Merck creates separate oncology arm ahead of Keytruda patent loss - Invezz# Merck creates separate oncology arm ahead of Keytruda patent loss[Health & pharma]Author[Vatsala Gaur]Feb 23, 2026, 14:11 PM- Company banks on pipeline growth and recent acquisitions to offset pressure.- Leadership changes aim to prepare for Keytruda's 2028 patent expiry.- Merck splits its human-health business into oncology and specialty divisions.Merck said on Monday that it will split its human-health operations into two separate ...

Merck & Co., Inc. (NYSE:MRK) is included among the 16 Best Dividend Stocks with Rising Payouts. Deutsche Bank Upgrades Merck (MRK) to Buy, Sees “Clear Path” Beyond Keytruda Patent Cliff On February 13, Deutsche Bank analyst James Shin upgraded Merck & Co., Inc. (NYSE:MRK) to Buy from Hold. The analyst raised his price target on the stock to $150 from $115. In a research note, he said the market appears to be undervaluing the company because of concerns around Keytruda’s upcoming patent expiration. His an ...

Core Viewpoint - Merck & Co., Inc. (NYSE:MRK) has received a price target increase from Scotiabank, reflecting strong execution despite a cautious outlook for 2026 due to potential revenue pressures from product exclusivity losses [2][3]. Group 1: Financial Performance - Merck reported a strong fourth quarter, exceeding revenue and earnings expectations, primarily driven by demand for its cancer immunotherapy Keytruda [4]. - The company anticipates 2026 revenue to be between $65.5 billion and $67.0 billion, which is below the consensus estimate of $67.6 billion [4]. - Merck expects approximately $2.5 billion in revenue pressure this year due to factors such as increased generic competition, Medicare price negotiations, and declining sales of its COVID-19 treatment, Lagevrio [4]. Group 2: Product Outlook - Management indicated that several drugs, including Januvia and related therapies, may underperform expectations, impacting near-term results [5]. - The company is focusing on longer-term growth drivers across its broader portfolio, despite short-term challenges [5]. Group 3: Company Overview - Merck & Co., Inc. is a global healthcare company that specializes in prescription medicines, including biologic therapies, vaccines, and animal health products, with a strong emphasis on human health drugs and vaccines [6].

Core Insights - Merck's financial performance for 2025 shows steady growth driven by Keytruda, new products like Winrevair and Capvaxive, and stable animal health business, with total sales reaching $65 billion, a 1% year-over-year increase [1] - The company projects 2026 sales between $65.5 billion and $67 billion, with adjusted EPS expected to be between $5.00 and $5.15, both below Wall Street expectations [1][6] - A significant one-time expense from the acquisition of Cidara Therapeutics is expected to impact 2026 adjusted EPS, which includes approximately $3.65 per share related to this acquisition [1][6] Financial Performance - For Q4 2025, sales were $16.4 billion, a 4% increase from Q4 2024, while total sales for the year were $65.011 billion, up 1% [2] - Non-GAAP EPS for 2025 was $8.98, reflecting a 17% increase year-over-year, while GAAP EPS was $7.28, an 8% increase [2] Product Performance - Gardasil sales faced significant challenges, with Q4 sales at $1.031 billion, a 35% decline year-over-year, and annual sales down 39% to $5.233 billion [3] - Keytruda sales reached $8.4 billion in Q4, a 7% increase, with annual sales surpassing $30 billion for the first time, totaling $31.68 billion [4] - New products like Winrevair and Capvaxive showed strong performance, with Winrevair achieving $1.443 billion in annual sales, and Capvaxive reaching $759 million [5] Strategic Outlook - Merck is focusing on product portfolio transformation to mitigate the impact of patent expirations and competition, with strategic acquisitions being a key part of this strategy [5] - The company has identified potential acquisition opportunities valued in the billions to drive future growth [4] 2026 Guidance - The 2026 guidance includes significant one-time costs from the Cidara acquisition, with adjusted EPS expected to be impacted by these costs [6][7] - The company anticipates a gross margin of approximately 82% for 2026, with adjusted operating expenses projected between $35.9 billion and $36.9 billion [7]

