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Will Keytruda Continue to Aid Merck's Top Line in Q3 Earnings?
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Key Takeaways
Keytruda generated over half of Merck's pharma sales during the first half of 2025.
Early-stage lung cancer and metastatic uptake are fueling strong sales momentum for Keytruda.
FDA approval of subcutaneous Keytruda Qlex is likely to extend protection beyond 2028.
Merck (MRK - Free Report) holds a strong foothold in the oncology space, propelled by its blockbuster PD-L1 inhibitor, Keytruda. The company’s biggest revenue driver, Keytruda, alone accounted for more than 50% of the company’s pharmaceutical sales during the first half of 2025. Keytruda’s sales rose around 7% in the first half of 2025. The drug remains the key revenue driver for Merck.
As Merck is gearing up to report its third-quarter results on Oct. 30, investors will be eagerly looking out for the sales performance of Keytruda. Sales of Keytruda are expected to have been strong in the second half, like the first, driven by rapid uptake across earlier-stage indications and metastatic indications globally. The company expects continued growth from Keytruda, particularly in the early lung cancer indication.
The Zacks Consensus Estimate for Keytruda’s sales in the third quarter is $8.50 billion, while our model estimate is $8.51 billion.
Management expects Keytruda to continue driving the majority of the revenue growth in the second half of 2025, supported by its Animal Health segment and new launches such as Winrevair and Capvaxive. Our model estimates for Keytruda sales suggest a CAGR of 5.2% over the next three years.
Last month, the FDA approved the subcutaneous (SC) formulation of Keytruda, known as Keytruda Qlex, which can enhance patient convenience. With Keytruda IV set to lose exclusivity in 2028, the newly approved SC version carries its own patents that extend protection well beyond that timeline. Keytruda IV sales are expected to remain strong until 2028.
Though Merck is riding on the success of Keytruda, the company’s heavy dependence on the drug for growth remains a concern. Also, competitive pressure might increase for Keytruda in the near future.
Competition From Other PD-L1 Inhibitors
Keytruda faces competition from other PD-L1 inhibitors, including Bristol-Myers’ (BMY - Free Report) Opdivo, Roche’s (RHHBY - Free Report) Tecentriq and AstraZeneca’s (AZN - Free Report) Imfinzi.
BMY’s Opdivo, like Keytruda, is approved across multiple cancer types, including lung, melanoma and kidney cancers. Bristol Myers recorded $4.82 billion in Opdivo sales during the first half of 2025, up 9% year over year.
Tecentriq is Roche’s leading immuno-oncology drug approved for multiple cancer indications. RHHBY recorded CHF 1.7 billion in Tecentriq sales in the first half of 2025.
AZN’s Imfinzi generated sales of $2.72 billion in the first half of 2025, up 21%, driven by demand growth in bladder, lung and liver cancer indications. Imfinzi has strategically expanded its use across multiple cancer indications, strengthening AstraZeneca’s oncology portfolio.
MRK's Price Performance, Valuation and Estimates
Year to date, shares of Merck have declined 12.1% against the industry’s rise of 7.8%. The stock has also underperformed the sector and the S&P 500 during the same time frame, 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 ratio, the company’s shares currently trade at 9.15 forward earnings, lower than 15.88 for the industry and its 5-year mean of 12.66.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings per share has inched up from $8.92 to $8.93, while the same for 2026 has decreased from $9.61 to $9.58 over the past 60 days.
Image: Bigstock
Will Keytruda Continue to Aid Merck's Top Line in Q3 Earnings?
Key Takeaways
Merck (MRK - Free Report) holds a strong foothold in the oncology space, propelled by its blockbuster PD-L1 inhibitor, Keytruda. The company’s biggest revenue driver, Keytruda, alone accounted for more than 50% of the company’s pharmaceutical sales during the first half of 2025. Keytruda’s sales rose around 7% in the first half of 2025. The drug remains the key revenue driver for Merck.
As Merck is gearing up to report its third-quarter results on Oct. 30, investors will be eagerly looking out for the sales performance of Keytruda. Sales of Keytruda are expected to have been strong in the second half, like the first, driven by rapid uptake across earlier-stage indications and metastatic indications globally. The company expects continued growth from Keytruda, particularly in the early lung cancer indication.
The Zacks Consensus Estimate for Keytruda’s sales in the third quarter is $8.50 billion, while our model estimate is $8.51 billion.
Management expects Keytruda to continue driving the majority of the revenue growth in the second half of 2025, supported by its Animal Health segment and new launches such as Winrevair and Capvaxive. Our model estimates for Keytruda sales suggest a CAGR of 5.2% over the next three years.
Last month, the FDA approved the subcutaneous (SC) formulation of Keytruda, known as Keytruda Qlex, which can enhance patient convenience. With Keytruda IV set to lose exclusivity in 2028, the newly approved SC version carries its own patents that extend protection well beyond that timeline. Keytruda IV sales are expected to remain strong until 2028.
Though Merck is riding on the success of Keytruda, the company’s heavy dependence on the drug for growth remains a concern. Also, competitive pressure might increase for Keytruda in the near future.
Competition From Other PD-L1 Inhibitors
Keytruda faces competition from other PD-L1 inhibitors, including Bristol-Myers’ (BMY - Free Report) Opdivo, Roche’s (RHHBY - Free Report) Tecentriq and AstraZeneca’s (AZN - Free Report) Imfinzi.
BMY’s Opdivo, like Keytruda, is approved across multiple cancer types, including lung, melanoma and kidney cancers. Bristol Myers recorded $4.82 billion in Opdivo sales during the first half of 2025, up 9% year over year.
Tecentriq is Roche’s leading immuno-oncology drug approved for multiple cancer indications. RHHBY recorded CHF 1.7 billion in Tecentriq sales in the first half of 2025.
AZN’s Imfinzi generated sales of $2.72 billion in the first half of 2025, up 21%, driven by demand growth in bladder, lung and liver cancer indications. Imfinzi has strategically expanded its use across multiple cancer indications, strengthening AstraZeneca’s oncology portfolio.
MRK's Price Performance, Valuation and Estimates
Year to date, shares of Merck have declined 12.1% against the industry’s rise of 7.8%. The stock has also underperformed the sector and the S&P 500 during the same time frame, 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 ratio, the company’s shares currently trade at 9.15 forward earnings, lower than 15.88 for the industry and its 5-year mean of 12.66.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings per share has inched up from $8.92 to $8.93, while the same for 2026 has decreased from $9.61 to $9.58 over the past 60 days.
Image Source: Zacks Investment Research
MRK's Zacks Rank
Merck currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.