Core Viewpoint - The pharmaceutical giants Pfizer and Merck have underperformed in 2023, facing financial challenges and upcoming patent cliffs, leading to uncertainty in their medium-term outlooks. The article compares both companies to determine which presents a better investment opportunity heading into the new year. Pfizer - Pfizer's Eliquis, a leading blood thinner, is approaching patent expiration, which could exacerbate its already slow revenue and earnings growth [3] - The company has expanded its pipeline through internal efforts, acquisitions, and licensing deals, launching new products that are expected to impact financial results positively in the future [4] - Notable pipeline candidates include MET-097i, a promising weight loss drug with fewer side effects and a long-acting dosing schedule, and PF-4404, a cancer therapy that could become a standard treatment for certain cancers [5][7] - Pfizer is also implementing cost-cutting measures and has secured a deal with the White House to be exempt from tariffs for three years, which may help improve its margins and bottom line [8] Merck - Merck's sales from its HPV vaccines, Gardasil and Gardasil 9, have declined due to lower sales in China, and its best-selling cancer drug Keytruda faces a patent cliff by 2028 [9] - The company has introduced a new subcutaneous version of Keytruda, which offers a more convenient administration method and is expected to mitigate sales losses from biosimilars [10] - Merck's pipeline includes successful products like Winrevair for pulmonary arterial hypertension and Capvaxive, a pneumonia vaccine, both of which are expected to generate significant revenue [12][13] - An acquisition that adds CD388 to its pipeline could potentially transform the influenza vaccine market, indicating strong future prospects for Merck [13] Investment Comparison - Both Pfizer and Merck are considered viable long-term investment options, but Merck is viewed as the stronger choice due to better financial results and a more developed plan to address challenges [14][16] - Merck's higher profit margins and faster dividend growth over the past decade make it more attractive for dividend-seeking investors, despite Pfizer's higher forward dividend yield [17]

Key Takeaways MRK faces major headwinds as Keytruda, its top revenue driver, nears the loss of exclusivity in 2028.Declining Gardasil sales due to weak China demand and lower vaccine uptake in Japan ail MRK.MRK is counting on Capvaxive, Winrevair and strategic cost savings to help counter patent/pricing headwinds.Merck (MRK) is expected to face some notable headwinds over the next few years that could affect its long-term growth outlook, the most significant being the upcoming loss of exclusivity (“LOE”) fo ...

Merck & Co., Inc. (NYSE:MRK) is included among the 12 Best Dogs of the Dow to Invest in. BofA Turns More Positive on Merck (MRK) Pipeline Photo by Dan Dennis on Unsplash On December 15, BofA raised its price target on Merck & Co., Inc. (NYSE:MRK) to $120 from $105 and kept a Buy rating. The analyst said the stock is starting to look more appealing as the pipeline has “rounded out,” and noted that the firm is now basing its valuation on a new FY27 EPS estimate. That optimism comes against a mixed backd ...

Core Viewpoint - Merck is strategically focusing on long-term growth through new product launches and a robust pipeline as its leading drug, Keytruda, is set to lose patent protection in 2028 [1][2]. Pipeline and Product Development - Keytruda, which accounts for over 50% of Merck's pharmaceutical sales, generated $23.3 billion in sales during the first nine months of 2025, reflecting an 8% year-over-year increase [2]. - The company's phase III pipeline has nearly tripled since 2021, with plans to launch around 20 new vaccines and drugs in the coming years, many of which have blockbuster potential [3][11]. - Notable new products include the 21-valent pneumococcal conjugate vaccine, Capvaxive, and the pulmonary arterial hypertension drug, Winrevair, both of which are expected to significantly contribute to revenue post-Keytruda exclusivity [4][11]. Strategic Mergers and Acquisitions - Merck has engaged in substantial M&A activities, including a recent agreement to acquire Cidara Therapeutics for $9.2 billion, which will enhance its portfolio with CD388 for seasonal influenza prevention [7][8]. - Earlier this year, Merck acquired Verona Pharma for $10 billion, adding Ohtuvayre, a novel treatment for chronic obstructive pulmonary disease [8]. Competitive Landscape - Keytruda faces competition from other PD-L1 inhibitors such as Bristol Myers' Opdivo, Roche's Tecentriq, and AstraZeneca's Imfinzi, which are also approved for multiple cancer types [10][12][13]. Financial Performance and Valuation - Year-to-date, Merck's shares have decreased by 0.4%, underperforming the industry average of 13.6% [14]. - The company's price/earnings ratio stands at 11.22, which is lower than the industry average of 16.59 and its 5-year mean of 12.51, indicating a potentially attractive valuation [15]. - The Zacks Consensus Estimate for 2025 earnings per share has slightly increased from $8.94 to $8.98, while the estimate for 2026 has decreased from $9.46 to $8.81 [18].

