ZACKSยท2025-04-15 11:55Core Insights - Merck and AbbVie are leading pharmaceutical companies with strong portfolios in oncology and immunology, respectively [2][4] - Both companies are experiencing consistent sales and earnings growth, supported by robust pipelines with promising late-stage candidates [4] Merck Overview - Oncology accounts for approximately 50% of Merck's total revenues, with the PD-L1 inhibitor Keytruda alone contributing around 50% of its pharmaceutical sales [3] - Merck has over six blockbuster drugs, with Keytruda being the primary revenue driver, particularly in early-stage non-small cell lung cancer [9] - The company has made significant regulatory and clinical progress in 2024, alongside strategic acquisitions [10] - However, Merck faces challenges such as declining sales of Gardasil due to weak performance in China and concerns about its dependence on Keytruda [11][12] AbbVie Overview - AbbVie's largest segment is immunology, which also accounts for around 50% of its total revenues, driven by key drugs like Humira, Skyrizi, and Rinvoq [3] - AbbVie has successfully managed the loss of exclusivity for Humira by launching new immunology medicines that are performing well [5] - The company has a strong pipeline with several early/mid-stage candidates and plans for regulatory submissions and approvals in the next 12 months [6] - AbbVie faces near-term headwinds, including biosimilar erosion of Humira and competitive pressures on its cancer drug Imbruvica [7][8] Financial Comparisons - As of December 31, 2024, AbbVie had $60.3 billion in long-term debt and a debt-to-capital ratio of 0.95, significantly higher than the industry average of 0.41 [8] - Merck exited 2024 with cash and cash equivalents of $13.7 billion and a debt-to-capital ratio of 0.42, slightly above the industry average [12] - The Zacks Consensus Estimate for AbbVie's 2025 sales and EPS implies year-over-year increases of 5.7% and 21.4%, respectively [13] Investment Outlook - AbbVie is positioned for continued strong growth, expecting mid-single-digit revenue growth in 2025 and a high single-digit CAGR through 2029 [17] - In contrast, Merck faces the upcoming loss of exclusivity for Keytruda in 2028, raising concerns about its ability to sustain growth [17] - Despite a steeper valuation, AbbVie is viewed as a more favorable investment due to rising estimates and a solid growth outlook [18]