Merck Rally Faces Question of Whether Post-Keytruda Growth Is Priced In
Merck shares have risen about 40% this year as investors grow more confident in its pipeline ahead of Keytruda’s U.S. patent expiration in 2028. Keytruda brought in $16.4 billion in first-half 2026 sales, and recent developments include a subcutaneous version approved in Japan and an FDA-approved oral cholesterol pill. Analysts expect revenue to climb from $65 billion in 2025 to roughly $75 billion by 2028.
Merck shares have climbed about 40% this year, with a 52-week range of $78-$157 and market value near $367B. Keytruda brought in $16.4B in first-half 2026 sales, up roughly 4%, and is approved for about 40 cancers. Japan cleared subcutaneous Keytruda Qlex on Sept. 21; a European panel backed Keytruda plus Padcev for bladder cancer on Sept. 18. Lipfendra, an oral PCSK9 cholesterol pill, won FDA approval in July.
Analysts project revenue rising from $65B in 2025 to about $75B by 2028, then near $76B through 2030. Free cash flow could reach roughly $19B in 2026 and peak near $26B in 2028. Merck raised sales guidance but cut EPS guidance due to $14.7B one-time charges.
Merck’s pipeline progress and Keytruda’s eventual patent expiry could affect patients, investors, and health systems. New formulations and an oral cholesterol treatment may broaden access or convenience, while competition and pricing pressures may influence affordability. For shareholders, the rally means expectations are high; any pipeline setback could hit portfolios and retirement funds. The company’s ability to replace Keytruda revenue may shape research priorities and treatment options, though outcomes remain uncertain.