Core Insights - Merck's stock has shown sustained bullish momentum, trading above its 50-day and 200-day simple moving averages since early November [2][8] - The company announced a $9.2 billion acquisition of Cidara Therapeutics, which will enhance its antiviral pipeline [4] - Keytruda remains a significant revenue driver, accounting for over 50% of pharmaceutical sales, with sales reaching $23.3 billion in the first nine months of 2025, an 8% year-over-year increase [6][31] Pipeline and Strategic Developments - Merck's phase III pipeline has nearly tripled since 2021, positioning the company to launch around 20 new vaccines and drugs in the coming years [12] - The acquisition of Verona for $10 billion added Ohtuvayre, a novel treatment for chronic obstructive pulmonary disease, which has multibillion-dollar commercial potential [15] - Merck is also developing a personalized mRNA therapeutic cancer vaccine in collaboration with Moderna, which is currently in pivotal phase III studies [9] Challenges and Concerns - Sales of the Gardasil vaccine have declined by 40% in the first nine months of 2025, primarily due to weak demand in China [16] - Keytruda is set to lose exclusivity in 2028, raising concerns about Merck's reliance on this drug and its ability to diversify its product lineup [19][20] - Competitive pressures are increasing, particularly from dual PD-1/VEGF inhibitors that may challenge Keytruda's market position [20][21] Financial Performance and Valuation - Merck's shares have underperformed the industry and the S&P 500, losing 0.5% year-to-date compared to a 14.1% increase for the industry [22] - The company's price/earnings ratio stands at 11.21, lower than the industry average of 16.68, indicating potential attractiveness from a valuation perspective [26] - Earnings estimates for 2025 have slightly increased, while those for 2026 have declined, reflecting mixed market sentiment [29]

Core Viewpoint - Merck has experienced a recent stock rebound of 20% due to positive developments, including encouraging clinical data and successful acquisitions [1][8]. Group 1: Recent Developments - Merck's stock increased by nearly 4% following positive clinical data [1]. - The company has made significant progress with its acquisition of Acceleron Pharmaceuticals for $11.5 billion, which included the key asset sotatercept, now marketed as Winrevair [5][12]. - Winrevair generated sales of $360 million in the third quarter, indicating strong commercial progress and potential for blockbuster status [6]. Group 2: Clinical Trials and Approvals - Winrevair has met its primary endpoint in a phase 2 study for a rare type of pulmonary hypertension, which could address an unmet medical need [6][7]. - Merck has also reported positive phase 2/3 results for raludotatug deruxtecan, a drug for ovarian cancer, and received Breakthrough Therapy Designation from the FDA for this treatment [8][9]. - The company is awaiting approval for a new combination treatment for HIV and has acquired Cidara Therapeutics, which is developing a promising influenza candidate [10]. Group 3: Future Outlook - Merck is preparing for the loss of U.S. patent exclusivity for Keytruda in 2028, which generated $29.5 billion in sales last year, accounting for about 46% of total revenue [11]. - The company has received approvals for Winrevair and Capvaxive, a pneumonia vaccine, and has a pipeline of mid- and late-stage assets that could lead to new medicines [12]. - A newer subcutaneous formulation of Keytruda is expected to retain patent exclusivity longer, supporting the company's long-term prospects [13]. Group 4: Investment Considerations - Merck's strong underlying business, innovative capabilities, and solid dividend program make the stock attractive for long-term investors, particularly those focused on dividends [14].

