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Eli Lilly or Merck: Where Should Investors Put Their Money?
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Key Takeaways
Eli Lilly's Mounjaro and Zepbound now drive about 36% of revenues, fueling strong sales growth into 2026.
LLY's obesity pipeline includes late-stage candidates, orforglipron and retatrutide
Merck relies heavily on Keytruda, with concerns rising ahead of its 2028 loss of exclusivity.
Eli Lilly (LLY - Free Report) and Merck (MRK - Free Report) are both major global pharmaceutical companies with blockbuster drug portfolios and deep pipelines. Both companies have a strong presence in oncology, immunology and neuroscience areas.
Lilly boasts a leading presence in cardiometabolic health, with GLP-1 drugs Mounjaro and Zepbound accounting for around 36% of the company’s total revenues. Oncology drives more than 60% of Merck’s total revenues, with its blockbuster cancer drug Keytruda contributing more than 50% of the company’s pharmaceutical sales.
But which one is a better investment option today? Let’s take a closer look at their fundamentals, growth prospects and challenges to make an informed choice.
The Case for Lilly
Lilly has seen tremendous success with its popular tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound.
Despite being on the market for only around three years, Mounjaro and Zepbound have become key top-line drivers for Lilly, with demand rising rapidly. Launches of Mounjaro and Zepbound in new international markets and improved supply from ramped-up production in the United States have led to strong sales growth in 2025. Mounjaro and Zepbound are expected to continue to see strong demand in 2026. Regulatory approvals for new indications and improved production capacity are expected to boost sales further.
In addition to Mounjaro and Zepbound, Lilly has gained approvals for several other new drugs over the past couple of years, including Omvoh, Jaypirca, Ebglyss and Kisunla. These newly approved drugs are also contributing to Lilly’s revenue growth.
Lilly expects its new drugs, Mounjaro, Zepbound, Omvoh, Jaypirca, Ebglyss and Kisunla, along with the expanded use of existing drugs, to drive sales growth in 2026.
Lilly is investing broadly in obesity and has several new molecules currently in clinical development, including two late-stage candidates, orforglipron, a once-daily oral GLP-1 small molecule, and retatrutide, a GGG tri-agonist. Lilly has announced positive data across six studies on orforglipron in obesity and type II diabetes. An oral pill like orforglipron has the potential to be a more convenient alternative to injectable treatments like Zepbound and rival Novo Nordisk’s (NVO - Free Report) Wegovy. Lilly plans to file regulatory applications for orforglipron in obesity later this year, setting up the timeline for a potential launch next year.
Lilly’s triple-acting incretin, retatrutide (which combines GLP-1, GIP and glucagon), delivered significant weight loss with substantial relief from osteoarthritis pain in a phase III study in patients with obesity and knee osteoarthritis pain. Data from the phase III study were announced earlier this month.
LLY is also working to diversify beyond GLP-1 drugs by expanding into cardiovascular, oncology, and neuroscience areas. In 2025, it announced several M&A deals. It acquired Verve Therapeutics to add gene therapies for heart disease to its pipeline. Earlier this month, LLY closed the acquisition of Adverum Biotechnologies, which added the latter’s lead candidate, Ixo-vec, an intravitreal single-administration gene therapy being developed in phase III to treat vision loss associated with wet age-related macular degeneration.
Also, earlier this month, President Trump announced deals with Lilly and NVO to cut prices of their respective GLP-1 therapies for obesity, Zepbound and Wegovy, in exchange for Medicare access for the drugs and a three-year exemption from tariffs on pharmaceutical imports.
Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States. Potential competition in the GLP-1 diabetes/obesity market is a key headwind.
Mounjaro and Zepbound face strong competition from Novo Nordisk’s semaglutide medicines, Ozempic for diabetes and Wegovy for obesity.
Several other companies like Amgen, Structure Therapeutics and Viking Therapeutics are also making rapid progress in the development of more potent and convenient GLP-1-based candidates in their clinical pipeline. Novo Nordisk, Lilly, Structure Therapeutics and Viking Therapeutics are racing to introduce oral weight-loss pills.
The Case for MRK
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda has played an instrumental role in driving Merck’s steady revenue growth in the past few years. Keytruda recorded sales of $23.3 billion in the first nine months of 2025, up 8% year over year. Keytruda’s sales are gaining from rapid uptake across earlier-stage indications, mainly early-stage non-small cell lung cancer.
