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MRK vs. BMY: Which Pharma Stock Is the Smarter Pick Now?
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Key Takeaways
MRK's Keytruda remains a growth engine, supported by label expansions and new subcutaneous approval.
BMY leans on Opdivo, Reblozyl, Camzyos and Breyanzi to offset steep legacy drug revenue declines.
MRK trades at 8.24X forward earnings versus BMY's 7.02X, with both lagging large-cap pharma peers.
Merck & Co. (MRK - Free Report) and Bristol Myers Squibb (BMY - Free Report) are leading drugmakers with broad and diverse portfolios and a global footprint.
Merck is a pharmaceutical conglomerate with a strong oncology franchise, as well as a presence in infectious diseases and a solid vaccine portfolio.
On the other hand, Bristol Myers is focused on discovering, developing and delivering transformational drugs for oncology, hematology, immunology, cardiovascular, neuroscience and other diseases.
Both of these pharmaceutical and biotech giants have strong footholds in the oncology space and boast promising pipelines as well. In such a scenario, choosing one stock over the other can be tricky. Let us delve into their fundamentals, potential growth prospects, challenges and valuation levels to make a prudent choice.
The Case for MRK
Merck boasts more than six blockbuster drugs in its portfolio. Among these, immuno-oncology drug Keytruda accounts for the lion’s share of its business. The drug has played a pivotal role in driving top-line revenue growth over the past few years.
Growth engine Keytruda is approved for various oncology indications either as a monotherapy or in combination with other drugs. Sales are benefiting from the rapid uptake across earlier-stage indications, primarily early-stage non-small cell lung cancer. Continued strong momentum in metastatic indications is also boosting sales growth. Keytruda’s sales rose around 7% in the first half of 2025.
Per MRK, there are currently more than 1,600 trials studying Keytruda across a wide variety of cancers and treatment settings.
The FDA recently approved Keytruda Qlex (pembrolizumab and berahyaluronidase alfa-pmph injection) for subcutaneous administration in adults across most solid tumor indications for Keytruda.
Meanwhile, Merck’s Animal Health business is a key contributor to its top-line growth, as the company is recording above-market growth from this franchise.
Merck is also making efforts to strengthen its vaccines portfolio in the wake of declining Gardasil sales. Merck’s new 21-valent pneumococcal conjugate vaccine, Capvaxive, holds potential.
The company has been striving to drive both organic and inorganic growth through mergers and acquisitions (M&A). Consequently, MRK’s phase III pipeline has almost tripled since 2021. This has positioned Merck to launch around 20 new vaccines and drugs over the next few years, with many having blockbuster potential. Pulmonary arterial hypertension drug, Winrevair, witnessed a strong launch and should drive significant growth in the long term.
The company is also looking to boost bottom-line growth. In July 2025, Merck announced a new multi-year optimization initiative, which is expected to result in $3 billion in annual cost savings by the end of 2027.
Merck’s growth hinges on Keytruda, which is slated to lose exclusivity in 2028. Merck’s top line will be adversely impacted once Keytruda loses exclusivity.
Declining sales of Gardasil, Merck’s second-largest product, pose another headwind, driven by weak demand in China amid the economic slowdown.The company is also seeing lower demand for the vaccine in Japan. Sales are expected to remain weak in Japan in the second half of 2025.
MRK is also experiencing declining demand for its diabetes products and the erosion of generic competition for some of its drugs.
Merck exited the second quarter with cash and cash equivalents of $8.6 billion, against total debt (short as well as long-term) of $35.4 billion, resulting in a debt-to-capital ratio of 0.41, which is slightly lower than the industry's average of 0.42.
The Case for BMY
BMY’s Growth Portfolio, comprising drugs like Opdivo, Reblozyl, Breyanzi, Camzyos and Opdualag, has stabilized its revenue base amid generic competition for its legacy drugs.
The company’s strong oncology portfolio comprises blockbuster immuno-oncology drug Opdivo, Opdivo Qvantig, and Yervoy, among others.
Opdivo is approved for various oncology indications around the world, either as monotherapy or in combination with other drugs. Consistent label expansion of the drug has enabled it to maintain momentum.
