Merck & Co., Inc.
Health Care · Pharmaceuticals
Structural read: $MRK is a single-asset story trading on Keytruda concentration risk vs. pipeline-replacement credibility into the 2028 LOE. Keytruda is ~45-50% of pharma revenue at a >$25B/yr run-rate, and the subcutaneous reformulation (Keytruda Qlex) is the primary lifecycle-extension lever - early uptake and payer coverage are the gating variables for how much revenue carries past the IV biosimilar cliff.
Animal Health and Vaccines (Gardasil, Pneumovax) provide a $15B+ non-oncology base. The bull/bear gap is wide because the post-2028 pipeline (Winrevair PAH, oral PCSK9, ADC platform via Daiichi Sankyo collab, cardiometabolic) has to compound through M&A and clinical readouts to fill the hole.
- Keytruda subcutaneous launches 2025-2026; if payer mix converts >50%, a material share of $25B+ franchise extends past 2028 IV LOE
- Winrevair (acquired via Acceleron) ramping in PAH, consensus modeling $5B+ peak
- Daiichi Sankyo ADC collaboration (patritumab, ifinatamab, raludotatug) adds 3 late-stage oncology shots on goal
- Animal Health + Vaccines provide >$15B durable non-oncology revenue base, low LOE exposure
- Keytruda US LOE 2028, EU 2030 - biosimilars compress 50-70% of franchise value within 24 months absent SC conversion
- Gardasil China inventory destocking persistent through 2025-2026, key growth engine stalled
- Pipeline depth below Keytruda is thin vs $LLY, $NVO, $JNJ; M&A premium required to fill the gap
- China policy + IRA Medicare negotiation cycle adds 2027-2030 pricing headwind on top of LOE
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