Bernstein. Courtney Breen: Just one on LIPFENDRA, following up on the comments regarding kind of fixed-dose combinations. You highlighted rosuvastatin in your own Lp(a). Particularly with rosuvastatin, I would love to hear a little bit about how you're thinking about which dose you might consider. Is this just for those patients that need further escalation once they've made it to the 40 mg, recognizing there's some more adverse events there? And then secondarily, are you looking at kind of continuing other combinations? We've heard GLP-1 combinations with the PCSK9s from peers and wanted to understand if you're still advancing or considering this opportunity. Finally, we haven't seen yet pop up on TumpRx. Just wondering kind of when we can expect that access channel to begin to become available. Dean Li: Why don't I let the TrumpRx go to Rob and then I'll take the rest of them? Robert Davis: Yes. We're excited about the opportunity. And as you know, in our MFN agreement, we did commit to putting LIPFENDRA on TrumpRx. Those plans are underway. We're working on obviously getting the initial launch moving. And as soon as we get that going, we'll get it on TrumpRx. So more to come on timing there. Dean Li: Yes. In relationship to your combination questions, thank you very much. I mean, right now, we have an oral PCSK9 that was designed based on the learnings of the antibodies, and we have been able to achieve up to 60% reduction in LDL cholesterol. We are hoping that with rosuvastatin, we would provide to be all the doses. But with that combination, we think that we could get up to 80%. I mean if we could get up to 80% in a combination, that's a good day for medicine. So those are the sort of way that we think about the rosuvastatin. For the Lp(a), we'll have to see what the Lp(a) actually does in relationship to the reduction. But we are hoping that in a patient who has high Lp(a) that our combination will be able to give unprecedented CVOT outcomes in relationship to that. In relationship to GLP, we have focused and said that we're focused on oral combinations. And there is clearly the ability to combine GLP and PCSK9. One of the things that we are very thoughtful about is that for the GLPs, you kind of do the step-up sort of dosing. There's a lot of nausea and vomiting. So we can combine GLP plus PCSK9. But so far, we have not announced that, that's a combination that we're actively doing in clinical trials -- in the clinical trials website at this point. Operator: And this question comes from Jason Gerberry, Bank of America. Jason Gerberry: Just another LIPFENDRA question. How do you guys think about the opportunity for injectable PCSK9 switch versus the bulk of the opportunity more in PCSK9 naive patients? And one thing that we've noticed is with injectable PCSK9 relative to statins is pretty low use in the primary care setting. So how do you see kind of the availability of now an oral when you say democratize access the sort of adoption dynamics in the primary care setting? Robert Davis: Yes. Thanks for the question. As we've said many times, we are not focusing this market on how do we take share from the injectable PCSK9. If you look today, injectables only reach about 5% or less of the total market. We're sitting today here in the United States with 30 million people receiving lipid-lowering therapies, but -- who are not at their recommended LDL levels and who -- even more who go untreated. So the potential here is much bigger. What we are about is market expansion and helping people understand that cardiovascular disease continues to be the #1 silent killer in the United States. We now have a drug that reduces LDL, which is one of the leading causes of arteriosclerosis leading to that cardiovascular death by up to 60% on top of statins and everyone who is at risk should be on one of these medications. So our goal is to expand, build the market, educate the market, and we're doing that with what we're doing with the guidelines. Obviously, this will all take time because there is inertia we're working against. But if we are successful, this frankly, should raise the water for all boats and not be one where we're taking share. Dean Li: Yes. And in relationship to the inertia, I think like, for example, the American Heart Association, the American College of Cardiology and other important associations realize the inertia. So they specifically changed the guidelines. And for right now, for example, for secondary ASCVD, they actually said the vast majority of that secondary ASCVD should be less than 55. There's another patient population that could be less than 70, but the vast majority of people with secondary ASCVD should be less than 55, which is consistent with what Europe and other countries do. And in the prepared remarks, I did say that we are not just advancing this with an approval and a launch in the U.S., but we're under regulatory sort of discussions and review with the European Union as well as China. Caroline Litchfield: And to add to the comments that Rob and Dean have made, -- what we've seen thus far is extremely strong feedback from key scientific leaders, understanding the change in the guidelines, understanding what this product can do to help patients. What we need to do is to translate that to the primary care setting. So that will take some time