Opdivo sales in the United States are being driven by a strong launch in MSI-high colorectal cancer and continued growth in first-line non-small cell lung cancer, while sales outside the country are being bolstered by volume growth.
The FDA had earlier granted approval to Opdivo Qvantig (nivolumab and hyaluronidase-nvhy) injection for subcutaneous use. The initial uptake has been strong, and the launch is going well in the United States across all indicated tumor types.
The company now expects global Opdivo sales, together with Qvantig, to grow in the mid-to-high single-digit range in 2025, driven by strong performance in the first half.
The recent collaboration agreement with BioNTech has strengthened BMY’s pipeline. Both companies have entered into an agreement for the global co-development and co-commercialization of BioNTech’s investigational bispecific antibody BNT327 across numerous solid tumor types.
Meanwhile, other key drugs in BMY’s portfolio include the thalassemia drug Reblozyl, among others. Reblozyl has delivered a stellar performance since its approval, and is expected to make a significant contribution in the coming decade. Strong momentum in cardiovascular drug Camzyos should further drive growth. Breyanzi sales have been strong as well.
While the newer drugs boost sales, generic competition for legacy drugs, which account for the majority of total revenues, is a significant headwind. Legacy Portfolio sales continue to decline due to the ongoing generic impact on Revlimid, Pomalyst, Sprycel, and Abraxane, as well as the effect of the U.S. Medicare Part D redesign.
Like Merck, BMY has also undertaken a restructuring program to streamline its operating model in key areas, including R&D, manufacturing, commercial, and other functions. In 2025, BMY expanded the scope of activities supporting these key priorities.
The company expects to achieve annual cost savings of approximately $2.0 billion by the end of 2027, following the implementation of this restructuring program.
However, Bristol Myers’ total debt-to-total capital ratio was a whopping 73.8% as of June 30, 2025.
How Do Estimates Compare for MRK & BMY?
The Zacks Consensus Estimate for MRK’s 2025 sales implies a year-over-year increase of 1.21%, and that for earnings per share (EPS) suggests an improvement of 16.73%. However, while EPS estimates for 2025 have moved north in the past 60 days, those for 2026 have moved south.
MRK’s Estimate Movement
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BMY’s 2025 sales implies a year-over-year decrease of 2.06%, while that for EPS suggests an increase of 465.22%. The extraordinary EPS growth rate is attributed to an extremely low EPS figure in 2024 due to acquisition expenses.
EPS estimates for both 2025 and 2026 have moved north in the past 60 days.
BMY’s Estimate Movement
Image Source: Zacks Investment Research
Price Performance and Valuation of MRK and BMY
From a price-performance perspective, both these companies have underperformed the large cap pharma industry year to date. Shares of MRK and BMY have lost 19.7% and 20.5%, respectively. The industry has gained 1.6% in the said period.
Image Source: Zacks Investment Research
From a valuation standpoint, we use the P/E ratio of the large-cap pharma industry to compare these companies. Going by the same, MRK is slightly more expensive than BMY. MRK’s shares currently trade at 8.24X forward earnings, higher than 7.02X for BMY. The large-cap pharma industry currently trades at 14.67X forward earnings.
Image Source: Zacks Investment Research
Both MRK and BMY have an attractive dividend yield. This is a strong positive for investors. However, BMY's dividend yield of 5.61% is higher than MRK’s 4%.
Which Stock Is a Better Pick for Now?
Large pharma/biotech companies are generally considered safe havens for investors interested in this sector.
MRK has a strong and diverse portfolio. Strong Keytruda sales and additional label expansions of the drug should maintain momentum for the company. Merck has been making meaningful pipeline progress across areas like oncology, vaccines and infectious diseases. However, declining Gardasil sales and heavy dependence on Keytruda are headwinds.
BMY’s efforts to revive the top line in the face of generic challenges for key drugs are commendable. Approval of new drugs and label expansion of key drugs should generate incremental revenues for the company. However, we believe there is still time before the efforts reap a harvest for BMY. The outlook for 2025 currently indicates challenges.
