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AZN vs. MRK: Which Oncology Stock Offers Better Investment Potential?
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Key Takeaways
AstraZeneca and Merck lead oncology, but both face competition and legacy drug erosion pressures.
MRK relies heavily on Keytruda, with LOE risk by 2028 and declining vaccine and diabetes sales.
AstraZeneca shows steadier growth, rising estimates and targets $80B revenues by 2030.
AstraZeneca (AZN - Free Report) and Merck (MRK - Free Report) are leading global drugmakers with broad, diversified portfolios. Merck is U.S.-based, while AstraZeneca is headquartered in Cambridge, UK. Both hold strong leadership in oncology, which remains their primary growth driver. Oncology contributes over 60% of Merck’s revenues, led by blockbuster Keytruda, accounting for more than half of pharma sales.
For AstraZeneca, oncology represents about 44% of revenues, with segment sales rising 14% at constant exchange rates in 2025. Beyond oncology, AstraZeneca has strength in immunology, rare diseases, vaccines, and cardiovascular/respiratory, while Merck spans vaccines, neuroscience, diabetes, virology and animal health.
The two also partner on PARP inhibitor Lynparza, highlighting strategic collaboration. While both face headwinds from legacy product erosion and intensifying competition, their pipelines and innovation capabilities remain key differentiators—raising the question of which offers superior long-term investment potential.
The Case for MRK
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda, approved for several types of cancer, alone accounts for around 55% of the company’s pharmaceutical sales. The drug has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Keytruda recorded sales of $31.7 billion in 2025, up 7% year over year. The company expects the growth to continue till it loses patent exclusivity in 2028.
Merck expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
Merck’s Animal Health business is a key contributor to its top-line growth, with sales expected to more than double by mid-2030s.
Its 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. Some key new products with blockbuster potential are its 21-valent pneumococcal conjugate vaccine, Capvaxive, and pulmonary arterial hypertension drug, Winrevair. Both products have witnessed a strong launch and hold the potential to generate significant revenues over the long term.
The company has been on an acquisition spree in the past year, as it faces the looming patent expiration of Keytruda in 2028. The acquisition of Verona in 2025 added Ohtuvayre, a novel, first-in-class maintenance treatment for chronic obstructive pulmonary disease, with multibillion-dollar commercial potential. In January 2026, Merck acquired Cidara Therapeutics, which added its lead pipeline candidate, MK-1406 (formerly 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.
Last month, Merck announced a definitive agreement to acquire California-based cancer biotech, Terns Pharmaceuticals (TERN - Free Report) , for $6.7 billion. The deal, if successfully closed, will add Terns’ lead candidate, TERN-701, in early-stage development for treating certain patients with chronic myeloid leukemia to Merck’s hematology/cancer pipeline.
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. Gardasil sales are not expected to improve in 2026. Sales of some other Merck vaccines like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23 also declined in 2025. MRK is also seeing declining demand for its diabetes products (Januvia/Janumet) and the generic erosion of some drugs like Isentress/Isentress HD, Bridion and Dificid.
Merck is heavily reliant on Keytruda. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring slightly after that. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter, Keytruda’s sales are likely to decline sharply.
Also, competitive pressure might increase for Keytruda in the near future from dual PD-1/VEGF inhibitors 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.
Nonetheless, Merck’s new products, Winrevair, Welireg and Capvaxive, key pipeline progress and expansion of its respiratory and infectious disease portfolios through the acquisitions of Verona Pharma and Cidara Therapeutics have improved its long-term growth prospects.
The Case for AstraZeneca
AstraZeneca now has 16 blockbuster medicines, including Tagrisso, Fasenra, Farxiga, Imfinzi, Lynparza, Soliris and Ultomiris in its portfolio, with sales (product sales and alliance revenues) exceeding $1 billion. These drugs drove AstraZeneca’s 8% top-line growth and 11% core EPS growth in 2025, backed by increasing demand trends.
Newer drugs like Wainua, Airsupra, Saphnelo, Datroway (partnered with Daiichi Sankyo) and Truqap contributed to top-line growth in 2025, more than offsetting the loss of exclusivity of some mature brands like Brilinta, Pulmicort and Soliris. The rare disease business is also showing some improving trends.
In 2026, AZN expects continued revenue and earnings growth. It expects total revenues to grow by a mid-to-high single-digit percentage at CER in 2026, while core EPS is expected to increase by a low double-digit percentage at CER.
AstraZeneca has set itself some visible targets for the next few years. It expects to generate $80 billion in total revenues by 2030. By the said time frame, AstraZeneca plans to launch 20 new medicines, with around half of these already launched/approved. It believes that many of these new medicines will have the potential to generate more than $5 billion in peak-year revenues. The company is also on track to achieve a mid-30s percentage core operating margin by 2026.
AstraZeneca also boasts a robust pipeline and expects results of more than 20 phase III studies this year.
