Group 1 - Merck's stock price has increased by 5% over the past four months, indicating positive market performance [1] Group 2 - Allka Research has over two decades of experience in investment, focusing on uncovering undervalued assets in various sectors including ETFs, commodities, technology, and pharmaceuticals [2] - The firm emphasizes a conservative investment approach, aiming to deliver substantial returns and strategic insights to clients [2] - Allka Research seeks to simplify investment strategies for both seasoned and novice investors, fostering a community of informed investors [2]

Company Overview - Merck & Co. Inc. (NYSE:MRK) is recognized as one of the best value stocks in Goldman Sachs' portfolio [1] - The company is a global healthcare provider delivering medicines and vaccines across various therapeutic areas, including oncology, infectious diseases, immunology, and cardiometabolic conditions [3] Product Development - On September 19, Merck announced FDA approval for KEYTRUDA QLEX injection, the first subcutaneous version of its cancer drug KEYTRUDA [1] - QLEX can be administered subcutaneously in as little as one minute, offering a faster and more convenient option compared to the traditional intravenous (IV) form [1] Market Impact - The approval of QLEX strengthens Merck's leadership in oncology, where KEYTRUDA already has approvals across 38 cancer indications [2] - The new subcutaneous format is expected to enhance adoption in community clinics and smaller practices, improving patient experience with three-week and six-week dosing schedules [2] Financial Performance - KEYTRUDA is already generating multi-billion-dollar sales annually, and the introduction of the subcutaneous version provides Merck with a new opportunity to defend and grow its oncology franchise [3]

Core Insights - Merck & Co. (MRK) and Bristol Myers Squibb (BMY) are prominent pharmaceutical companies with diverse portfolios and global reach [1][2] - MRK has a strong oncology franchise, particularly with its blockbuster drug Keytruda, while BMY focuses on transformational drugs across various therapeutic areas [1][2] Merck (MRK) Overview - MRK has over six blockbuster drugs, with Keytruda being the primary revenue driver, contributing significantly to top-line growth [3][4] - Keytruda's sales increased approximately 7% in the first half of 2025, benefiting from its approval for various oncology indications and strong uptake in early-stage non-small cell lung cancer [4][10] - The company is expanding its pipeline, with over 1,600 trials for Keytruda and plans to launch around 20 new vaccines and drugs in the coming years [5][7] - MRK's Animal Health business is also a key growth contributor, showing above-market growth [5] - A new optimization initiative aims for $3 billion in annual cost savings by the end of 2027, although Keytruda's loss of exclusivity in 2028 poses a risk to future revenue [8][10] - Declining sales of Gardasil and lower demand in key markets like China and Japan are challenges for MRK [9][11] Bristol Myers Squibb (BMY) Overview - BMY's Growth Portfolio includes drugs like Opdivo, Reblozyl, and Camzyos, which have stabilized revenue amid generic competition [12][16] - Opdivo's sales are driven by strong launches in specific cancer indications, with expectations for mid-to-high single-digit growth in 2025 [13][14] - A collaboration with BioNTech enhances BMY's pipeline, focusing on bispecific antibodies for solid tumors [15] - Despite newer drugs boosting sales, BMY faces significant headwinds from generic competition affecting legacy drugs [17] - BMY's restructuring program aims for $2 billion in annual cost savings by the end of 2027, but the company has a high debt-to-capital ratio of 73.8% [18] Financial Estimates and Performance - MRK's 2025 sales are expected to increase by 1.21%, with EPS improving by 16.73%, while BMY's sales are projected to decrease by 2.06%, but EPS is expected to rise significantly due to low prior-year figures [19][20] - Both companies have seen upward revisions in EPS estimates for 2025 and 2026 [21] - Year-to-date, MRK and BMY have underperformed the large-cap pharma industry, with losses of 19.7% and 20.5%, respectively [24] - MRK trades at 8.24X forward earnings, while BMY trades at 7.02X, both below the industry average of 14.67X [26] Dividend and Investment Considerations - Both MRK and BMY offer attractive dividend yields, with BMY at 5.61% and MRK at 4% [27] - Current rankings for both companies are Zacks Rank 3 (Hold), making the choice between them complex [28] - MRK is viewed as a better pick due to its diverse portfolio and strong Keytruda sales, despite challenges [30]

Group 1 - Analysts are optimistic about Merck & Co., Inc. (NYSE:MRK), highlighting its strong franchises in vaccines and animal health as key profit sources [1] - Merck's pipeline includes experiments combining KEYTRUDA with other drugs to target specific cancers, with a reasonable chance of success for at least one combination [1] - Impax US Sustainable Economy Fund noted Merck's high Corporate Resilience score and its contribution to a sustainable healthcare system through drug and vaccine discovery [2] Group 2 - The stock experienced weakness in Q2 due to concerns about its drug pipeline and competition from generic versions of KEYTRUDA, alongside weaker market sentiment for healthcare stocks [2] - Despite acknowledging Merck's potential, some analysts believe that certain AI stocks may offer greater promise for higher returns with limited downside risk [2]