While both companies have their positives and negatives, we believe MRK is a better pick at present, primarily due to the diversity and strength of its portfolio.
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MRK vs. BMY: Which Pharma Stock Is the Smarter Pick Now?
Key Takeaways
Merck & Co. (MRK - Free Report) and Bristol Myers Squibb (BMY - Free Report) are leading drugmakers with broad and diverse portfolios and a global footprint.
Merck is a pharmaceutical conglomerate with a strong oncology franchise, as well as a presence in infectious diseases and a solid vaccine portfolio.
On the other hand, Bristol Myers is focused on discovering, developing and delivering transformational drugs for oncology, hematology, immunology, cardiovascular, neuroscience and other diseases.
Both of these pharmaceutical and biotech giants have strong footholds in the oncology space and boast promising pipelines as well. In such a scenario, choosing one stock over the other can be tricky. Let us delve into their fundamentals, potential growth prospects, challenges and valuation levels to make a prudent choice.
The Case for MRK
Merck boasts more than six blockbuster drugs in its portfolio. Among these, immuno-oncology drug Keytruda accounts for the lion’s share of its business. The drug has played a pivotal role in driving top-line revenue growth over the past few years.
Growth engine Keytruda is approved for various oncology indications either as a monotherapy or in combination with other drugs. Sales are benefiting from the rapid uptake across earlier-stage indications, primarily early-stage non-small cell lung cancer. Continued strong momentum in metastatic indications is also boosting sales growth. Keytruda’s sales rose around 7% in the first half of 2025.
Per MRK, there are currently more than 1,600 trials studying Keytruda across a wide variety of cancers and treatment settings.
The FDA recently approved Keytruda Qlex (pembrolizumab and berahyaluronidase alfa-pmph injection) for subcutaneous administration in adults across most solid tumor indications for Keytruda.
Meanwhile, Merck’s Animal Health business is a key contributor to its top-line growth, as the company is recording above-market growth from this franchise.
Merck is also making efforts to strengthen its vaccines portfolio in the wake of declining Gardasil sales. Merck’s new 21-valent pneumococcal conjugate vaccine, Capvaxive, holds potential.
The company has been striving to drive both organic and inorganic growth through mergers and acquisitions (M&A). Consequently, MRK’s phase III pipeline has almost tripled since 2021. This has positioned Merck to launch around 20 new vaccines and drugs over the next few years, with many having blockbuster potential. Pulmonary arterial hypertension drug, Winrevair, witnessed a strong launch and should drive significant growth in the long term.
The company is also looking to boost bottom-line growth. In July 2025, Merck announced a new multi-year optimization initiative, which is expected to result in $3 billion in annual cost savings by the end of 2027.
Merck’s growth hinges on Keytruda, which is slated to lose exclusivity in 2028. Merck’s top line will be adversely impacted once Keytruda loses exclusivity.
Declining sales of Gardasil, Merck’s second-largest product, pose another headwind, driven by weak demand in China amid the economic slowdown.The company is also seeing lower demand for the vaccine in Japan. Sales are expected to remain weak in Japan in the second half of 2025.
MRK is also experiencing declining demand for its diabetes products and the erosion of generic competition for some of its drugs.
Merck exited the second quarter with cash and cash equivalents of $8.6 billion, against total debt (short as well as long-term) of $35.4 billion, resulting in a debt-to-capital ratio of 0.41, which is slightly lower than the industry's average of 0.42.
The Case for BMY
BMY’s Growth Portfolio, comprising drugs like Opdivo, Reblozyl, Breyanzi, Camzyos and Opdualag, has stabilized its revenue base amid generic competition for its legacy drugs.
The company’s strong oncology portfolio comprises blockbuster immuno-oncology drug Opdivo, Opdivo Qvantig, and Yervoy, among others.
Opdivo is approved for various oncology indications around the world, either as monotherapy or in combination with other drugs. Consistent label expansion of the drug has enabled it to maintain momentum.
Opdivo sales in the United States are being driven by a strong launch in MSI-high colorectal cancer and continued growth in first-line non-small cell lung cancer, while sales outside the country are being bolstered by volume growth.