AstraZeneca faces its share of challenges, like the impact of Part D redesign on U.S. oncology sales and ongoing investigations at its China subsidiary. Generic/biosimilar competition in the United States and Europe is hurting sales of key drugs like Brilinta, Soliris and Farxiga.
How Do Estimates Compare for AZN & MRK?
The Zacks Consensus Estimate for AZN’s 2026 sales and EPS implies a year-over-year increase of 6.9% and 12.5%, respectively. EPS estimates for 2026 have risen from $10.21 to $10.30 over the past 60 days, while those for 2027 have risen from $11.46 to $11.58 over the same timeframe.
AZN Estimate Movement
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MRK’s 2026 sales implies a year-over-year increase of 2.5%, while EPS is expected to decline 41.4%. EPS estimates for 2026 have declined from $5.96 to $5.26 over the past 60 days, while those for 2027 have declined from $9.98 to $9.89 over the same timeframe.
MRK Estimate Movement
Image Source: Zacks Investment Research
Price Performance and Valuation of AZN & MRK
In the past year, AstraZeneca’s stock has risen 57.4% compared with the industry’s increase of 26.1%. Merck’s stock has risen 58.8%.
Image Source: Zacks Investment Research
MRK looks slightly more attractive than AstraZeneca from a valuation standpoint. Going by the price/earnings ratio, AstraZeneca’s shares currently trade at 19.20 forward earnings, higher than 17.09 for the industry and its 5-year mean of 17.58. Merck’s shares currently trade at 18.90 forward earnings, higher than the industry as well as the stock’s 5-year mean of 12.64.
Image Source: Zacks Investment Research
AstraZeneca’s dividend yield is 2.1% while Merck’s is higher at 2.8%.
Stocks of both companies have shown strength in the past year.
Merck has one of the world’s best-selling drugs in its portfolio — Keytruda — generating billions of dollars in revenues. Merck’s new products and strong progress in its pipeline have increased confidence that Merck may be able to maintain growth even after Keytruda loses exclusivity. However, Merck’s several challenges, including Keytruda’s upcoming LOE cliff, persistent challenges for Gardasil in China, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs, cloud near-term growth prospects. Also, estimates have declined recently due to costs related to its various M&A deals.
On the other hand, for AstraZeneca, the top-line growth momentum of 2025 is likely to continue in 2026 despite the generic erosion of some drugs. Moreover, the company has clearer growth targets ($80 billion in revenues by 2030).
AstraZeneca is a safer bet than Merck, as it has demonstrated more efficient profitability, and its upside potential appears to be higher. Though Merck’s long-term growth outlook seems to be improving, its prospects for growth in the near term are limited.
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AZN vs. MRK: Which Oncology Stock Offers Better Investment Potential?
Key Takeaways
AstraZeneca (AZN - Free Report) and Merck (MRK - Free Report) are leading global drugmakers with broad, diversified portfolios. Merck is U.S.-based, while AstraZeneca is headquartered in Cambridge, UK. Both hold strong leadership in oncology, which remains their primary growth driver. Oncology contributes over 60% of Merck’s revenues, led by blockbuster Keytruda, accounting for more than half of pharma sales.
For AstraZeneca, oncology represents about 44% of revenues, with segment sales rising 14% at constant exchange rates in 2025. Beyond oncology, AstraZeneca has strength in immunology, rare diseases, vaccines, and cardiovascular/respiratory, while Merck spans vaccines, neuroscience, diabetes, virology and animal health.
The two also partner on PARP inhibitor Lynparza, highlighting strategic collaboration. While both face headwinds from legacy product erosion and intensifying competition, their pipelines and innovation capabilities remain key differentiators—raising the question of which offers superior long-term investment potential.
The Case for MRK
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda, approved for several types of cancer, alone accounts for around 55% of the company’s pharmaceutical sales. The drug has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Keytruda recorded sales of $31.7 billion in 2025, up 7% year over year. The company expects the growth to continue till it loses patent exclusivity in 2028.
Merck expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
Merck’s Animal Health business is a key contributor to its top-line growth, with sales expected to more than double by mid-2030s.
Its 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. Some key new products with blockbuster potential are its 21-valent pneumococcal conjugate vaccine, Capvaxive, and pulmonary arterial hypertension drug, Winrevair. Both products have witnessed a strong launch and hold the potential to generate significant revenues over the long term.
The company has been on an acquisition spree in the past year, as it faces the looming patent expiration of Keytruda in 2028. The acquisition of Verona in 2025 added Ohtuvayre, a novel, first-in-class maintenance treatment for chronic obstructive pulmonary disease, with multibillion-dollar commercial potential. In January 2026, Merck acquired Cidara Therapeutics, which added its lead pipeline candidate, MK-1406 (formerly 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.
Last month, Merck announced a definitive agreement to acquire California-based cancer biotech, Terns Pharmaceuticals (TERN - Free Report) , for $6.7 billion. The deal, if successfully closed, will add Terns’ lead candidate, TERN-701, in early-stage development for treating certain patients with chronic myeloid leukemia to Merck’s hematology/cancer pipeline.
