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MRK's Keytruda anchors oncology strength, with new studies, combinations, and subcutaneous formulation.
Exelixis, Inc. ((EXEL - Free Report) ) is an oncology-focused biotechnology company that primarily focuses on the discovery, development and commercialization of new drugs for the treatment of difficult-to-treat cancers.
Pharma giant Merck ((MRK - Free Report) ) has a strong and diverse portfolio with a strong presence in oncology, along with other therapeutic areas like immunology and diabetes, among others. The company also boasts of a robust vaccine franchise.
While MRK is undoubtedly a much bigger pharma company in terms of market capitalization, product portfolio and geographical presence, both companies are formidable players in renal cell carcinoma (RCC) space with Exelixis’ Cabometyx competing fiercely with Merck’s PD-L1 inhibitor, Keytruda.
In such a scenario, the focal point of a face-off between these two players is largely their oncology portfolio strength. Let us delve deeper into each company’s profile to make a prudent choice.
The Case for EXEL
Exelixis’ Cabometyx maintains its status as the leading tyrosine kinase inhibitor (TKI) for the treatment of RCC in both the frontline immuno-oncology (IO) +TKI market and the second-line monotherapy segment.
The drug is also approved for use in combination with Opdivo in the first-line setting in RCC. Demand has been strong for this combination, boosting sales.
While RCC is the key target area, the drug is also approved for previously treated hepatocellular carcinoma, the most common type of primary liver cancer.
EXEL is working to expand Cabometyx’s label beyond RCC. The recent label expansion of cabozantinib for adult and pediatric patients 12 years of age and older with previously treated, unresectable, locally advanced or metastatic, well-differentiated pancreatic NET (pNET) and those with previously treated advanced extra-pancreatic NET should further fuel sales.
Cabometyx is now the first and only systemic treatment that is FDA approved for previously treated NET, regardless of primary tumor site, grade, somatostatin receptor expression and functional status.
In July, Exelixis announced that its partner Ipsen received regulatory approval for Cabometyx for adult patients with unresectable or metastatic, well-differentiated extra-pancreatic and pNET neuroendocrine tumors who have progressed following at least one prior systemic therapy other than somatostatin analogues, in the EU.
EXEL is also developing zanzalintinib— a next-generation oral investigational TKI — which inhibits the activity of receptor tyrosine kinases implicated in cancer growth and spread, including VEGF receptors, MET, AXL and MER.
The company recently announced positive top-line results from the late-stage STELLAR-303 study, which is an open-label study that randomized 901 patients equally to receive either zanzalintinib (100 mg) in combination with Tecentriq (atezolizumab) or Stivarga (regorafenib). The study includes patients with previously non-microsatellite instability-high metastatic colorectal cancer. The positive data from this study represent a pivotal achievement for Exelixis, increasing the likelihood of regulatory success.
The Case for MRK
While MRK has a diversified portfolio, its PD-L1 inhibitor, Keytruda, is approved for several types of cancer and alone accounts for around 50% of its pharmaceutical sales.
Keytruda is an anti-programmed death receptor-1 (PD-1) therapy that works by increasing the ability of the body’s immune system to help detect and fight tumor cells. The drug is already approved for the treatment of many cancers globally, and its sales are gaining from continued strong momentum in metastatic indications and rapid uptake across earlier-stage launches.
MRK’s Keytruda is also approved in combination with Inlyta for the first-line treatment of patients with advanced RCC. On a standalone basis, Keytruda is indicated for the adjuvant treatment of patients with RCC at intermediate-high or high risk of recurrence following nephrectomy, or following nephrectomy and resection of metastatic lesions.
Since early detection of cancer is the key to survival, Merck is studying Keytruda in earlier stages of the disease, with more than 25 ongoing registrational studies across multiple types of cancer.
Keytruda is being studied in phase III studies for hepatocellular, ovarian and small-cell lung cancers, among others.
Merck is working on different strategies to drive the long-term growth of Keytruda. These include innovative immuno-oncology combinations, including Keytruda with LAG3 and CTLA-4 inhibitors.
In partnership with Moderna, Merck is developing a personalized mRNA therapeutic cancer vaccine (V940/mRNA-4157) in combination with Keytruda for patients with certain types of melanoma and NSCLC. The companies are conducting pivotal phase III studies on V940, in combination with Keytruda, for earlier-stage and adjuvant NSCLC and adjuvant melanoma. Merck has developed a subcutaneous formulation of Keytruda that can extend its patent life. It is under review in the United States (target action date: Sep 23, 2025) and the EU.