The FDA had earlier granted approval to Opdivo Qvantig (nivolumab and hyaluronidase-nvhy) injection for subcutaneous use. The initial uptake has been strong, and the launch is going well in the United States across all indicated tumor types.
The company now expects global Opdivo sales, together with Qvantig, to grow in the mid-to-high single-digit range in 2025, driven by strong performance in the first half.
The recent collaboration agreement with BioNTech has strengthened BMY’s pipeline. Both companies have entered into an agreement for the global co-development and co-commercialization of BioNTech’s investigational bispecific antibody BNT327 across numerous solid tumor types.
Meanwhile, other key drugs in BMY’s portfolio include the thalassemia drug Reblozyl, among others. Reblozyl has delivered a stellar performance since its approval, and is expected to make a significant contribution in the coming decade. Strong momentum in cardiovascular drug Camzyos should further drive growth. Breyanzi sales have been strong as well.
While the newer drugs boost sales, generic competition for legacy drugs, which account for the majority of total revenues, is a significant headwind. Legacy Portfolio sales continue to decline due to the ongoing generic impact on Revlimid, Pomalyst, Sprycel, and Abraxane, as well as the effect of the U.S. Medicare Part D redesign.
Like Merck, BMY has also undertaken a restructuring program to streamline its operating model in key areas, including R&D, manufacturing, commercial, and other functions. In 2025, BMY expanded the scope of activities supporting these key priorities.
The company expects to achieve annual cost savings of approximately $2.0 billion by the end of 2027, following the implementation of this restructuring program.
However, Bristol Myers’ total debt-to-total capital ratio was a whopping 73.8% as of June 30, 2025.
How Do Estimates Compare for MRK & BMY?
The Zacks Consensus Estimate for MRK’s 2025 sales implies a year-over-year increase of 1.21%, and that for earnings per share (EPS) suggests an improvement of 16.73%. However, while EPS estimates for 2025 have moved north in the past 60 days, those for 2026 have moved south.
MRK’s Estimate Movement
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BMY’s 2025 sales implies a year-over-year decrease of 2.06%, while that for EPS suggests an increase of 465.22%. The extraordinary EPS growth rate is attributed to an extremely low EPS figure in 2024 due to acquisition expenses.
EPS estimates for both 2025 and 2026 have moved north in the past 60 days.
BMY’s Estimate Movement
Image Source: Zacks Investment Research
Price Performance and Valuation of MRK and BMY
From a price-performance perspective, both these companies have underperformed the large cap pharma industry year to date. Shares of MRK and BMY have lost 19.7% and 20.5%, respectively. The industry has gained 1.6% in the said period.
Image Source: Zacks Investment Research
From a valuation standpoint, we use the P/E ratio of the large-cap pharma industry to compare these companies. Going by the same, MRK is slightly more expensive than BMY. MRK’s shares currently trade at 8.24X forward earnings, higher than 7.02X for BMY. The large-cap pharma industry currently trades at 14.67X forward earnings.
Image Source: Zacks Investment Research
Both MRK and BMY have an attractive dividend yield. This is a strong positive for investors. However, BMY's dividend yield of 5.61% is higher than MRK’s 4%.
Which Stock Is a Better Pick for Now?
Large pharma/biotech companies are generally considered safe havens for investors interested in this sector.
However, with both MRK and BMY stocks currently carrying a Zacks Rank #3 (Hold), choosing one over the other is a complex task. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MRK has a strong and diverse portfolio. Strong Keytruda sales and additional label expansions of the drug should maintain momentum for the company. Merck has been making meaningful pipeline progress across areas like oncology, vaccines and infectious diseases. However, declining Gardasil sales and heavy dependence on Keytruda are headwinds.
BMY’s efforts to revive the top line in the face of generic challenges for key drugs are commendable. Approval of new drugs and label expansion of key drugs should generate incremental revenues for the company. However, we believe there is still time before the efforts reap a harvest for BMY. The outlook for 2025 currently indicates challenges.
While both companies have their positives and negatives, we believe MRK is a better pick at present, primarily due to the diversity and strength of its portfolio.