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Will the FDA's Nod for Subcutaneous Keytruda Ease Merck's Headwinds?
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Key Takeaways
Merck won FDA approval for a subcutaneous version of Keytruda, covering most solid tumor uses.
The SC form takes as little as one minute to administer, versus at least 30 minutes for IV.
Approval arrives as Keytruda faces 2028 patent expiry, with SC patents extending protection.
Merck (MRK - Free Report) announced that the FDA has approved the subcutaneous (under the skin or SC) formulation of its blockbuster PD-L1 inhibitor, Keytruda (pembrolizumab). This version, which will be marketed as Keytruda Qlex, is approved across most solid tumor indications for which the drug’s intravenous (into the vein or IV) version is already approved. A commercial launch for the SC version of the drug is expected later this month.
A major advantage offered by Keytruda Qlex over the IV formulation is improved patient convenience. Delivering a drug SC instead of IV can significantly reduce administration time. Per Merck, the SC version can be administered to patients in as little as one minute compared with the IV formulation, which takes at least 30 minutes. This also likely eases the burden on healthcare facilities, making treatment more accessible and potentially boosting adoption rates.
The FDA’s approval is supported by data from pivotal studies, which showed that treatment with Keytruda Qlex was at least as effective as the IV version. A regulatory filing for the SC version of the drug, also supported by the same data, is under review in Europe. In a separate press release, Merck recently announced that the EMA’s Committee for Medicinal Products for Human Use has recommended approving this filing.
This approval comes at a significant time, as Merck faces the looming threat of losing exclusivity for Keytruda IV in 2028. While sales of the IV version are expected to remain strong until then, the company is heavily reliant on the drug for growth. Keytruda IV is a key revenue driver for the company, now accounting for over 48% of its topline. Merck generated over $15 billion from the drug during the first half of 2025, up 8% year over year, driven by continued strong momentum in metastatic indications and rapid uptake across earlier-stage launches.
With Keytruda IV set to lose exclusivity in 2028, the newly approved SC version comes with its own set of patents that extend protection well beyond that date. This not only delays the threat of generic erosion but also provides Merck with a clear pathway to manage Keytruda’s lifecycle. By encouraging physicians and patients to shift from IV to the SC option, the company can preserve a meaningful share of Keytruda revenues even as the original IV patents expire.
Merck is also facing a significant challenge with the declining sales of its second-largest product, Gardasil, a vaccine for the prevention of certain cancers caused by human papillomavirus. Sales of this product have declined 48% year over year due to weak performance in China, resulting from sluggish demand amid an economic slowdown. This downtrend is expected to continue for the remainder of this year.
MRK Eyes Keytruda's Long-Term Growth Amid Upcoming Patent Loss
Keytruda Qlex is one of the many strategies Merck is deploying to drive its long-term growth amid the upcoming LOE for Keytruda IV. The company is advancing innovative immuno-oncology combinations, such as pairing Keytruda with LAG3 and CTLA-4 inhibitors.
In partnership with Moderna (MRNA - Free Report) , Merck is developing a personalized mRNA therapeutic cancer vaccine (intismeran autogene) in combination with Keytruda for patients with certain types of melanoma and non-small cell lung cancer (NSCLC). Merck and Moderna are conducting pivotal phase III studies on intismeran, in combination with Keytruda, for earlier-stage and adjuvant NSCLC and adjuvant melanoma.
Also, competitive pressure might increase for Keytruda from dual PD-1/VEGF inhibitors like Summit Therapeutics’ (SMMT - Free Report) ivonescimab, which inhibits both the PD-1 pathway and the VEGF pathway at once. This therapy is designed to overcome the limitations of single-target therapies like Keytruda. In a phase III study (conducted in China by Summit’s partner Akeso) in patients with locally advanced or metastatic NSCLC, ivonescimab outperformed Keytruda. Summit believes ivonescimab has the potential to replace Keytruda as the next standard of care across multiple NSCLC settings.
To counter the threat from SMMT, Merck signed a deal last year with China-based LaNova Medicines, in-licensing rights to the latter’s LM-299, which is also based on the same mechanism as ivonescimab.
MRK’s Price Performance, Valuation and Estimates
Shares of Merck have underperformed the industry year to date, as seen in the chart below.
Image Source: Zacks Investment Research
From a valuation standpoint, Merck appears attractive relative to the industry. Going by the price/earnings (P/E) ratio, the company’s shares currently trade at 8.67 forward earnings, lower than 14.88 for the industry as well as its 5-year mean of 12.70.