Other well-known products in Merck’s arsenal include Januvia and Janumet (Diabetes), Bridion and Prevymis (Hospital Acute Care), Isentress (Virology), ProQuad, Gardasil, Pneumovax 23, RotaTeq (Vaccines) and Belsomra (Neuroscience).
Merck’s Animal Health business is also a key contributor to its top-line growth, as Merck is recording above-market growth, and the trend continues in 2025.
A Look at Estimates: EXEL vs MRK
The Zacks Consensus Estimate for EXEL’s 2025 sales implies a year-over-year increase of 7.29%, and that for earnings per share (EPS) suggests an improvement of 35%. While EPS estimates for 2025 have moved north in the past 60 days, that for 2026 has moved south.
EXEL’s Estimate Movement
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MRK’s 2025 sales implies a year-over-year increase of 1.23% while that for EPS suggests an improvement of 16.73%. While EPS estimates for 2025 have remained unchanged in the past 60 days, those for 2026 have moved south.
MRK’s Estimate Movement
Image Source: Zacks Investment Research
Price Performance and Valuation of EXEL and MRK
From a price-performance perspective, EXEL has fetched better returns than MRK so far this year. Shares of EXEL have gained 16.1%, while those of MRK have lost 12.1%. The industry has declined 0.2% in the said period.
Image Source: Zacks Investment Research
From a valuation standpoint, EXEL is more expensive than MRK. EXEL’s shares currently trade at 13.11X forward earnings, higher than 9.34X for MRK.
EXEL has put up a strong performance so far this year on the back of Cabometyx momentum and positive pipeline updates. Approval of zanzalintinib should boost growth prospects.
On the other hand, MRK enjoys a dominant place in the oncology space fueled by Keytruda. Additional label expansions of this blockbuster drug should further boost MRK’s top line. Keytruda will remain a key revenue driver for the company in the second half of 2025, along with the Animal Health business and new product launches like Winrevair and Capvaxive.
According to a competitive landscape analysis, MRK is a better pick at present, primarily due to the diversity and strength of its portfolio which provides a shield against market volatility. MRK’s attractive dividend yield (3.71%) is also a strong positive for investors.
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Exelixis vs. Merck: Which Oncology Stock Is a Better Pick as of Now?
Key Takeaways
Exelixis, Inc. ((EXEL - Free Report) ) is an oncology-focused biotechnology company that primarily focuses on the discovery, development and commercialization of new drugs for the treatment of difficult-to-treat cancers.
Pharma giant Merck ((MRK - Free Report) ) has a strong and diverse portfolio with a strong presence in oncology, along with other therapeutic areas like immunology and diabetes, among others. The company also boasts of a robust vaccine franchise.
While MRK is undoubtedly a much bigger pharma company in terms of market capitalization, product portfolio and geographical presence, both companies are formidable players in renal cell carcinoma (RCC) space with Exelixis’ Cabometyx competing fiercely with Merck’s PD-L1 inhibitor, Keytruda.
In such a scenario, the focal point of a face-off between these two players is largely their oncology portfolio strength. Let us delve deeper into each company’s profile to make a prudent choice.
The Case for EXEL
Exelixis’ Cabometyx maintains its status as the leading tyrosine kinase inhibitor (TKI) for the treatment of RCC in both the frontline immuno-oncology (IO) +TKI market and the second-line monotherapy segment.
The drug is also approved for use in combination with Opdivo in the first-line setting in RCC. Demand has been strong for this combination, boosting sales.
While RCC is the key target area, the drug is also approved for previously treated hepatocellular carcinoma, the most common type of primary liver cancer.
EXEL is working to expand Cabometyx’s label beyond RCC. The recent label expansion of cabozantinib for adult and pediatric patients 12 years of age and older with previously treated, unresectable, locally advanced or metastatic, well-differentiated pancreatic NET (pNET) and those with previously treated advanced extra-pancreatic NET should further fuel sales.
Cabometyx is now the first and only systemic treatment that is FDA approved for previously treated NET, regardless of primary tumor site, grade, somatostatin receptor expression and functional status.
In July, Exelixis announced that its partner Ipsen received regulatory approval for Cabometyx for adult patients with unresectable or metastatic, well-differentiated extra-pancreatic and pNET neuroendocrine tumors who have progressed following at least one prior systemic therapy other than somatostatin analogues, in the EU.
EXEL is also developing zanzalintinib — a next-generation oral investigational TKI — which inhibits the activity of receptor tyrosine kinases implicated in cancer growth and spread, including VEGF receptors, MET, AXL and MER.