for us to do so, but our sales teams will be focused on ensuring the right education to the primary care setting as well as to patients on the importance of this medicine. Operator: Your next question comes from Mohit Bansal with Wells Fargo. Mohit Bansal: I have a question regarding the flu drug program, CD388. Can you talk a little bit about -- like what were the reasons why you decided to add one more season of Northern Hemisphere here? And I think the big question here is that was this decision based on any data you have seen? Or is this just to satisfy the regulatory components rather than any confidence or lack of confidence in the data so far? Dean Li: Thank you very much for that question. So just to highlight, this is a first-in-class once-per-season strain-agnostic antiviral that we're doing for the prevention of flu, especially for those people who are at high risk. What we have said all along is that we plan to launch in 2029. And that at the same time, I needed to do CMC work in relationship to getting it from 3 shots to 2 shots. And so that's the rate-limiting step. I also said that between now and that time, I would do everything to have the most robust label and the robust packages that would allow us to have a broadened footprint of sites to support a global registration and allow me to get the right value proposition in ex U.S. markets, especially something that we have to think in the day and age of MFN. We've also added key secondary endpoints, which is all-cause hospitalization, which I think will be critical in that pursuit. And finally, we're collecting data on subgroups and diverse circulating viral strains throughout the world as we do this. I was also very clear that I did not need and would not take an interim. I did not take or saw an interim. I am going to maximize what this molecule can do in the time frame that I need to such that I do nothing to imperil the launch timing of 2029, but that I have the most robust label as well as robust real-world evidence that will be important for health authorities. Robert Davis: Maybe just to summarize all that, there's no change in our confidence. Nothing we've seen in data. This is all about strength of filing given the fact that we have the time because we do have to do the bridging study that Dean mentioned. Operator: Our next question comes from Evan Seigerman with BMO Capital Markets. Evan Seigerman: Kind of a key theme from this call talked about the $70 billion potential opportunity that you talked about over the next wave of products. What's the biggest risk to achieving this number? And conversely, which programs in the past 6 months have increased your confidence? Robert Davis: Yes. Thanks for the question. I mean, obviously, I would say, if you look at where we have confidence from what we've seen, it's the fact that we're getting readouts faster than expected. When we talked about this back in January, we had highlighted sac-TMT as well as I-DXd as not having readouts until we got until 2027. We've now seen positive readouts from both. The Tuli has read out faster than we expected. Everything is moving. So as we sit here today, my confidence is higher than it was in January because we are seeing meaningful derisking. As you recall, at that time, we said there were 10 programs that represented 70% of the $70 billion. And the fact that so many of those are already having positive data, so we are clinically derisking them, and we're seeing good launches of those that are underway, including an accelerated launch of LIPFENDRA by several months. It's hard to frankly point to anything I'm worried about. I'm actually feeling quite bullish across the board. I got to knock on wood because things are going well. But credit to our scientific team and the strength of the clinical studies we put in place, I feel very good about where we are. Operator: Our next question comes from Asad Haider with Goldman Sachs. Asad Haider: Maybe for Dean, on the PD-1/VEGF bispecific program, just any updates on how the pace of that development is progressing and how you're thinking about any potential read across from Summit's HARMONi-3 data coming up? And any update on where you are with potential combination trials with the PD-1/VEGF and your ADC assets? And if I can just have a quick follow-up on TL1A. I know it's been discussed a lot already, but I just appreciate any context or color that you have on where you are with evaluating combination approaches, which is where the field in IBD seems to be moving towards. So how you thinking about TL1A as a single agent in terms of its competitiveness versus these combo trials that J&J and AbbVie are aggressively pursuing? Dean Li: Yes. Thank you very much. In relationship to the PD-1/VEGF sort of story, the way that I think about it is there's a large body of data in relationship to where PD-1 is active. We ourselves have 44 and other people have others. So there's that. There's also a body of evidence of where VEGF is active as well. So you look at that overlap, and that's the place that you would go first. The other sort of thing is that in some of those tumors, we have unique assets that can be combined and that we know are active. So we're going to focus our efforts on PD-1/VEGF in those 3 sort of Venn diagrams where we are uniquely able to move forward. We are