Core Viewpoint - Merck has appointed Kai Beckmann as the new CEO, set to officially take over from Belén Garijo on May 1, 2026, ensuring a smooth transition while Garijo continues in her role until the end of her term [1][4]. Group 1: Leadership Transition - Belén Garijo has been with Merck for 15 years, leading the pharmaceutical and healthcare business for six years and serving as CEO since 2021. Her key achievements include navigating the company through the COVID-19 pandemic and geopolitical challenges, as well as optimizing the business structure through strategic acquisitions and divestitures [4][5]. - Garijo will continue to focus on the pharmaceutical and healthcare sectors after her tenure, emphasizing her commitment to meeting patient needs [4][5]. - Kai Beckmann has been a member of Merck's executive board since 2011 and has led the high-performance materials business, transforming it into a core enabler in the global semiconductor industry [5][6]. Group 2: Future Outlook - Johannes Bailou, Chairman of the Executive Board and Family Board, highlighted Garijo's leadership in restoring profitability and shaping Merck into a global technology leader. He expressed confidence in Beckmann's vision for technological transformation, which is expected to create significant value for patients, customers, and society [5][6]. - Beckmann's extensive experience in local and global markets is seen as crucial for opening a new chapter for the group, ensuring continuity and normal operations during the transition [5].

Tariffs Overview - The new tariffs include a 25% levy on heavy trucks and 100% tariffs on pharmaceuticals, set to take effect next Wednesday [2][4][9] - The tariffs are part of ongoing investigations by the Commerce Department under the Section 232 rule, which may be more difficult to legally challenge compared to previous tariffs [3][4] Pharmaceutical Sector Impact - The implementation of the 100% tariff on pharmaceuticals could increase the average tariff rate by 3.3 percentage points [5] - Major pharmaceutical companies like AstraZeneca, Johnson & Johnson, and Merck have been preparing for potential tariffs this year, with some pledging billions in US manufacturing investments [6][7] - There are uncertainties regarding whether companies can be exempted from tariffs if they are constructing US manufacturing plants, and how these new tariffs will interact with existing agreements, such as the 15% tariffs agreed upon with the EU [8]

Core Viewpoint - The announcement of a 100% tariff on patented and branded drugs by the Trump administration starting October 1, 2025, aims to pressure pharmaceutical companies to relocate production to the U.S. [1] Market Reaction - Global pharmaceutical stocks, including Pfizer and Merck, experienced declines of over 2% in the U.S. market, while related stocks in A-shares and Hong Kong also fell significantly, impacting companies like Kanglong Chemical and Kylin Pharmaceutical [3] Policy Background - The tariff policy is not sudden; it has been hinted at since April, with escalating threats of high tariffs on imported drugs. Economists warn that such high tariffs could disrupt supply chains and potentially increase drug prices for U.S. consumers [4] Impact on Chinese Pharmaceutical Companies - Chinese innovative pharmaceutical companies face both challenges and opportunities. Short-term market volatility is expected, but the established global competitiveness of Chinese firms may allow them to adapt by accelerating overseas production to avoid tariffs [5] Industry Outlook - The fundamental drivers of innovative drug development remain unchanged despite national policies. China's pharmaceutical industry is transitioning from a "big pharmaceutical country" to an "innovative pharmaceutical powerhouse," with significant advancements in cutting-edge fields like stem cell and gene therapy [6]

第一财经记者从默克集团获悉，自2026年5月1日起，默克集团现任电子业务CEO毕康明（Kai Beckman）将接任葛丽鹤（Belén Garijo）担任集团执行董事会主席兼首席执行官。葛丽鹤将按计划在 2026年4月底完成任期，以确保管理层平稳过渡。她已在默克任职15年，其中6年担任医疗健康业务 CEO。 自明年5月1日起，默克集团现任电子业务CEO毕康明将担任集团执行董事会主席兼首席执行官。 ...

Core Insights - Evaxion has achieved a significant milestone by having MSD (Merck) exercise its option to license the EVX-B3 vaccine candidate, marking the first instance of a pharmaceutical company in-licensing a vaccine candidate discovered using AI [3] Company Updates - The licensing of EVX-B3 is a notable achievement for Evaxion and highlights the potential of AI-driven drug development in the pharmaceutical industry [3] - MSD also holds an option on another vaccine candidate, EVX-B2, with an extended evaluation period and a decision on potential in-licensing expected in the first half of 2026 [4]

At Friedrich Global Research we are searching for what we believe will be the safest and best performing companies in which to buy stocks. We focus on free cash flow, efficient capital allocation, and consistently superior results to identify the highest quality management teams.Founder of Bern Factor LLC, an independent research and publishing firm located in Virginia. I have nearly 40 years of investing and analysis experience. I am a former CPA (1990 -2017) and became a CFA charter holder in 2000. I cons ...