Key Takeaways Keytruda drove over half of Merck's pharma revenues in the first nine months of 2025.Keytruda sales rose 8% year over year in the third quarter but were weaker than expected.FDA nod to Keytruda Qlex extends patent protection beyond 2028 and aids potential long-term growth.Merck’s (MRK) strong position in the oncology market is largely driven by its biggest revenue driver, Keytruda. The blockbuster PD-L1 inhibitor contributes over half of the company’s pharmaceutical revenues.Keytruda, approved ...

Core Insights - Merck's shares have increased nearly 13% recently due to positive sentiment in the pharmaceutical sector following Pfizer's drug pricing deal with the Trump administration [1][4]. Drug Pricing and Market Impact - Pfizer will reduce prices of certain drugs to match those in comparable developed countries, supporting the Most Favored Nation pricing proposal [2]. - Pfizer will receive a three-year exemption from tariffs on pharmaceutical imports in exchange for increasing U.S. manufacturing investment, committing an additional $70 billion [3]. Merck's Strengths - Keytruda, Merck's leading drug, accounts for over 50% of its pharmaceutical sales and has driven steady revenue growth, with sales rising approximately 7% in the first half of 2025 [6][7]. - Merck is pursuing strategies to enhance Keytruda's long-term growth, including innovative combinations and a partnership with Moderna for a personalized mRNA cancer vaccine [8]. Pipeline and M&A Activity - 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 [10][11]. - The acquisition of Verona Pharma for approximately $10 billion will strengthen Merck's cardio-pulmonary pipeline [15]. Challenges and Sales Performance - Sales of the Gardasil vaccine have declined by 48% in the first half of 2025, primarily due to weak demand in China [16][17]. - Other vaccines and diabetes products are also experiencing declining sales, contributing to a challenging near-term outlook for Merck [18][32]. Patent Expiration and Competitive Pressure - Keytruda is set to lose patent exclusivity in 2028, raising concerns about Merck's reliance on this drug and its ability to grow its non-oncology business [19]. - Competitive pressure is expected to increase from new dual PD-1/VEGF inhibitors, which may challenge Keytruda's market position [20][21]. Valuation and Earnings Estimates - Merck's shares have underperformed the industry and the S&P 500, with a current price/earnings ratio of 9.41, lower than the industry average of 15.96 [22][25]. - Earnings estimates for 2025 have remained stable at $8.93 per share, while 2026 estimates have slightly declined [28]. Strategic Outlook - Despite challenges, Merck's new products are showing strong launches, and the approval of Keytruda Qlex may mitigate the impact of Keytruda's loss of exclusivity [30]. - A wait-and-see approach is recommended for investors, as the company navigates its current challenges and seeks sustainable growth [32].

Group 1 - Halozyme Therapeutics, Inc. (NASDAQ:HALO) is considered one of the best biotech stocks to buy, with Benchmark maintaining a Buy rating and increasing the price target from $75 to $90 due to favorable financial forecasts and solid earnings results for the first half of 2025 [1][2] - Benchmark's revised price target is based on the expectation that Halozyme's projected 2025 revenues will be 8.5 times higher, highlighting the company's growth potential [2] - The FDA recently approved Merck's Keytruda Qlex, which utilizes an enzyme licensed from Alteogen that competes with Halozyme's Enhanze enzyme, leading to ongoing patent disputes between the two companies [2][3] Group 2 - Halozyme Therapeutics operates as a biopharmaceutical technology platform company, focusing on creating, manufacturing, and selling drug-device combination solutions using advanced auto-injector technologies [3]

In this article, we will be taking a look at the 10 Best Pharma Stocks to Buy According to Billionaires. Merck & Co., Inc. is placed fourth among them. Merck & Co., Inc. (NYSE:MRK), a global biopharmaceutical company founded in 1891 and headquartered in Rahway, New Jersey, continues to strengthen its leadership in oncology and vaccines. This month, the FDA approved Keytruda Qlex, a subcutaneous version of the drug that can be administered in just one to two minutes, compared to the 30-minute intravenous ...