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Can MRK's New Drugs & Pipeline Aid Long-Term Growth Post Keytruda LOE?
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Key Takeaways
Merck expects Keytruda peak sales of $35B by 2028 before the drug's loss of exclusivity.
MRK sees blockbuster potential in Capvaxive and Winrevair, as they witnessed strong launches.
Merck's phase III pipeline has nearly tripled since 2021, backed by in-house progress and M&A.
Merck (MRK - Free Report) has been betting on its newer products and a promising set of pipeline candidates to drive long-term growth as its blockbuster PD-1 inhibitor, Keytruda intravenous (IV), approaches patent expiration in 2028. The company’s expanding drug pipeline and potential new blockbuster drugs beyond Keytruda look encouraging.
Keytruda, which is approved for several types of cancer, alone accounts for around 55% of the company’s pharmaceutical sales. The drug has played a key 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, increasing 8% year over year.
Though Keytruda IV is set to face loss of exclusivity in 2028, its sales are expected to stay strong until then. Management expects Keytruda to achieve peak sales of $35 billion by 2028 before it loses exclusivity. Once biosimilars enter, Keytruda’s sales are likely to decline sharply.
As Keytruda approaches its expected loss of exclusivity in 2028, Merck is pinning hopes on its new products and key pipeline progress to deliver sustainable long-term growth and reshape its overall business mix.
Merck’s phase III pipeline has almost tripled since 2021, supported by in-house pipeline progress as well as the addition of candidates through mergers and acquisitions (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.
Capvaxive recorded sales of $142 million and Winrevair generated sales of $525 million in the first quarter of 2026. Both products have witnessed strong launches and have the potential to generate significant revenues over the long term.
Merck’s newest RSV antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025 and in the EU in April 2026. A once-daily, single-tablet two-drug regimen of doravirine and islatravir, Idvynso, was approved in the United States for virologically suppressed HIV-1 in April 2026.
Merck has other promising candidates in its late-stage pipeline, such as enlicitide decanoate/MK-0616, an oral PCSK9 inhibitor for hypercholesterolemia, tulisokibart, a TL1A inhibitor for ulcerative colitis as well as Daiichi-Sankyo-partnered antibody-drug conjugates.
MRK has also made substantial investments in strategic M&A deals in recent times to build a more durable long-term portfolio, particularly in key areas like respiratory, oncology and infectious disease, through the acquisitions of Verona Pharma, Cidara Therapeutics and Terns Pharmaceuticals.
Building on this growing optimism, Merck’s new products, pipeline progress and broader portfolio expansion through recent acquisitions have boosted confidence in its ability to sustain growth even after Keytruda loses exclusivity, while continuing to keep competition in check.
PD-L1 Inhibitors Competing With MRK’s Keytruda
Keytruda faces competition from other PD-L1 inhibitors, including Roche’s (RHHBY - Free Report) Tecentriq, AstraZeneca’s (AZN - Free Report) Imfinzi and Bristol Myers’ (BMY - Free Report) Opdivo.
Tecentriq is Roche’s leading immuno-oncology drug approved for multiple cancer indications. RHHBY recorded CHF 811 million in Tecentriq sales in the first quarter of 2026, up 4% year over year, driven by growth in new indications.
AZN’s Imfinzi generated sales of $1.69 billion in the first quarter of 2026, up 30%, driven by demand growth across all regions from existing indications and new launches. Imfinzi has strategically expanded its use across multiple cancer indications, strengthening AstraZeneca’s oncology portfolio.
BMY’s Opdivo, like Keytruda, is approved across multiple cancer types, including lung, melanoma and kidney cancers. Bristol Myers recorded $2.15 billion in Opdivo sales in the first quarter of 2026, down 5% year over year.
MRK's Price Performance, Valuation and Estimates
Year to date, shares of Merck have risen 14.8% compared with the industry’s 3.7% rise. The stock has also outperformed 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 is trading at a discount compared with the industry. Going by the price/earnings ratio, the company’s shares currently trade at 17.01 forward earnings, lower than 17.42 for the industry but higher than its 5-year mean of 12.74.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings per share has moved up from $5.14 to $5.16, while the same for 2027 has remained stable at $9.78 over the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Can MRK's New Drugs & Pipeline Aid Long-Term Growth Post Keytruda LOE?
