Core Viewpoint - Merck's decision to exchange part of its future sales rights for the antibody-drug conjugate sac-TMT for $700 million in R&D funding from Blackstone reflects the pressures of patent expirations and high R&D costs faced by major pharmaceutical companies, despite having over $8 billion in cash [2][3][4]. Financial Performance - In the first three quarters of this year, Merck reported total revenue of $48.611 billion, which is roughly flat compared to the same period last year [3]. - Keytruda, Merck's leading product, generated sales of $23.303 billion, showing an 8% year-over-year growth, but its growth rate is slowing [4]. - The sales of the HPV vaccine Gardasil/Gardasil 9 fell by 40% year-over-year, totaling $4.202 billion in the first three quarters [5]. Strategic Moves - Merck's agreement with Blackstone involves a non-refundable payment of $700 million to fund sac-TMT's development until the end of 2026, with Blackstone entitled to a low to mid-single-digit royalty on net sales after regulatory approval [3][4]. - Merck plans to cut $3 billion in annual spending by the end of 2027, reallocating these savings to support new product launches and R&D investments [6]. Pipeline and Future Outlook - Sac-TMT, developed by Chinese company Kelun-Botai, is a key asset for Merck, with ongoing Phase III clinical trials across multiple indications, indicating Merck's confidence in the drug [7][9]. - The global pharmaceutical industry is facing significant patent cliff risks from 2023 to 2028, prompting companies like Merck to strategically manage resources and investments [6].