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. Gardasil sales are not expected to improve in 2026. Sales of some other Merck vaccines like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23 also declined in 2025. MRK is also seeing declining demand for its diabetes products (Januvia/Janumet) and the generic erosion of some drugs like Isentress/Isentress HD, Bridion and Dificid.
Merck is heavily reliant on Keytruda. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring slightly after that. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter, Keytruda’s sales are likely to decline sharply.
Also, competitive pressure might increase for Keytruda in the near future from dual PD-1/VEGF inhibitors 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.
Nonetheless, Merck’s new products, Winrevair, Welireg and Capvaxive, key pipeline progress and expansion of its respiratory and infectious disease portfolios through the acquisitions of Verona Pharma and Cidara Therapeutics have improved its long-term growth prospects.
The Case for AstraZeneca
AstraZeneca now has 16 blockbuster medicines, including Tagrisso, Fasenra, Farxiga, Imfinzi, Lynparza, Soliris and Ultomiris in its portfolio, with sales (product sales and alliance revenues) exceeding $1 billion. These drugs drove AstraZeneca’s 8% top-line growth and 11% core EPS growth in 2025, backed by increasing demand trends.
Newer drugs like Wainua, Airsupra, Saphnelo, Datroway (partnered with Daiichi Sankyo) and Truqap contributed to top-line growth in 2025, more than offsetting the loss of exclusivity of some mature brands like Brilinta, Pulmicort and Soliris. The rare disease business is also showing some improving trends.
In 2026, AZN expects continued revenue and earnings growth. It expects total revenues to grow by a mid-to-high single-digit percentage at CER in 2026, while core EPS is expected to increase by a low double-digit percentage at CER.
AstraZeneca has set itself some visible targets for the next few years. It expects to generate $80 billion in total revenues by 2030. By the said time frame, AstraZeneca plans to launch 20 new medicines, with around half of these already launched/approved. It believes that many of these new medicines will have the potential to generate more than $5 billion in peak-year revenues. The company is also on track to achieve a mid-30s percentage core operating margin by 2026.
AstraZeneca also boasts a robust pipeline and expects results of more than 20 phase III studies this year.
AstraZeneca faces its share of challenges, like the impact of Part D redesign on U.S. oncology sales and ongoing investigations at its China subsidiary. Generic/biosimilar competition in the United States and Europe is hurting sales of key drugs like Brilinta, Soliris and Farxiga.
How Do Estimates Compare for AZN & MRK?
The Zacks Consensus Estimate for AZN’s 2026 sales and EPS implies a year-over-year increase of 6.9% and 12.5%, respectively. EPS estimates for 2026 have risen from $10.21 to $10.30 over the past 60 days, while those for 2027 have risen from $11.46 to $11.58 over the same timeframe.
AZN Estimate Movement
The Zacks Consensus Estimate for MRK’s 2026 sales implies a year-over-year increase of 2.5%, while EPS is expected to decline 41.4%. EPS estimates for 2026 have declined from $5.96 to $5.26 over the past 60 days, while those for 2027 have declined from $9.98 to $9.89 over the same timeframe.
MRK Estimate Movement
Image Source: Zacks Investment Research
Price Performance and Valuation of AZN & MRK
In the past year, AstraZeneca’s stock has risen 57.4% compared with the industry’s increase of 26.1%. Merck’s stock has risen 58.8%.
MRK looks slightly more attractive than AstraZeneca from a valuation standpoint. Going by the price/earnings ratio, AstraZeneca’s shares currently trade at 19.20 forward earnings, higher than 17.09 for the industry and its 5-year mean of 17.58. Merck’s shares currently trade at 18.90 forward earnings, higher than the industry as well as the stock’s 5-year mean of 12.64.
AstraZeneca’s dividend yield is 2.1% while Merck’s is higher at 2.8%.
AZN or MRK: Which is a Better Pick?
Merck and AstraZeneca have a Zacks Rank #3 (Hold) each, which makes choosing one stock a difficult task. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks of both companies have shown strength in the past year.
Merck has one of the world’s best-selling drugs in its portfolio — Keytruda — generating billions of dollars in revenues. Merck’s new products and strong progress in its pipeline have increased confidence that Merck may be able to maintain growth even after Keytruda loses exclusivity. However, Merck’s several challenges, including Keytruda’s upcoming LOE cliff, persistent challenges for Gardasil in China, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs, cloud near-term growth prospects. Also, estimates have declined recently due to costs related to its various M&A deals.
On the other hand, for AstraZeneca, the top-line growth momentum of 2025 is likely to continue in 2026 despite the generic erosion of some drugs. Moreover, the company has clearer growth targets ($80 billion in revenues by 2030).
AstraZeneca is a safer bet than Merck, as it has demonstrated more efficient profitability, and its upside potential appears to be higher. Though Merck’s long-term growth outlook seems to be improving, its prospects for growth in the near term are limited.