Merck’s subcutaneous formulation of Keytruda, known as Keytruda Qlex, was approved by the FDA in September 2025. Keytruda Qlex can offer substantially quicker administration time than intravenous infusion of Keytruda.
Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
MRK’s phase III pipeline has almost tripled since 2021, supported by in-house pipeline progress as well as the addition of candidates through M&A deals. This has positioned Merck to launch around 20 new vaccines and drugs over the next few years, with many having blockbuster potential. These include Merck’s new 21-valent pneumococcal conjugate vaccine, Capvaxive, and pulmonary arterial hypertension drug, Winrevair, which are already launched and have the potential to generate significant revenues over the long term. Both products have witnessed a strong launch.
The $10 billion acquisition of Verona in 2025 added Ohtuvayre, a novel, first-in-class maintenance treatment for chronic obstructive pulmonary disease, with multibillion-dollar commercial potential. Earlier this month, Merck announced a definitive agreement to acquire Cidara Therapeutics (CDTX - Free Report) for approximately $9.2 billion.
The acquisition will add CDTX’s lead pipeline candidate, CD388, a first-in-class long-acting, strain-agnostic antiviral agent, currently being evaluated in late-stage studies for the prevention of seasonal influenza in individuals at higher risk of complications.
Merck’s Animal Health business is also a key contributor to its top-line growth, as the company is recording above-market growth.
However, sales of Gardasil, Merck’s second-largest product, are declining due to weak performance in China, resulting from sluggish demand trends amid an economic slowdown. Sales of some other Merck vaccines, like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23, have also declined so far in 2025. Merck is also seeing weakness in the diabetes franchise and the generic erosion of some drugs.
Merck is heavily reliant on Keytruda. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, it can also be argued that the company is excessively dependent on the drug, and it should look for ways to diversify its product lineup.
There are rising concerns about the firm’s ability to grow its non-oncology business ahead of the upcoming loss of exclusivity of Keytruda in 2028.
Also, competitive pressure might increase for Keytruda in the near future from dual PD-1/VEGF inhibitors like Summit Therapeutics’ ivonescimab that inhibit both the PD-1 pathway and the VEGF pathway at once. They are designed to overcome the limitations of single-target therapies like Keytruda.
How Do Estimates Compare for MRK & LLY?
The Zacks Consensus Estimate for LLY’s 2025 sales and EPS implies a year-over-year increase of 42.02% and 83.9%, respectively. EPS estimates for 2025 and 2026 have risen over the past 60 days.
LLY Estimate Movement
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MRK’s 2025 sales and EPS implies a year-over-year increase of 1.0% and 17.3%, respectively. EPS estimates for 2025 have risen from $8.92 to $8.97 over the past 60 days, while those for 2026 have declined from $9.44 to $8.70 over the same timeframe.
MRK Estimate Movement
Image Source: Zacks Investment Research
Price Performance and Valuation of LLY & MRK
Year to date, LLY’s stock has surged 34.3% and Merck’s stock has risen 28.1%. The industry has jumped 17.3% in the said time frame.
Image Source: Zacks Investment Research
MRK looks more attractive than Lilly from a valuation standpoint. Going by the price/earnings ratio, Lilly’s shares currently trade at 32.09 forward earnings, higher than 16.98 for the industry. However, the stock is trading below its 5-year mean of 34.54. Merck’s shares currently trade at 11.51 forward earnings, significantly lower than the industry as well as the stock’s 5-year mean of 12.49.
Image Source: Zacks Investment Research
Merck’s dividend yield is 3.2%, while Lilly’s is around 0.6%.
Merck has one of the world’s best-selling drugs in its portfolio, generating billions of dollars in revenues. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then. Merck’s new products, Capvaxive and Winrevair, are witnessing strong launches and have the potential to generate significant revenues over the long term. Over the last couple of years, it has been acquiring new products like Ohtuvayre. The new products can be long-term growth drivers and help fill the potential revenue gap created by Keytruda’s upcoming LOE.
However, Merck faces several challenges, including persistent challenges for Gardasil in China, potential competition for Keytruda and rising competitive and generic pressure on some of its drugs. All these factors have raised doubts about Merck’s ability to navigate the Keytruda LOE period successfully.
Despite its expensive valuation, Lilly is clearly a much better pick than Merck, given its significant price appreciation, product and pipeline portfolio in high-growth therapeutic areas like obesity, robust growth prospects and bullish analyst sentiment. With exceptional growth from Mounjaro and Zepbound, Lilly has become the first and only drugmaker to hit a $1 trillion market cap. The stock has been trading above $1000-per-share for over a month now after it hit the mark in mid-November.