Image Source: Zacks Investment Research
Movements in EPS estimates for 2025 and 2026 have been mixed in the past 60 days.
Image: Bigstock
Will the FDA's Nod for Subcutaneous Keytruda Ease Merck's Headwinds?
Key Takeaways
Merck (MRK - Free Report) announced that the FDA has approved the subcutaneous (under the skin or SC) formulation of its blockbuster PD-L1 inhibitor, Keytruda (pembrolizumab). This version, which will be marketed as Keytruda Qlex, is approved across most solid tumor indications for which the drug’s intravenous (into the vein or IV) version is already approved. A commercial launch for the SC version of the drug is expected later this month.
A major advantage offered by Keytruda Qlex over the IV formulation is improved patient convenience. Delivering a drug SC instead of IV can significantly reduce administration time. Per Merck, the SC version can be administered to patients in as little as one minute compared with the IV formulation, which takes at least 30 minutes. This also likely eases the burden on healthcare facilities, making treatment more accessible and potentially boosting adoption rates.
The FDA’s approval is supported by data from pivotal studies, which showed that treatment with Keytruda Qlex was at least as effective as the IV version. A regulatory filing for the SC version of the drug, also supported by the same data, is under review in Europe. In a separate press release, Merck recently announced that the EMA’s Committee for Medicinal Products for Human Use has recommended approving this filing.
This approval comes at a significant time, as Merck faces the looming threat of losing exclusivity for Keytruda IV in 2028. While sales of the IV version are expected to remain strong until then, the company is heavily reliant on the drug for growth. Keytruda IV is a key revenue driver for the company, now accounting for over 48% of its topline. Merck generated over $15 billion from the drug during the first half of 2025, up 8% year over year, driven by continued strong momentum in metastatic indications and rapid uptake across earlier-stage launches.
With Keytruda IV set to lose exclusivity in 2028, the newly approved SC version comes with its own set of patents that extend protection well beyond that date. This not only delays the threat of generic erosion but also provides Merck with a clear pathway to manage Keytruda’s lifecycle. By encouraging physicians and patients to shift from IV to the SC option, the company can preserve a meaningful share of Keytruda revenues even as the original IV patents expire.
Merck is also facing a significant challenge with the declining sales of its second-largest product, Gardasil, a vaccine for the prevention of certain cancers caused by human papillomavirus. Sales of this product have declined 48% year over year due to weak performance in China, resulting from sluggish demand amid an economic slowdown. This downtrend is expected to continue for the remainder of this year.
MRK Eyes Keytruda's Long-Term Growth Amid Upcoming Patent Loss
Keytruda Qlex is one of the many strategies Merck is deploying to drive its long-term growth amid the upcoming LOE for Keytruda IV. The company is advancing innovative immuno-oncology combinations, such as pairing Keytruda with LAG3 and CTLA-4 inhibitors.
In partnership with Moderna (MRNA - Free Report) , Merck is developing a personalized mRNA therapeutic cancer vaccine (intismeran autogene) in combination with Keytruda for patients with certain types of melanoma and non-small cell lung cancer (NSCLC). Merck and Moderna are conducting pivotal phase III studies on intismeran, in combination with Keytruda, for earlier-stage and adjuvant NSCLC and adjuvant melanoma.
Also, competitive pressure might increase for Keytruda from dual PD-1/VEGF inhibitors like Summit Therapeutics’ (SMMT - Free Report) ivonescimab, which inhibits both the PD-1 pathway and the VEGF pathway at once. This therapy is designed to overcome the limitations of single-target therapies like Keytruda. In a phase III study (conducted in China by Summit’s partner Akeso) in patients with locally advanced or metastatic NSCLC, ivonescimab outperformed Keytruda. Summit believes ivonescimab has the potential to replace Keytruda as the next standard of care across multiple NSCLC settings.
To counter the threat from SMMT, Merck signed a deal last year with China-based LaNova Medicines, in-licensing rights to the latter’s LM-299, which is also based on the same mechanism as ivonescimab.
MRK’s Price Performance, Valuation and Estimates
Shares of Merck have underperformed the industry year to date, as seen in the chart below.
Image Source: Zacks Investment Research
From a valuation standpoint, Merck appears attractive relative to the industry. Going by the price/earnings (P/E) ratio, the company’s shares currently trade at 8.67 forward earnings, lower than 14.88 for the industry as well as its 5-year mean of 12.70.
Image Source: Zacks Investment Research
Movements in EPS estimates for 2025 and 2026 have been mixed in the past 60 days.
Image Source: Zacks Investment Research
Merck currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.