We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Merck's New Products Aid Growth as Keytruda LOE Test Looms?
Read MoreHide Full Article
Key Takeaways
Merck faces Keytruda IV's 2028 LOE as the drug drives over half of its pharmaceutical sales.
New products like Capvaxive and Winrevair show strong early uptake and rising 2025 sales.
Updated approvals and expanding uses for Winrevair and other launches bolster Merck's portfolio.
Merck (MRK - Free Report) is going to face a major patent cliff, as its blockbuster PD-L1 therapy Keytruda is nearing loss of exclusivity (LOE) in 2028. The company’s biggest revenue driver, Keytruda, is approved for several types of cancer and has played a key role in driving Merck’s steady revenue growth over the past few years.
Keytruda accounts for more than 50% of the company’s pharmaceutical sales. The drug recorded sales worth $23.3 billion in the first nine months of 2025, up 8% year over year.
In September 2025, the FDA approved a subcutaneous (SC) formulation of Keytruda, known as Keytruda Qlex. Though Keytruda’s intravenous (IV) formulation is 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. The approval of Keytruda Qlex can help lower the negative impact of Keytruda's LOE.
However, with the Keytruda IV formulation facing an LOE in 2028, Merck has been looking for ways to diversify its product portfolio, especially by launching new products to navigate the potential challenges.
Among its new products, Merck is pinning hopes on its 21-valent pneumococcal conjugate vaccine, Capvaxive and pulmonary arterial hypertension (PAH) drug, Winrevair, to drive its long-term growth. Capvaxive was approved in the United States in June 2024 and in the EU in March 2025.
Winrevair was approved to treat PAH in adults with (PAH, WHO Group 1) in the United States and the EU in 2024.
Capvaxive and Winrevair have witnessed a strong uptake so far. Capvaxive recorded sales of $480 million in the first nine months of 2025 and Winrevair generated sales worth $976 million during the same time. Per management, Winrevair’s launch in the United States continues to outperform due to a steady increase in new prescription trends.
Management believes that both Capvaxive and Winrevair have the potential to generate significant long-term revenue growth, given the strong launch they have witnessed so far.
Sales of another new product, novel HIF-2α inhibitor Welireg, which is approved for treating various types of cancer indications, rose around 42.1% year over year to $496 million in the first nine months of 2025.
Merck’s newest respiratory syncytial virus (RSV) antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025, while it is under review in the EU. Enflonsia recorded sales worth $79 million in the third quarter of 2025, consisting of inventory stocking.
A fixed-dose combination of doravirine and islatravir for the treatment of HIV is under review in the United States, with an FDA decision expected in April next year.
Though Merck’s new products hold significant potential, we will have to wait for more sustainable growth heading into the new year, as the company nears Keytruda LOE.
MRK's Competition in the Target Market
Despite the strong potential of Merck’s new products, competitive pressure in the target market remains a major challenge.
Winrevair is likely to face stiff competition in the PAH market, which remains highly competitive. Significant players in the PAH market are United Therapeutics (UTHR - Free Report) and J&J (JNJ - Free Report) .
United Therapeutics markets four drugs to treat PAH in the United States — Remodulin, Orenitram, Tyvaso and Adcirca. UTHR’s Tyvaso recorded sales of $1.41 billion, while Remodulin and Orenitram generated sales of $398.8 million and $375.7 million, respectively, in the first nine months of 2025.
J&J’s key PAH drugs include Opsumit and Uptravi. JNJ recorded revenues of $3.25 billion from its PAH franchise in the first nine months of 2025.
Meanwhile, Enflonsia is also likely to face competition from AstraZeneca/Sanofi’s RSV antibody Beyfortus, which was also approved for a similar indication in 2023.
Besides antibodies, several vaccines have been approved for preventing RSV in certain patients in the United States. These include Pfizer’s Abrysvo, GSK’s Arexvy and Moderna’s mRESVIA.
MRK's Price Performance, Valuation and Estimates
Year to date, shares of Merck have increased 2.9% compared with the industry’s rally of 15.6%. 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 11.59 forward earnings, lower than 16.91 for the industry and its 5-year mean of 12.54.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings per share has increased from $8.94 per share to $8.98, while the same for 2026 has decreased from $9.55 to $8.81 over the past 60 days.