Core Viewpoint - Ligand Pharmaceuticals is hosting its Investor Day to present its strategy, investment activities, royalty portfolio, and long-term financial outlook, highlighting a strong business outlook and advancements in its royalty portfolio [1][2]. Financial Overview and Outlook - Ligand reiterates its 2025 guidance and introduces its 2026 guidance, projecting full-year revenue of $245 million to $285 million, which represents an approximately 15% increase in core revenue growth over 2025 [3]. - The company expects royalty revenue to be between $200 million and $225 million, indicating a 40% increase over 2025, with core adjusted earnings per diluted share projected at $8.00 to $9.00 [3]. - A five-year outlook anticipates a compound annual growth rate (CAGR) of at least 23% for royalty receipts, driven by products like Filspari, Ohtuvayre, and Zelsuvmi [3][4]. Key Financial Performance - In 2025, Ligand's financial performance is expected to show a 40% increase in royalty revenue and a 30% increase in core adjusted earnings per share [4]. - Total core revenue is projected to be between $225 million and $235 million, with royalty revenue contributing $147 million to $157 million, alongside $40 million in Captisol sales and $38 million in core contract revenue [4]. Investment Activity - The company committed $130 million across six investments in 2025, with a robust pipeline heading into 2026 [4]. - Ligand has $1 billion in deployable capital aimed at driving long-term royalty revenue growth through disciplined allocation [4]. Royalty Revenue Drivers - Key drivers for royalty revenue in 2026 include Filspari (Travere Therapeutics), Ohtuvayre (Merck), Capvaxive (Merck), Qarziba (Recordati S.p.A.), and Zelsuvmi (Pelthos Therapeutics) [4]. Business Model and Technology Platforms - Ligand operates a business model focused on generating value through a diversified portfolio of biotech and pharmaceutical product revenue streams, supported by an efficient corporate cost structure [7]. - The company utilizes royalty-generating technology platforms, including Captisol® and NITRICIL™, which are designed to optimize drug solubility and stability, and facilitate tunable dosing, respectively [7].

Core Viewpoint - Merck is showing signs of recovery with a 27% stock increase over the past month, driven by strategic acquisitions and new product launches [1]. Company Developments - Merck has acquired Cidara Therapeutics for approximately $9.2 billion, focusing on the development of CD388, a long-acting antiviral drug that could provide extended protection against influenza [4][5]. - The company is also launching Winrevair, which generated $360 million in sales in the third quarter, indicating a strong annual run rate of over $1 billion [8]. - Another product, Capvaxive, a pneumonia vaccine, is performing well with $244 million in sales in the third quarter, nearing the $1 billion annual run-rate mark [9]. - Merck has received approval for a subcutaneous formulation of Keytruda, which will maintain patent protection for a longer period and offers advantages in administration [10]. Market Performance - Merck's third-quarter revenue increased by 4% year over year to $17.3 billion, although concerns remain about future sales due to increasing competition for Keytruda [11]. - The company has a market capitalization of $250 billion, with a current stock price of $99.83 and a dividend yield of 3.21% [8][13]. - Merck has increased its dividend payouts by 93.8% over the past decade, positioning itself as a strong blue-chip dividend stock [13].