very interested in following the Summit Akeso data. We think that, that's important data for us to follow. But this is our sort of general strategy of PD-1/VEGF in relationship to PD-1 where VEGF is active and where we have unique assets that we know are active that could combine. In relationship to combination, you're exactly right. The whole immunology field is trying to think about how it can go to combinations. There is -- there has been lots of combinations in the past. TNF and IL-23, there is some evidence that, that would be important. So when we look at TL1A, we're looking to have one of the most effective, if not the most effective anti-cytokine in whatever the indication we have. But we think it's also very important to know that the safety profile is extremely clean, which then makes it possible to do combinations. The combinations that you would do, for example, in IBD would be different than that of HS, which would be different than what you might do for rheumatoid arthritis. So for each one of those indications, we are looking at the profile of our TL1A and also asking what is the ideal combination for that indication. Operator: Your next question comes from Luisa Hector with Berenberg. Luisa Hector: It's another one on LIPFENDRA, please. Just the specific wording on the label, which talks about LDL reduction, but then that cardiovascular outcomes trials have shown to be -- have shown that you get a reduction in LDL also leads to the reduction in events, specifically for monoclonal antibody PCSK9 inhibitors. So just wanted to check whether that wording is a help or a hindrance as you speak to payers and as you go about your promotion? And then still on this CVOT topic, what is the timing of your LIPFENDRA CVOT? And can you comment on how you can ensure that drop in use of incretins for weight loss won't impact the result? Would you expect that to be balanced across arms if it does happen? Dean Li: Yes. So let me answer that question. I need to be a little bit careful to talk about what the intention of the FDA of putting whatever note that they put in the label. I think it's going to be extremely helpful. We believe that LIPFENDRA should be added on top of statins. So I think that's really important. We also know that the design principle, the design principles of LIPFENDRA, the agency understood was informed by the 2 antibodies out there. So I think that it could be helpful from a commercial standpoint, but I think that was the way that we -- that the FDA and our -- the discussion was. I should emphasize that we do not have CVOT right now, and we have an ongoing trial that will read out in 2029. Peter Dannenbaum: Great. Thank you, Luisa. We're going to end the call there. I know there's a peer call about to start. So thank you all for your time and attention this morning. We appreciate it. We look forward to catching up at your convenience. Operator: Thank you. This does conclude today's conference. We thank you for your participation. At this time, you may disconnect your lines. Before you buy stock in Merck, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Merck wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Merck. The Motley Fool has a disclosure policy. Merck (MRK) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Eli Lilly's growth is huge, but on its latest call, analysts tested whether the next chapter can possibly live up to the last one. After around 85% run over the past year, Eli Lilly (LLY) just posted a quarter with 48% revenue growth, numbers that can make a stock feel invincible. But for a company trading at this valuation, the only question that matters is what comes next. On its latest call, analysts repeatedly circled one central worry: with growth this strong, are the first cracks starting to show in the forward-looking story? The sharpest questions were not about the quarter that just closed, but about the new products and guidance that have to carry the momentum from here. The first challenge centered on Foundayo, the company’s new oral obesity drug and a critical piece of its future. If the injectable drugs built the franchise, the pill is supposed to broaden it to millions more. The problem, as one analyst framed it, is that the U.S. launch curve has looked “somewhat slower than anticipated.” This is a direct challenge to execution on a product investors are counting on to be the next large growth engine. The stakes are simple: a blockbuster launch keeps the story going, while a stumble gives competitors an opening and spooks investors in a high-multiple stock. Management’s response was to argue the inflection point is happening right now. The company reported that in the last week of July, it saw a significant uptick, “almost doubling the volume that we had just a month ago.” They added that new patient starts on Foundayo are now approaching one out of every four. It counters the “slow start” narrative by pointing to very recent momentum, but it also implicitly concedes the early weeks were softer. The answer was confident, but the proof will be in the coming months. The second point of pressure came on guidance. Lilly raised its full-year revenue forecast to a range of $85 billion to $87 billion, up from its prior estimate of $82.5 billion to $84.5 billion. But the math behind that raise seemed to imply a revenue