Image: Bigstock
Can Merck's New Products Aid Growth as Keytruda LOE Test Looms?
Key Takeaways
Merck (MRK - Free Report) is going to face a major patent cliff, as its blockbuster PD-L1 therapy Keytruda is nearing loss of exclusivity (LOE) in 2028. The company’s biggest revenue driver, Keytruda, is approved for several types of cancer and has played a key role in driving Merck’s steady revenue growth over the past few years.
Keytruda accounts for more than 50% of the company’s pharmaceutical sales. The drug recorded sales worth $23.3 billion in the first nine months of 2025, up 8% year over year.
In September 2025, the FDA approved a subcutaneous (SC) formulation of Keytruda, known as Keytruda Qlex. Though Keytruda’s intravenous (IV) formulation is 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. The approval of Keytruda Qlex can help lower the negative impact of Keytruda's LOE.
However, with the Keytruda IV formulation facing an LOE in 2028, Merck has been looking for ways to diversify its product portfolio, especially by launching new products to navigate the potential challenges.
Among its new products, Merck is pinning hopes on its 21-valent pneumococcal conjugate vaccine, Capvaxive and pulmonary arterial hypertension (PAH) drug, Winrevair, to drive its long-term growth. Capvaxive was approved in the United States in June 2024 and in the EU in March 2025.
Winrevair was approved to treat PAH in adults with (PAH, WHO Group 1) in the United States and the EU in 2024.
Capvaxive and Winrevair have witnessed a strong uptake so far. Capvaxive recorded sales of $480 million in the first nine months of 2025 and Winrevair generated sales worth $976 million during the same time. Per management, Winrevair’s launch in the United States continues to outperform due to a steady increase in new prescription trends.
Management believes that both Capvaxive and Winrevair have the potential to generate significant long-term revenue growth, given the strong launch they have witnessed so far.
Sales of another new product, novel HIF-2α inhibitor Welireg, which is approved for treating various types of cancer indications, rose around 42.1% year over year to $496 million in the first nine months of 2025.
Merck’s newest respiratory syncytial virus (RSV) antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025, while it is under review in the EU. Enflonsia recorded sales worth $79 million in the third quarter of 2025, consisting of inventory stocking.
A fixed-dose combination of doravirine and islatravir for the treatment of HIV is under review in the United States, with an FDA decision expected in April next year.
Though Merck’s new products hold significant potential, we will have to wait for more sustainable growth heading into the new year, as the company nears Keytruda LOE.
MRK's Competition in the Target Market
Despite the strong potential of Merck’s new products, competitive pressure in the target market remains a major challenge.
Winrevair is likely to face stiff competition in the PAH market, which remains highly competitive. Significant players in the PAH market are United Therapeutics (UTHR - Free Report) and J&J (JNJ - Free Report) .
United Therapeutics markets four drugs to treat PAH in the United States — Remodulin, Orenitram, Tyvaso and Adcirca. UTHR’s Tyvaso recorded sales of $1.41 billion, while Remodulin and Orenitram generated sales of $398.8 million and $375.7 million, respectively, in the first nine months of 2025.
J&J’s key PAH drugs include Opsumit and Uptravi. JNJ recorded revenues of $3.25 billion from its PAH franchise in the first nine months of 2025.
Meanwhile, Enflonsia is also likely to face competition from AstraZeneca/Sanofi’s RSV antibody Beyfortus, which was also approved for a similar indication in 2023.
Besides antibodies, several vaccines have been approved for preventing RSV in certain patients in the United States. These include Pfizer’s Abrysvo, GSK’s Arexvy and Moderna’s mRESVIA.
MRK's Price Performance, Valuation and Estimates
Year to date, shares of Merck have increased 2.9% compared with the industry’s rally of 15.6%. 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 11.59 forward earnings, lower than 16.91 for the industry and its 5-year mean of 12.54.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings per share has increased from $8.94 per share to $8.98, while the same for 2026 has decreased from $9.55 to $8.81 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.