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Merck is preparing for the impending loss of exclusivity of its leading drug, Keytruda, a PD-L1 inhibitor that accounts for approximately 50% of the company’s pharmaceutical sales. Keytruda is set to lose its exclusivity in 2028, prompting Merck to explore innovative strategies, such as combination therapies and a new subcutaneous formulation currently under FDA review, with a decision expected in September 2025.
Additionally, Merck has launched a new pulmonary arterial hypertension (PAH) drug, Winrevair, which received FDA approval in March 2024 and generated $280 million in sales during the first quarter of 2025. Merck is looking to leverage Winrevair’s potential as a significant revenue generator to offset the anticipated challenges following Keytruda’s patent expiration.
Year to date, Merck’s shares have decreased by 17.1%, contrasting with a 0.6% decrease in the industry. The Zacks Consensus Estimate for 2025 earnings has slightly declined from $8.94 to $8.91 per share. Comparatively, Merck’s shares are trading at a price/earnings ratio of 8.84, lower than the industry average of 15.05.
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