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Eli Lilly or Merck: Where Should Investors Put Their Money?
Key Takeaways
Eli Lilly (LLY - Free Report) and Merck (MRK - Free Report) are both major global pharmaceutical companies with blockbuster drug portfolios and deep pipelines. Both companies have a strong presence in oncology, immunology and neuroscience areas.
Lilly boasts a leading presence in cardiometabolic health, with GLP-1 drugs Mounjaro and Zepbound accounting for around 36% of the company’s total revenues. Oncology drives more than 60% of Merck’s total revenues, with its blockbuster cancer drug Keytruda contributing more than 50% of the company’s pharmaceutical sales.
But which one is a better investment option today? Let’s take a closer look at their fundamentals, growth prospects and challenges to make an informed choice.
The Case for Lilly
Lilly has seen tremendous success with its popular tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound.
Despite being on the market for only around three years, Mounjaro and Zepbound have become key top-line drivers for Lilly, with demand rising rapidly. Launches of Mounjaro and Zepbound in new international markets and improved supply from ramped-up production in the United States have led to strong sales growth in 2025. Mounjaro and Zepbound are expected to continue to see strong demand in 2026. Regulatory approvals for new indications and improved production capacity are expected to boost sales further.
In addition to Mounjaro and Zepbound, Lilly has gained approvals for several other new drugs over the past couple of years, including Omvoh, Jaypirca, Ebglyss and Kisunla. These newly approved drugs are also contributing to Lilly’s revenue growth.
Lilly expects its new drugs, Mounjaro, Zepbound, Omvoh, Jaypirca, Ebglyss and Kisunla, along with the expanded use of existing drugs, to drive sales growth in 2026.
Lilly is investing broadly in obesity and has several new molecules currently in clinical development, including two late-stage candidates, orforglipron, a once-daily oral GLP-1 small molecule, and retatrutide, a GGG tri-agonist. Lilly has announced positive data across six studies on orforglipron in obesity and type II diabetes. An oral pill like orforglipron has the potential to be a more convenient alternative to injectable treatments like Zepbound and rival Novo Nordisk’s (NVO - Free Report) Wegovy. Lilly plans to file regulatory applications for orforglipron in obesity later this year, setting up the timeline for a potential launch next year.
Lilly’s triple-acting incretin, retatrutide (which combines GLP-1, GIP and glucagon), delivered significant weight loss with substantial relief from osteoarthritis pain in a phase III study in patients with obesity and knee osteoarthritis pain. Data from the phase III study were announced earlier this month.
LLY is also working to diversify beyond GLP-1 drugs by expanding into cardiovascular, oncology, and neuroscience areas. In 2025, it announced several M&A deals. It acquired Verve Therapeutics to add gene therapies for heart disease to its pipeline. Earlier this month, LLY closed the acquisition of Adverum Biotechnologies, which added the latter’s lead candidate, Ixo-vec, an intravitreal single-administration gene therapy being developed in phase III to treat vision loss associated with wet age-related macular degeneration.
Also, earlier this month, President Trump announced deals with Lilly and NVO to cut prices of their respective GLP-1 therapies for obesity, Zepbound and Wegovy, in exchange for Medicare access for the drugs and a three-year exemption from tariffs on pharmaceutical imports.
Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States. Potential competition in the GLP-1 diabetes/obesity market is a key headwind.
Mounjaro and Zepbound face strong competition from Novo Nordisk’s semaglutide medicines, Ozempic for diabetes and Wegovy for obesity.
Several other companies like Amgen, Structure Therapeutics and Viking Therapeutics
are also making rapid progress in the development of more potent and convenient GLP-1-based candidates in their clinical pipeline. Novo Nordisk, Lilly, Structure Therapeutics and Viking Therapeutics are racing to introduce oral weight-loss pills.
The Case for MRK
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda has played an instrumental role in driving Merck’s steady revenue growth in the past few years. Keytruda recorded sales of $23.3 billion in the first nine months of 2025, up 8% year over year. Keytruda’s sales are gaining from rapid uptake across earlier-stage indications, mainly early-stage non-small cell lung cancer.
Merck’s subcutaneous formulation of Keytruda, known as Keytruda Qlex, was approved by the FDA in September 2025. Keytruda Qlex can offer substantially quicker administration time than intravenous infusion of Keytruda.
Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
MRK’s phase III pipeline has almost tripled since 2021, supported by in-house pipeline progress as well as the addition of candidates through M&A deals. This has positioned Merck to launch around 20 new vaccines and drugs over the next few years, with many having blockbuster potential. These include Merck’s new 21-valent pneumococcal conjugate vaccine, Capvaxive, and pulmonary arterial hypertension drug, Winrevair, which are already launched and have the potential to generate significant revenues over the long term. Both products have witnessed a strong launch.
The $10 billion acquisition of Verona in 2025 added Ohtuvayre, a novel, first-in-class maintenance treatment for chronic obstructive pulmonary disease, with multibillion-dollar commercial potential. Earlier this month, Merck announced a definitive agreement to acquire Cidara Therapeutics (CDTX - Free Report) for approximately $9.2 billion.
The acquisition will add CDTX’s lead pipeline candidate, CD388, a first-in-class long-acting, strain-agnostic antiviral agent, currently being evaluated in late-stage studies for the prevention of seasonal influenza in individuals at higher risk of complications.
Merck’s Animal Health business is also a key contributor to its top-line growth, as the company is recording above-market growth.
However, sales of Gardasil, Merck’s second-largest product, are declining due to weak performance in China, resulting from sluggish demand trends amid an economic slowdown. Sales of some other Merck vaccines, like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23, have also declined so far in 2025. Merck is also seeing weakness in the diabetes franchise and the generic erosion of some drugs.
Merck is heavily reliant on Keytruda. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, it can also be argued that the company is excessively dependent on the drug, and it should look for ways to diversify its product lineup.
There are rising concerns about the firm’s ability to grow its non-oncology business ahead of the upcoming loss of exclusivity of Keytruda in 2028.
Also, competitive pressure might increase for Keytruda in the near future from dual PD-1/VEGF inhibitors like Summit Therapeutics’ ivonescimab that inhibit both the PD-1 pathway and the VEGF pathway at once. They are designed to overcome the limitations of single-target therapies like Keytruda.
How Do Estimates Compare for MRK & LLY?
The Zacks Consensus Estimate for LLY’s 2025 sales and EPS implies a year-over-year increase of 42.02% and 83.9%, respectively. EPS estimates for 2025 and 2026 have risen over the past 60 days.
LLY Estimate Movement
The Zacks Consensus Estimate for MRK’s 2025 sales and EPS implies a year-over-year increase of 1.0% and 17.3%, respectively. EPS estimates for 2025 have risen from $8.92 to $8.97 over the past 60 days, while those for 2026 have declined from $9.44 to $8.70 over the same timeframe.
MRK Estimate Movement
Price Performance and Valuation of LLY & MRK
Year to date, LLY’s stock has surged 34.3% and Merck’s stock has risen 28.1%. The industry has jumped 17.3% in the said time frame.
MRK looks more attractive than Lilly from a valuation standpoint. Going by the price/earnings ratio, Lilly’s shares currently trade at 32.09 forward earnings, higher than 16.98 for the industry. However, the stock is trading below its 5-year mean of 34.54. Merck’s shares currently trade at 11.51 forward earnings, significantly lower than the industry as well as the stock’s 5-year mean of 12.49.
Merck’s dividend yield is 3.2%, while Lilly’s is around 0.6%.
LLY or MRK: Which is a Better Pick?
Merck and Lilly have a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merck has one of the world’s best-selling drugs in its portfolio, generating billions of dollars in revenues. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then. Merck’s new products, Capvaxive and Winrevair, are witnessing strong launches and have the potential to generate significant revenues over the long term. Over the last couple of years, it has been acquiring new products like Ohtuvayre. The new products can be long-term growth drivers and help fill the potential revenue gap created by Keytruda’s upcoming LOE.
However, Merck faces several challenges, including persistent challenges for Gardasil in China, potential competition for Keytruda and rising competitive and generic pressure on some of its drugs. All these factors have raised doubts about Merck’s ability to navigate the Keytruda LOE period successfully.
Despite its expensive valuation, Lilly is clearly a much better pick than Merck, given its significant price appreciation, product and pipeline portfolio in high-growth therapeutic areas like obesity, robust growth prospects and bullish analyst sentiment. With exceptional growth from Mounjaro and Zepbound, Lilly has become the first and only drugmaker to hit a $1 trillion market cap. The stock has been trading above $1000-per-share for over a month now after it hit the mark in mid-November.