MRK · 10-Q · 2026Q3 · Full report
Research and Development Expense
Merck & Co., Inc. · 2026-11-04 · Importance 48 · Surprise 42 · No source text
Merck recorded a $5.7 billion research and development expense charge for the Terns asset acquisition in the first nine months of 2026, primarily for acquired in-process research and development with no alternative future use. The Terns charge equaled $2.31 per share, while the Cidara acquisition generated a separate $9.0 billion R&D charge, or $3.62 per share, in the same period. Merck also recorded a $400 million R&D charge for the SciBrunch upfront license payment in the third quarter and first nine months of 2026, or $0.12 per share. The SciBrunch payment is expected to be paid in the fourth quarter of 2026.
Key facts
- Merck recorded a $5.7 billion R&D charge, or $2.31 per share, in the first nine months of 2026 for the Terns acquisition, primarily acquired IPR&D with no alternative future use. source
- Merck recorded a $9.0 billion R&D charge, or $3.62 per share, in the first nine months of 2026 for the Cidara acquisition, primarily acquired IPR&D with no alternative future use. source
- Merck recorded a $5.7 billion charge for the acquisition of Terns in the first nine months of 2026. source
- Merck recorded a $9.0 billion charge for the acquisition of Cidara in the first nine months of 2026. source
- R&D expenses were $26.9 billion in the first nine months of 2026 versus $11.9 billion in the first nine months of 2025, primarily due to higher business-development charges, increased clinical development spending, and unfavorable foreign exchange. source
- R&D costs directly incurred by Merck Research Laboratories were $2.9 billion in Q3 2026 and $8.2 billion in the first nine months of 2026, inclusive of Blackstone funding-agreement benefits of $200 million and $600 million, respectively. source
- Merck recorded a $400 million R&D charge in the third quarter and first nine months of 2026 for the MK-2690 upfront payment, or $0.12 per share; the payment is expected in the fourth quarter of 2026. source
- Q3 2026 R&D expenses were $4.5 billion, up 7% year over year, driven primarily by increased clinical development spending and higher business-development charges; a $200 million Blackstone funding-agreement reduction partly offset the increase. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -82.9% | R&D expenses were $26.9 billion in the first nine months of 2026 versus $11.9 billion in the first nine months of 2025, primarily due to… |
| operating_income | negative | realized | -49.8% | Merck recorded a $5.7 billion charge for the acquisition of Terns in the first nine months of 2026. |
| operating_income | negative | realized | -31.5% | Merck recorded a $5.7 billion R&D charge, or $2.31 per share, in the first nine months of 2026 for the Terns acquisition, primarily… |
| operating_income | positive | realized | +3.3% | R&D costs directly incurred by Merck Research Laboratories were $2.9 billion in Q3 2026 and $8.2 billion in the first nine months of 2026,… |
| operating_income | negative | realized | -2.2% | Merck recorded a $400 million R&D charge in the third quarter and first nine months of 2026 for the MK-2690 upfront payment, or $0.12 per… |
| cash | negative | committed | -0.3% | Merck recorded a $400 million R&D charge in the third quarter and first nine months of 2026 for the MK-2690 upfront payment, or $0.12 per… |