deceleration in the second half of the year compared to the rapid pace of Q2. For a growth story this strong, any hint of a slowdown gets scrutinized. It forces the question of whether the current trajectory is truly sustainable. The CFO’s answer was direct and technical. He explained the apparent slowdown was an illusion created by a few factors: one-off items and prior-period rebate adjustments that artificially boosted first-half results, which won’t repeat. More importantly, he noted the second half of 2025 was unusually strong due to the “bolus” of Mounjaro launches in international markets, making for a tougher year-over-year comparison. This was a credible, numbers-driven explanation that defused the concern by reframing it as an issue of accounting and timing, not a fundamental weakening of the business. Management met the key challenges head-on, arguing that the growth story is fully intact. They answered the guidance question convincingly and provided specific, near-term data to counter worries about the Foundayo launch. But what remains an open question is whether the recent Foundayo inflection is a durable trend or just a short-term blip from new marketing and access programs. The one thing to watch next quarter is that prescription data. It will be the clearest signal of whether Lilly’s next growth engine has truly gained traction. For investors who want to look at a basket of similar names, a healthcare ETF like XLV offers broader exposure to the sector. Every stock carries unresolved questions like these, and no earnings call settles all of them. Owning a sector fund spreads that risk across more names, but it is still one bet on one theme: when the theme wobbles, the whole basket wobbles with it. The Trefis High Quality (HQ) Portfolio takes the next step out. It holds about 30 businesses diversified across sectors, selected not on a theme but on quality itself: consistent cash generation, strong margins, and resilient balance sheets. No single unresolved debate, and no single industry, carries your result. It has a track record of outpacing a benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. Track the debates on names you like, on top of a core built on quality rather than any one story.

Iovance Biotherapeutics IOVA incurred a second-quarter 2026 loss of 11 cents per share, narrower than the Zacks Consensus Estimate of a loss of 17 cents. In the year-ago quarter, the company reported a loss of 33 cents. Total revenues for the reported quarter rose 66% year over year to $99.3 million, generated entirely from the sales of the company’s two marketed drugs. The top line beat the Zacks Consensus Estimate of $87.3 million, as well as management's own guidance of $86-$88 million for the quarter. Iovance currently has two marketed drugs in its portfolio — the IL-2 product Proleukin and the TIL therapy Amtagvi. While Proleukin is approved to treat metastatic renal cell carcinoma and metastatic melanoma in adults, Amtagvi is approved for the advanced melanoma indication. The company recorded $90.7 million from Amtagvi sales during the second quarter, up 68% year over year and 51% sequentially.  The figure surpassed both the Zacks Consensus Estimate and our model estimate of $79 million. Amtagvi also outperformed the company's forecast of $79-$81 million. Proleukin sales rose 46% to $8.6 million, benefitting from its use alongside Amtagvi. The reported sales marginally beat the Zacks Consensus Estimate and our model estimate of $8.5 million. Management attributed the sequential decline from roughly $11 million in the previous quarter to the timing of wholesaler inventory stocking. Shares of Iovance jumped 43% yesterday to a 52-week high following the results, likely reflecting an encouraging investor response to Amtagvi's commercial momentum. Though the company did not immediately raise its revenue outlook, management said it is reviewing the guidance and will provide an update during the third quarter amid strong demand trends. Year to date, the stock has skyrocketed 127.5% compared with the industry’s 3.5% growth. Image Source: Zacks Investment Research Gross margin improved to 56% from 41% in the first quarter of 2026, marking a quarterly high. Higher Amtagvi volume, continued cost optimization and efficiencies from fully in-house manufacturing supported the improvement. Research and development expenses declined 24% year over year to $58.9 million. Selling, general and administrative expenses increased 5% to $39.3 million. Iovance ended the second quarter with approximately $304 million in cash and cash equivalents compared with $319 million in the previous quarter. Management expects the current cash position to fund operations into the second half of 2028, compared with its previous expectation of funding operations into 2028. The longer runway comes as Iovance continues to improve manufacturing efficiencies and control operating expenses while advancing its commercial launch and pipeline. Strong second-quarter sales prompted management to review its previously issued 2026 total revenue guidance of $350-$370 million. Iovance plans to provide an updated forecast during the third quarter after assessing current demand trends. Management expects Amtagvi's demand to increase in both the third and fourth quarters. Proleukin sales are also expected to grow