Core Viewpoint - Merck & Co has projected 2026 sales and profits to be below Wall Street estimates due to the anticipated impact of losing patent exclusivity on its diabetes drug Januvia and other medications, which is expected to be more significant than analysts had previously estimated [1] Group 1 - The loss of patent exclusivity on Januvia is a major factor contributing to the forecasted decline in sales and profits [1] - Analysts had previously underestimated the impact of patent expirations on Merck's financial performance [1] - The company is facing challenges from increased competition in the diabetes medication market following the expiration of patents [1]

Core Viewpoint - Merck reported strong fourth-quarter earnings driven by demand for its cancer immunotherapy Keytruda, but provided a modest 2026 outlook that fell short of Wall Street expectations due to upcoming patent expirations and generic competition [1][2]. Financial Performance - For the fourth quarter, Merck posted net income of $2.96 billion, or $1.19 per share, compared to $3.74 billion, or $1.48 per share, in the same period last year [4]. - Adjusted earnings for the fourth quarter were $2.04 per share, slightly above the expected $2.01 per share [6]. - Revenue for the quarter was $16.4 billion, a 5% increase from the previous year, and exceeded expectations of $16.19 billion [5][6]. 2026 Outlook - Merck anticipates 2026 revenue between $65.5 billion and $67 billion, lower than analysts' expectations of $67.6 billion [2]. - The company expects adjusted earnings per share to be between $5 and $5.15, compared to the analyst estimate of $5.36 [2]. Acquisition and Charges - The 2026 guidance includes a one-time charge of approximately $9 billion, or around $3.65 per share, related to the acquisition of Cidara, which is developing a flu prevention drug [3]. Cost Management - Merck is implementing a cost-cutting plan aimed at reducing expenses by $3 billion by the end of 2027 to offset revenue losses from the upcoming patent expiration of Keytruda in 2028 [5]. Drug Pricing Deal - Under a "most favored nation" deal, Merck will sell existing treatments to Medicaid patients at the lowest price offered in other developed nations and will receive a three-year reprieve from tariffs [4].

Core Insights - The pharmaceutical industry is expected to face increased pressure in the U.S. vaccine sector by 2026, while commercial insurance opens new pathways for drug companies entering the Chinese market [3][9]. Group 1: U.S. Pharmaceutical Pricing and Investment - Concerns regarding U.S. drug pricing reforms have diminished as many pharmaceutical companies commit to significant investments in the U.S. and sign pricing agreements with the government [4]. - Major companies have pledged substantial investments, including Pfizer and Merck at $70 billion each, and Roche at $50 billion, among others, to enhance manufacturing capacity in the U.S. [5]. - The U.S. government has implemented a maximum fair price for certain drugs, with notable price reductions observed in negotiations, such as Merck's Januvia priced at $113 and similar drugs at $80 and $78 [6]. Group 2: Chinese Pharmaceutical Market Dynamics - The 2025 National Medical Insurance Drug List will add 114 new drugs, with expected price reductions of 40%-50% for those included, reflecting a more mature negotiation mechanism [9][11]. - The introduction of a commercial insurance innovation drug list provides an alternative route for international pharmaceutical companies to launch innovative drugs in China, with 19 drugs included, such as CAR-T therapies [11][13]. - The commercial insurance pathway may allow companies to introduce higher-priced drugs if they are unable to meet the 60% price reduction typically required for inclusion in the national insurance list [11].

Group 1: Market Volatility and Reactions - The year 2025 has been marked by significant market volatility, heavily influenced by presidential announcements, particularly from Donald Trump, leading to rapid fluctuations in market values [1] - Following the announcement of a 10% universal tariff on all US imports, the S&P 500 dropped over 10%, erasing approximately $5 trillion from global markets [5] - A subsequent 90-day pause on new reciprocal tariffs resulted in a market rebound, with the S&P 500 surging 9.52% [5][6] Group 2: Trump Media & Technology Group (DJT) - Trump Media & Technology Group (DJT) saw its stock surge 13.03% after announcing a merger with TAE Technologies, a nuclear fusion company, indicating a pivot from social media to energy [3] - DJT stock closed at $16.80 before the merger announcement, marking a significant rise, and trading volume reached 99.5 million shares, 1,265% above its three-month average [3] - Despite the recent surge, DJT stock remains down 58% over the past year, highlighting ongoing volatility [3] Group 3: Pharmaceutical Industry Developments - Trump announced new drug pricing deals with nine major pharmaceutical companies, including Merck and Pfizer, aimed at lowering Medicaid drug prices [7] - Merck committed to approximately 70% discounts on diabetes treatments, while Pfizer agreed to significant price cuts and a $70 billion investment in U.S. research [8] - These deals included a three-year exemption from Section 232 tariffs for the pharmaceutical companies, creating a win-win scenario for both the industry and consumers [8] Group 4: Nvidia and Geopolitical Dynamics - The U.S. government approved the export of Nvidia's H200 chips to select Chinese customers, with a 25% revenue cut going to the government, reflecting complex geopolitical dynamics [9][10] - Nvidia's stock saw a positive reaction, closing at $176.29 and rising to $183.40 following the announcement, despite ongoing investor caution regarding China exposure [10] Group 5: Economic Overview - Despite stock market gains of 13% to 20% year-to-date, public sentiment regarding the economy remains low, with 70% of Americans describing it as "poor" [11] - Trump's approval rating on economic performance has dropped to between 31-39%, indicating a disconnect between market performance and public perception [11] - The Federal Open Market Committee has been cutting interest rates to stimulate the economy, reflecting concerns about rising prices and unemployment [12]