Key Takeaways
Merck (MRK - Free Report) has been betting on its newer products and a promising set of pipeline candidates to drive long-term growth as its blockbuster PD-1 inhibitor, Keytruda intravenous (IV), approaches patent expiration in 2028. The company’s expanding drug pipeline and potential new blockbuster drugs beyond Keytruda look encouraging.
Keytruda, which is approved for several types of cancer, alone accounts for around 55% of the company’s pharmaceutical sales. The drug has played a key 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, increasing 8% year over year.
Though Keytruda IV is set to face loss of exclusivity in 2028, its sales are expected to stay strong until then. Management expects Keytruda to achieve peak sales of $35 billion by 2028 before it loses exclusivity. Once biosimilars enter, Keytruda’s sales are likely to decline sharply.
As Keytruda approaches its expected loss of exclusivity in 2028, Merck is pinning hopes on its new products and key pipeline progress to deliver sustainable long-term growth and reshape its overall business mix.
Merck’s phase III pipeline has almost tripled since 2021, supported by in-house pipeline progress as well as the addition of candidates through mergers and acquisitions (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.
Capvaxive recorded sales of $142 million and Winrevair generated sales of $525 million in the first quarter of 2026. Both products have witnessed strong launches and have the potential to generate significant revenues over the long term.
Merck’s newest RSV antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025 and in the EU in April 2026. A once-daily, single-tablet two-drug regimen of doravirine and islatravir, Idvynso, was approved in the United States for virologically suppressed HIV-1 in April 2026.
Merck has other promising candidates in its late-stage pipeline, such as enlicitide decanoate/MK-0616, an oral PCSK9 inhibitor for hypercholesterolemia, tulisokibart, a TL1A inhibitor for ulcerative colitis as well as Daiichi-Sankyo-partnered antibody-drug conjugates.
MRK has also made substantial investments in strategic M&A deals in recent times to build a more durable long-term portfolio, particularly in key areas like respiratory, oncology and infectious disease, through the acquisitions of Verona Pharma, Cidara Therapeutics and Terns Pharmaceuticals.
Building on this growing optimism, Merck’s new products, pipeline progress and broader portfolio expansion through recent acquisitions have boosted confidence in its ability to sustain growth even after Keytruda loses exclusivity, while continuing to keep competition in check.
PD-L1 Inhibitors Competing With MRK’s Keytruda
Keytruda faces competition from other PD-L1 inhibitors, including Roche’s (RHHBY - Free Report) Tecentriq, AstraZeneca’s (AZN - Free Report) Imfinzi and Bristol Myers’ (BMY - Free Report) Opdivo.
Tecentriq is Roche’s leading immuno-oncology drug approved for multiple cancer indications. RHHBY recorded CHF 811 million in Tecentriq sales in the first quarter of 2026, up 4% year over year, driven by growth in new indications.
AZN’s Imfinzi generated sales of $1.69 billion in the first quarter of 2026, up 30%, driven by demand growth across all regions from existing indications and new launches. Imfinzi has strategically expanded its use across multiple cancer indications, strengthening AstraZeneca’s oncology portfolio.
BMY’s Opdivo, like Keytruda, is approved across multiple cancer types, including lung, melanoma and kidney cancers. Bristol Myers recorded $2.15 billion in Opdivo sales in the first quarter of 2026, down 5% year over year.
MRK's Price Performance, Valuation and Estimates
Year to date, shares of Merck have risen 14.8% compared with the industry’s 3.7% rise. The stock has also outperformed 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 is trading at a discount compared with the industry. Going by the price/earnings ratio, the company’s shares currently trade at 17.01 forward earnings, lower than 17.42 for the industry but higher than its 5-year mean of 12.74.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings per share has moved up from $5.14 to $5.16, while the same for 2027 has remained stable at $9.78 over the past 30 days.
Image Source: Zacks Investment Research
MRK's Zacks Rank
Merck currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.