alongside Amtagvi, with the product anticipated to represent approximately 16% of total revenues on a steady-state basis during the remainder of the year. Amtagvi recently secured approval in Australia for the melanoma indication. In the U.K., a regulatory filing for the therapy was resubmitted last month and is undergoing expedited review for potential approval before this year’s end. While a potential approval for Amtagvi in Switzerland is expected in the first half of 2027, Iovance is in discussions with the EMA to resubmit a regulatory filing for the therapy next year. Iovance continues to advance its development programs for Amtagvi. It is evaluating the drug in combination with Merck’s MRK Keytruda in the phase III TILVANCE-301 study as a potential treatment for frontline advanced melanoma. This study will serve as a confirmatory study seeking full approval for Amtagvi in the melanoma indication. Beyond melanoma, Iovance is developing Amtagvi for other cancer indications. Alongside the earnings results, the company reported that enrolment is nearly complete in the pivotal cohorts of the phase II IOV-LUN-202 study evaluating the therapy for previously treated metastatic non-squamous non-small cell lung cancer (NSCLC). An update is expected in the fourth quarter of 2026. The company intends to submit a regulatory filing seeking label expansion in 2027. Amtagvi is being evaluated in separate mid-stage studies for endometrial cancer and soft tissue sarcomas. Iovance currently carries a Zacks Rank #2 (Buy). Iovance Biotherapeutics, Inc. price | Iovance Biotherapeutics, Inc. Quote Some other top-ranked stocks in the biotech sector are Harmony Biosciences HRMY and Liquidia Corporation LQDA, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Over the past 60 days, earnings per share (EPS) estimates for Harmony Biosciences have risen from $3.20 to $3.33 for 2026. Over the same period, EPS estimates have increased from $3.64 to $3.87 for 2027. HRMY shares have risen about 4% year to date. Harmony Biosciences missed earnings in three of the trailing four quarters while meeting on one occasion, delivering an average negative surprise of 13.97%. Over the past 60 days, estimates for Liquidia’s 2026 EPS have increased to $3.02 from $2.97. Over the same period, EPS estimates for 2027 have risen from $4.81 to $5.31. LQDA shares have skyrocketed 159% so far this year. Liquidia’s earnings beat estimates in three of the trailing four quarters and missed on one occasion, with the average surprise being 54.40%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Iovance Biotherapeutics, Inc. (IOVA) : Free Stock Analysis Report Merck & Co., Inc. (MRK) : Free Stock Analysis Report Liquidia Corporation (LQDA) : Free Stock Analysis Report Harmony Biosciences Holdings, Inc. (HRMY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Merck KGaA? Here are five stocks we like better. Merck KGaA reported strong Q2 growth, with organic sales up 4.1% and EBITDA pre rising 9.3% organically to €1.6 billion. Life Science and Electronics led performance, driven by Process Solutions and advanced semiconductor demand. The company raised its 2026 outlook for organic sales growth to 1%–3%, EBITDA pre to €5.9–€6.3 billion and EPS pre to €7.90–€8.60. Electronics guidance was upgraded notably, while Healthcare still expects an organic sales decline due to U.S. competition and Mavenclad exclusivity loss. Merck remains on track to acquire Bio-Techne by the end of 2026 or early 2027, expecting about €140 million in annual cost synergies by the third year after closing, though management emphasized the need to maintain cash generation and reduce debt. Merck KGaA (ETR:MRK) reported accelerating organic sales and earnings growth in the second quarter of 2026, led by Life Science and Electronics, and raised its full-year outlook for sales, EBITDA pre and earnings per share. Group net sales rose 3.4% year over year to €5.434 billion. Organic sales grew 4.1%, while currency effects reduced sales by 1.1% and portfolio effects added 0.4%. EBITDA pre increased 9.4% on a reported basis to €1.6 billion, with organic growth of 9.3%. The EBITDA pre margin expanded by 1.6 percentage points to 29.4%. → 3 Drone Stocks That Should Soar After the Summer Slump “Q2 was a pretty robust quarter,” Group Chief Executive Officer Kai Beckmann said, citing growth momentum in Life Science and Electronics as well as continued contributions from rare-disease products in Healthcare. Life Science organic sales increased 8% in the quarter, with Process Solutions growing 15%. Chief Financial Officer Helene von Roeder said the business continued to benefit from healthy underlying demand, stronger purchasing activity in Asia-Pacific and new customer projects, although the temporary uplift began normalizing during the quarter. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Advanced Solutions grew 4% organically as the research-spending environment improved gradually, while Discovery Solutions increased 2% despite continued market softness, including in China. Life Science EBITDA pre rose to €700 million, and the margin increased 50 basis points to 29%. Jean-Charles Wirth, CEO of Life Science, said Process Solutions’ full-year growth is expected to land in the upper end of the company’s previously cited 8% to 12% range. Its first-half book-to-bill ratio was above one, he said. → Jersey Mike's Serves Fresh Gains After IPO Stumble Wirth said the company does not expect inventory destocking to affect Process Solutions in 2026, though any such effect could occur in 2027. He added that roughly 75% to 80% of orders had lead times of one to six months at the end of June, consistent with pre-pandemic order patterns. Merck also said it remains on track to acquire Bio-Techne, subject to regulatory approvals and closing, which is expected by the end of 2026 or early 2027. The company expects the acquisition to be immediately accretive to sales growth and EBITDA pre margin after closing. It estimates annual run-rate cost synergies of about €140 million by the third year after closing and expects group EPS pre accretion in that year. Healthcare reported sales rose 2.4% to €2.2 billion, but organic sales declined 3.4%. Positive portfolio effects from the rare-disease portfolio added 5.4% to reported sales. Rare-disease products Auxilium and GOMEKLI generated combined first-half sales of €207 million, in line with company guidance. Merck also recorded initial sales of pimicotinib following its private-market launch in China. Specialty Care sales declined 6% organically, primarily due to Mavenclad’s loss of market exclusivity in the U.S. and competition for BAVENCIO. Erbitux sales increased 5% organically. Cardiometabolic sales rose 1% organically, while Fertility & Endocrinology was broadly stable. Healthcare EBITDA pre was €747 million, representing a 34.7% margin. Von Roeder said favorable product mix and cost management partly offset higher research and development spending and launch investments for rare-disease products. In the pipeline, Merck dosed the first patient in a phase III trial of Precem-TcT, an anti-CEACAM5 antibody-drug conjugate for third-line metastatic colorectal cancer. The FDA also granted breakthrough therapy designation to enpatoran for lupus with active cutaneous manifestations. The FDA accepted Merck’s biologics license application for Pergoveris, but Healthcare CEO Danny Bar-Zohar said uncertainty remains over potential approval because the submission relies substantially on legacy data generated outside the U.S. Merck’s 2026 guidance does not include a potential U.S. Pergoveris launch. Electronics organic sales growth accelerated to 11.7%, while reported sales totaled €871 million, reflecting the divestment of Surface Solutions. Semiconductor Solutions grew 17% organically, supported by demand for semiconductor materials used in advanced logic and memory nodes. Ben Hein, CEO of Electronics, said AI-related applications and data-center buildouts continued to drive demand, while consumer-electronics markets remained softer. He said the company expects shortages of advanced memory chips and elevated prices to persist at least through the second half of 2027. Delivery Systems & Services also contributed to quarterly growth following the completion of a large project, although Hein cautioned that the contribution is unlikely to recur. Optronics was broadly stable but faces increasing pressure from consumer-electronics demand in the second half. Electronics EBITDA pre rose to €244 million and the margin reached 28%, up about 200 basis points sequentially from the underlying first-quarter margin. Management cited stronger volumes, the Surface Solutions divestment, cost management and a favorable mix from AI-driven applications. Merck raised its 2026 guidance, now expecting group organic net sales growth of 1% to 3%, compared with its prior range of 0% to 3%. It expects reported group sales of approximately €21 billion to €21.8 billion, benefiting from less severe expected foreign-exchange headwinds. Group EBITDA pre is now expected at €5.9 billion to €6.3 billion, up from prior guidance of €5.7 billion to €6.1 billion. EPS pre is projected at €7.90 to €8.60, compared with €7.50 to €8.20 previously. Life Science organic sales growth is expected at 5% to 7%, including an estimated €40 million potential headwind from tariff refunds to customers. Healthcare organic sales are expected to decline 4% to 2%, with Merck assuming zero U.S. Mavenclad sales from August. Electronics organic sales growth is expected at 6% to 9%, compared with previous guidance of 3% to 7%. Operating cash flow increased 6.7% to €605 million. Net financial debt stood at €9.2 billion at June 30, primarily reflecting the dividend payment. Von Roeder said the company’s cash-generation focus will remain important as it seeks to deleverage following the planned Bio-Techne acquisition. Merck KGaA operates as a science and technology company in Germany. It operates through Life Science, Healthcare, and Electronics segments. The company's Life Science segment offers tools, chemicals, and equipment for academic labs, biotech, and pharmaceutical manufacturers, as well as industrial sector. This segment provides drug manufacturers with process development expertise and technologies, such as continuous bioprocessing; testing kits and services; reagents and services; testing solutions that analyze air, water, and soil; and testing and tools, as well as products that help test nutritional value and identify quality inconsistencies. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Merck KGaA Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.