Core Insights - Merck is approaching a significant patent cliff with its leading PD-L1 therapy Keytruda, which is set to lose exclusivity in 2028, accounting for over 50% of the company's pharmaceutical sales and generating $23.3 billion in sales during the first nine months of 2025, an 8% increase year over year [1][9] Product Developments - The FDA approved a subcutaneous formulation of Keytruda, known as Keytruda Qlex, in September 2025, which has its own patents extending beyond 2028, potentially mitigating the impact of Keytruda's loss of exclusivity [2] - Merck is diversifying its portfolio with new products like the 21-valent pneumococcal conjugate vaccine Capvaxive and the pulmonary arterial hypertension (PAH) drug Winrevair, both of which have shown strong sales performance [3][4] - Capvaxive generated $480 million in sales in the first nine months of 2025, while Winrevair achieved $976 million in the same period, with management optimistic about their long-term revenue potential [4][5] Competitive Landscape - The PAH market remains highly competitive, with significant players like United Therapeutics and Johnson & Johnson posing challenges for Winrevair [8][10] - Merck's new RSV antibody Enflonsia faces competition from AstraZeneca/Sanofi's Beyfortus and several approved vaccines for RSV prevention [11] Financial Performance - Year-to-date, Merck's shares have increased by 2.9%, underperforming the industry average of 15.6% [12] - Merck's price/earnings ratio stands at 11.59, which is lower than the industry average of 16.91 and its 5-year mean of 12.54, indicating attractive valuation [13] Earnings Estimates - The Zacks Consensus Estimate for 2025 earnings per share has slightly increased from $8.94 to $8.98, while the estimate for 2026 has decreased from $9.55 to $8.81 over the past 60 days [15]

Financial Data and Key Metrics Changes - The company anticipates a greater than $5 billion commercial opportunity starting at the end of the decade and escalating into the early 2030s [10] - The influenza program is expected to provide protection to approximately 110 million people in the U.S., with 85 million being high-risk or immunocompromised individuals [9] Business Line Data and Key Metrics Changes - The launch of Ohtuvayre for COPD treatment has received excellent feedback, and the company sees a significant opportunity to scale this product [17][18] - Winrevair in pulmonary arterial hypertension (PAH) is meeting high expectations, with continuous positive feedback from the medical community [28][29] Market Data and Key Metrics Changes - In the last influenza season, there were 1.6 million hospitalizations due to influenza in the U.S., highlighting the high unmet medical need [10] - The company is seeing strong uptake in the triple segment of the PAH population, with plans to penetrate further into the dual category [32] Company Strategy and Development Direction - The company is focusing on the commercialization of CD388, an antiviral treatment for influenza that is strain agnostic and effective across various populations [6][8] - The strategy includes leveraging existing commercial capabilities to enhance the launch and market penetration of new products like Ohtuvayre and Winrevair [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the significant unmet need in the influenza market and the potential for CD388 to address this issue effectively [5][6] - The company is optimistic about the future of its respiratory portfolio and the potential for new products to transform patient outcomes [19][20] Other Important Information - The company is preparing for the launch of an oral PCSK9 inhibitor, which is expected to improve access and adherence for patients needing cholesterol management [40][46] - The company is also exploring multiple indications for its TL1A mechanism, which has shown promise in inflammatory and fibrotic diseases [67][68] Q&A Session Summary Question: Insights on the Cidara deal and its growth opportunity - Management highlighted the high unmet medical need for influenza treatment and the strain-agnostic efficacy of CD388, which is expected to be a significant commercial opportunity [5][6] Question: Commercial approach for high-risk patients - The company plans to include both vaccinated and unvaccinated high-risk individuals in the phase 3 program, with payer research indicating a favorable price point for the treatment [12][13] Question: Feedback on Ohtuvayre and its market potential - The feedback from customers has been excellent, and the company believes it can significantly scale the product using its commercial engine [17][18] Question: Future steps for Winrevair in PAH - Management expressed confidence in the product's performance and noted that they are seeing positive feedback and uptake in the market [28][29] Question: Expectations for the oral PCSK9 program - The company anticipates that the oral PCSK9 will provide robust LDL lowering and improve access for patients, potentially changing treatment guidelines [40][46] Question: Update on Gardasil and vaccine portfolio - The company expects modest growth for Gardasil moving forward, with ongoing efforts to drive vaccination rates globally [54][55] Question: TL1A mechanism and future indications - Management is optimistic about the TL1A mechanism's potential across multiple indications, with several phase 2 studies planned [67][68]