The company recently announced positive top-line results from the late-stage STELLAR-303 study, which is an open-label study that randomized 901 patients equally to receive either zanzalintinib (100 mg) in combination with Tecentriq (atezolizumab) or Stivarga (regorafenib). The study includes patients with previously non-microsatellite instability-high metastatic colorectal cancer. The positive data from this study represent a pivotal achievement for Exelixis, increasing the likelihood of regulatory success.
The Case for MRK
While MRK has a diversified portfolio, its PD-L1 inhibitor, Keytruda, is approved for several types of cancer and alone accounts for around 50% of its pharmaceutical sales.
Keytruda is an anti-programmed death receptor-1 (PD-1) therapy that works by increasing the ability of the body’s immune system to help detect and fight tumor cells. The drug is already approved for the treatment of many cancers globally, and its sales are gaining from continued strong momentum in metastatic indications and rapid uptake across earlier-stage launches.
MRK’s Keytruda is also approved in combination with Inlyta for the first-line treatment of patients with advanced RCC. On a standalone basis, Keytruda is indicated for the adjuvant treatment of patients with RCC at intermediate-high or high risk of recurrence following nephrectomy, or following nephrectomy and resection of metastatic lesions.
Since early detection of cancer is the key to survival, Merck is studying Keytruda in earlier stages of the disease, with more than 25 ongoing registrational studies across multiple types of cancer.
Keytruda is being studied in phase III studies for hepatocellular, ovarian and small-cell lung cancers, among others.
Merck is working on different strategies to drive the long-term growth of Keytruda. These include innovative immuno-oncology combinations, including Keytruda with LAG3 and CTLA-4 inhibitors.
In partnership with Moderna, Merck is developing a personalized mRNA therapeutic cancer vaccine (V940/mRNA-4157) in combination with Keytruda for patients with certain types of melanoma and NSCLC. The companies are conducting pivotal phase III studies on V940, in combination with Keytruda, for earlier-stage and adjuvant NSCLC and adjuvant melanoma. Merck has developed a subcutaneous formulation of Keytruda that can extend its patent life. It is under review in the United States (target action date: Sep 23, 2025) and the EU.
Other well-known products in Merck’s arsenal include Januvia and Janumet (Diabetes), Bridion and Prevymis (Hospital Acute Care), Isentress (Virology), ProQuad, Gardasil, Pneumovax 23, RotaTeq (Vaccines) and Belsomra (Neuroscience).
Merck’s Animal Health business is also a key contributor to its top-line growth, as Merck is recording above-market growth, and the trend continues in 2025.
A Look at Estimates: EXEL vs MRK
The Zacks Consensus Estimate for EXEL’s 2025 sales implies a year-over-year increase of 7.29%, and that for earnings per share (EPS) suggests an improvement of 35%. While EPS estimates for 2025 have moved north in the past 60 days, that for 2026 has moved south.
EXEL’s Estimate Movement
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MRK’s 2025 sales implies a year-over-year increase of 1.23% while that for EPS suggests an improvement of 16.73%. While EPS estimates for 2025 have remained unchanged in the past 60 days, those for 2026 have moved south.
MRK’s Estimate Movement
Image Source: Zacks Investment Research
Price Performance and Valuation of EXEL and MRK
From a price-performance perspective, EXEL has fetched better returns than MRK so far this year. Shares of EXEL have gained 16.1%, while those of MRK have lost 12.1%. The industry has declined 0.2% in the said period.
Image Source: Zacks Investment Research
From a valuation standpoint, EXEL is more expensive than MRK. EXEL’s shares currently trade at 13.11X forward earnings, higher than 9.34X for MRK.
Image Source: Zacks Investment Research
Which Stock Is a Better Pick for Now?
With both EXEL and MRK stocks currently carrying a Zacks Rank #3 (Hold), choosing one over the other could be tricky. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
EXEL has put up a strong performance so far this year on the back of Cabometyx momentum and positive pipeline updates. Approval of zanzalintinib should boost growth prospects.
On the other hand, MRK enjoys a dominant place in the oncology space fueled by Keytruda. Additional label expansions of this blockbuster drug should further boost MRK’s top line. Keytruda will remain a key revenue driver for the company in the second half of 2025, along with the Animal Health business and new product launches like Winrevair and Capvaxive.
According to a competitive landscape analysis, MRK is a better pick at present, primarily due to the diversity and strength of its portfolio which provides a shield against market volatility. MRK’s attractive dividend yield (3.71%) is also a strong positive for investors.