MRK · 10-Q · 2026Q3 · Full report

Operating Expense Trends

Merck & Co., Inc. · 2026-11-04 · Importance 29 · Surprise 22

SG&A expense increased 10% to $2.886 billion in the third quarter of 2026 and 8% to $8.491 billion in the first nine months, compared with the respective 2025 periods. Higher administrative costs and promotional spending to support product launches drove the increases; unfavorable foreign exchange also contributed year to date. R&D expense was $4.537 billion in the quarter, up 7%, and $26.871 billion year to date, versus $11.903 billion in 2025. Year-to-date R&D growth primarily reflected business-development charges, including $9.0 billion for Cidara and $5.7 billion for Terns, and increased clinical development spending; the Blackstone funding agreement reduced expense by $600 million year to date.

Key facts

• Merck pays a 7.25% royalty on Vaxneuvance sales through 2026; the rate declines to 2.5% for 2027 through 2035. source
• Merck pays BMS a 22% royalty on Winrevair net sales. source
• The 2.5% royalty on worldwide Keytruda sales, also applicable to Keytruda Qlex, continues through 2026 and terminates thereafter. source
• A separate 2% royalty on worldwide Keytruda sales (and Keytruda Qlex following approval) expired in the U.S. in 2024 and major European markets in the second half of 2025, but continues in certain other international markets through various dates to 2035. source
• Merck may be subject to additional Keytruda Qlex royalties in the future under certain circumstances. source
• Merck pays a 7.25% royalty on Capvaxive sales through 2026; the rate declines to 2.5% for 2027 through 2035. source
• SG&A expenses increased 10% in Q3 2026 and 8% in the first nine months of 2026, primarily due to higher administrative and product-launch promotional costs. source