Core Points - President Trump and nine major pharmaceutical companies have reached agreements to reduce medication costs for cash payers and the Medicaid program, aligning U.S. prices with those of other wealthy nations [1][2] - Drugmakers will implement most-favored-nation pricing for Medicaid drugs, ensuring prices match the lowest available globally [2][4] - A new government website, TrumpRx.gov, will facilitate the purchase of discounted prescription drugs directly from manufacturers [3] Agreement Details - Companies involved include Bristol Myers Squibb, Gilead Sciences, Merck, Genentech, Novartis, Amgen, Boehringer Ingelheim, Sanofi, and GSK [2] - Drugmakers will list their products on TrumpRx.gov, which offers significant discounts for cash payers and mandates that new drugs be priced no higher than in other wealthy countries [3] - In exchange for these commitments, companies will receive three-year tariff exemptions previously imposed on foreign-made drugs [4] Specific Drug Pricing - Merck will sell its diabetes drugs, Januvia and Janumet, at a 70% discount to consumers, while Bristol Myers Squibb will provide its blood thinner, Eliquis, free to Medicaid starting January 1, 2026, and offer selected medicines at approximately 80% off list prices for cash-paying patients [5] Investment Commitments - The pharmaceutical companies have pledged over $150 billion in U.S. research and development and manufacturing investments, with Merck committing more than $70 billion to enhance domestic production and innovation [6] - Five companies have already established agreements with the administration, with three more expected to announce deals soon [6] Program Evaluation - Mark Cuban, a billionaire entrepreneur, rated TrumpRx.gov with a "B" grade, indicating potential but suggesting it needs to compel pharmacy benefit managers to alter their practices for a higher rating [7]

Core Insights - President Trump announced a set of drug-pricing agreements with nine major pharmaceutical companies, aiming to align U.S. medicine costs with those in Europe [1][2] - The initiative includes a new direct-to-consumer portal, TrumpRx.gov, allowing patients to purchase certain medicines directly from manufacturers [2][4] Group 1: Agreements and Participants - The agreements involve 14 out of 17 drugmakers that Trump previously urged to lower prices, including Amgen, GSK, and Merck [2][3] - Drug companies are motivated to negotiate to avoid potential regulatory measures that could impact their profits [3] Group 2: TrumpRx.gov Functionality - TrumpRx.gov will serve as a central directory for patients to access selected medicines directly from manufacturers' websites [4] - The portal is expected to be fully operational by January, following a promotional launch [4] Group 3: Pricing Details - Highlighted medicines include Amgen's Repatha at $239/month, GSK's Advair Diskus at $89/month, and Merck's Januvia at $100/month [6] - Gilead's Epclusa will be priced at $2,492/month, despite lower costs for insured patients [6] Group 4: Impact on Medicaid and Medicare - Companies committed to launching new medicines in the U.S. at prices comparable to those in other wealthy countries [8] - Medicaid programs are legally entitled to the lowest drug prices, with Bristol Myers Squibb offering Eliquis free to Medicaid [9] Group 5: Industry Response and Future Outlook - Health policy experts express skepticism about the agreements' impact on overall drug prices for most Americans [10] - The agreements do not impose mandatory price controls and leave many brand-name drug costs unchanged [15] - Ongoing discussions with additional manufacturers like AbbVie and Johnson & Johnson may lead to further agreements [14]