Eli Lilly vs. Merck: Which Pharma Stock Looks Stronger Now?

Kinjel Shah May 21, 2026

NVO MRK LLY

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Key Takeaways

Lilly's Mounjaro and Zepbound drove strong Q1 growth, with sales up 125% and 80%.
Merck faces pressure from Keytruda patent expiry and weaker Gardasil sales in China.
LLY shares fell 5.2% year to date, while MRK stock gained 7.3% over the same period.

Eli Lilly (LLY - Free Report) and Merck (MRK - Free Report) are leading global pharmaceutical companies with blockbuster drug portfolios and strong pipelines. Both have an established presence in oncology, immunology and neuroscience.

Lilly has built a strong position in cardiometabolic health, with its GLP-1 drugs Mounjaro and Zepbound contributing more than 60% of the company’s total revenues. Merck, meanwhile, derives more than 60% of its revenues from oncology, with blockbuster cancer drug Keytruda accounting for around 55% of pharmaceutical sales.

But which stock is the better investment today? A closer look at their fundamentals, growth prospects and challenges can help investors make a more informed decision.

The Case for Lilly Stock

Lilly has seen tremendous success with Mounjaro and Zepbound, with demand rising rapidly. In the first quarter, Mounjaro recorded sales of $8.66 billion, up 125% year over year, while Zepbound’s sales were $4.16 billion, up 80% year over year, driven by increased demand, which offset the impact of lower pricing. The positive trend is expected to continue in 2026.

In addition to Mounjaro and Zepbound, Lilly has secured approvals for several other new therapies over the past few years. These include Omvoh, Jaypirca, Ebglyss and Kisunla. These newly approved drugs are also contributing to Lilly’s revenue growth.

Lilly is developing several next-generation, more powerful and more convenient GLP-1–based treatments, including oral options and multi-acting candidates.

In early April 2026, Lilly gained FDA approval for its once-daily oral GLP-1 pill Foundayo (orforglipron) for treating obesity. Foundayo shipments began soon after. Foundayo, which offers the benefits of GLP-1 therapy in a pill form, can prove to be a commercial game-changer for Lilly. Early launch data are encouraging. Lilly expects to launch Foundayo in most international markets during 2027.

Oral pills will be a more convenient alternative to the currently available once-weekly injectable obesity treatments like Zepbound and Novo Nordisk’s (NVO - Free Report) Wegovy. Novo Nordisk had gained approval for an oral version of its obesity drug, Wegovy, in December 2025 and launched the pill in January 2026, which gave it a first-mover advantage over Foundayo. However, Lilly may be able to close the gap quickly now that it has launched Foundayo.

In addition to obesity and diabetes, Lilly is evaluating Foundayo in six phase III studies for other diabetes and obesity-related diseases. For the type II diabetes indication, Lilly has filed regulatory applications in several countries, while it expects to file the same in the United States in late second-quarter 2026.

The company is evaluating another key candidate, triple-acting incretin, retatrutide, in type II diabetes and obesity, along with other indications like obstructive sleep apnea, knee osteoarthritis, and chronic low back pain, in late-stage studies. Retatrutide represents a new generation of “triple-action” therapy as it targets three biological pathways — GLP-1, GIP and glucagon — whereas existing medicines mostly act on one or two biological pathways.

In the past couple of years, Lilly has upped its efforts to diversify beyond GLP-1 drugs by expanding into cardiovascular, oncology and neuroscience areas. So far in 2026, it has already announced six proposed acquisitions — Centessa Pharmaceuticals, Ajax Therapeutics, Kelonia Therapeutics, Orna Therapeutics, CrossBridge Bio and Ventyx Biosciences — to expand beyond its GLP-1 franchise.

Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States. Price is expected to continue to be a drag on top-line growth in the low to mid-teens percentage in 2026. Rising competition in the GLP-1 diabetes/obesity market is a key headwind. Also, sales of late-life cycle products like Trulicity, Taltz and Verzenio are expected to be flat to down in 2026.

The Case for MRK Stock

Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda, approved for several types of cancers, has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Keytruda recorded sales of $8.0 billion in the first quarter of 2026, up 8% year over year.

Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then.

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 also a key contributor to its top-line growth, with sales expected to more than double by mid-2030s.

Merck’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. Merck expects to launch 20 new drugs by 2030, with many already launched.

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 have the potential to generate significant revenues over the long term.

The company has accelerated acquisitions over the past year as it prepares for the 2028 patent expiry of Keytruda. The company strengthened its pipeline with the 2025 acquisition of Verona Pharma, adding COPD drug Ohtuvayre, while the 2026 buyouts of Cidara Therapeutics and Terns Pharmaceuticals added late-stage influenza and hematology/cancer pipeline assets, respectively.

Sales of Merck’s second-largest product, its HPV vaccine, Gardasil, plunged 22% to $1.07 billion in the first quarter due to continued weak sales performance in China. Sales of Gardasil are declining in China due to weak demand trends amid an economic slowdown. The company is also seeing lower demand for the vaccine in Japan. Gardasil sales are not expected to improve in 2026.

Sales of some other Merck vaccines, like Proquad, M-M-R II, Varivax, Rotateq and Vaxneuvance, also declined in the first quarter.

Merck is heavily reliant on Keytruda. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, the company is excessively dependent on the drug. 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.

MRK is seeing declining sales of key products such as Januvia/Janumet, Isentress and Dificid due to weak demand, patent expirations and rising generic competition. The company expects generic erosion of Januvia/Janumet, Bridion and Dificid to reduce 2026 revenues by around $2.5 billion.

Nonetheless, Merck’s new products, Winrevair, Welireg and Capvaxive, key pipeline progress and expansion of its respiratory and infectious disease and oncology portfolios through the acquisitions of Verona Pharma, Cidara Therapeutics and Terns Pharmaceuticals have improved its long-term growth prospects.

How Do Estimates Compare for MRK & LLY?

The Zacks Consensus Estimate for LLY’s 2026 sales and EPS implies a year-over-year increase of 30.5% and 46.4%, respectively. The Zacks Consensus Estimate for 2026 has risen from $34.70 to $35.45 per share over the past 30 days, while that for 2027 has risen from $42.67 to $44.23 per share over the same timeframe.