Merck’s MRK stock is trading near its 52-week high range for some days now. On Sept. 4, MRK closed at $150.33 versus its 52-week high of $156.92 reached on Aug. 25, leaving it only about 4% below the peak.
Last month, Merck and Moderna MRNA announced positive top-line data from a phase III study, which evaluated their personalized cancer therapy combo as an adjuvant treatment for patients with completely resected stage IIB-IV melanoma. The phase III INTerpath-001 study evaluated Moderna’s investigational mRNA-based individualized neoantigen therapy (“INT”), intismeran autogene, in combination with Merck’s blockbuster PD-L1 inhibitor, Keytruda. The study met its primary endpoint of recurrence-free survival (“RFS”) and key secondary endpoint of distant metastasis-free survival (“DMFS”).
In addition to this positive development, Merck’s improving fundamentals and increasing confidence in its post-Keytruda growth strategy helped the stock reach a new 52-week high last month.
Let’s understand the company’s strengths and weaknesses to understand how to play the stock in such a scenario.
Keytruda Powers Merck’s Growth
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda, approved for several types of cancer, alone accounts for more than 55% of the company’s pharmaceutical sales. In the United States, Keytruda is approved for 44 indications spanning 19 tumor types as well as for many of these indications worldwide.
The drug has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Keytruda sales are gaining from continued strong momentum in metastatic indications and rapid uptake across earlier-stage launches. The company expects the growth to continue till it loses patent exclusivity in 2028. More than 2,800 clinical studies are currently evaluating Keytruda across multiple cancer types and treatment settings.
Merck is working on different strategies to drive Keytruda's long-term growth. These include innovative immuno-oncology combinations, including Keytruda with LAG3 and CTLA-4 inhibitors. As discussed previously, in partnership with Moderna, Merck is developing intismeran autogene in combination with Keytruda in nine phase II and phase III studies across melanoma, non-small cell lung cancer, bladder cancer and renal cell carcinoma.
Merck’s subcutaneous formulation of Keytruda, known as Keytruda Qlex, was approved in the United States and EU in 2025 and generated sales of $590 million in the first half of 2026. Keytruda Qlex can offer substantially quicker administration time than the intravenous infusion of Keytruda.
The company expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca AZN-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
Merck’s Animal Health business is also a key contributor to its top-line growth, with sales expected to more than double by the mid-2030s.
MRK’s Pipeline Offers a Path Beyond Keytruda
Merck’s expanding drug pipeline and potential new blockbuster drugs beyond Keytruda look encouraging.
Its phase III pipeline has almost tripled since 2021, supported by in-house progress as well as the addition of candidates through M&A deals. Merck expects to launch 20 new drugs by 2030, with many already launched.
Its new products, pulmonary arterial hypertension drug Winrevair, cancer drug Welireg and 21-valent pneumococcal conjugate vaccine Capvaxive, have begun to contribute significantly to top-line growth.
Some new products approved/launched recently are RSV antibody, Enflonsia (clesrovimab), Idvynso, a once-daily, single-tablet two-drug regimen of doravirine and islatravir, and Lipfendra (enlicitide), an oral PCSK9 inhibitor to help reduce LDL cholesterol in adults with hypercholesterolemia.
Some key candidates in late-stage development are sacituzumab tirumotecan or sac-TMT, an anti-TROP2 antibody-drug conjugate for multiple tumor types, MK-8591D/islatravir plus lenacapavir, a once-weekly oral treatment for HIV, and alimatravir, a monthly oral HIV PrEP candidate.
Merck is actively pursuing acquisitions to prepare for Keytruda’s 2028 patent expiration. Recent deals added Ohtuvayre through Verona Pharma, influenza candidate MK-1406 through Cidara, and potential blockbuster cancer drug MK-4208 through Terns Pharmaceuticals.
Declining Sales of MRK’s Gardasil & Other Vaccines
Merck’s Gardasil/Gardasil 9 franchise is facing a significant slowdown, with sales declining 9% in the first half of 2026 due to weaker demand in China, Japan and the United States. China remains the biggest challenge, as economic weakness has dampened demand and led to elevated channel inventories at partner Zhifei, prompting Merck to temporarily halt shipments.
Although limited shipments resumed in China in the second quarter under a revised agreement, the growing availability of lower-cost domestic HPV vaccines could further put pressure on Gardasil, an imported premium-priced vaccine, with China revenues expected to remain immaterial in 2026. In the United States, demand is also being hurt by changes in vaccination recommendations, including greater use of single-dose schedules.
Sales of some other Merck vaccines, like Proquad, M-M-R II, Varivax, Rotateq and Vaxneuvance, also declined in the first half of 2026.
MRK Faces a Looming Keytruda Patent Cliff
Merck is heavily reliant on Keytruda. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, the company is excessively dependent on the drug. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring slightly after that. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter, Keytruda’s sales are likely to decline sharply.
Also, competitive pressure might increase for Keytruda in the near future from dual PD-1/VEGF inhibitors that inhibit both the PD-1 pathway and the VEGF pathway at once. They are designed to overcome the limitations of single-target therapies like Keytruda.
Generic Headwinds for MRK in 2026
MRK is seeing declining demand for its diabetes products (Januvia/Janumet) and the generic erosion of some drugs like Isentress/Isentress HD and Bridion in the European Union and Dificid in the United States. Bridion lost market exclusivity in the United States in July 2026 and sales are expected to decline further in future quarters. Januvia and Janumet lost market exclusivity in the United States in May 2026 and Janumet XR in July 2026. Sales of Januvia/Janumet are expected to decline steeply in future quarters due to the government price setting in 2026 and 2027, the patent expiry in 2026 and ongoing competitive pressure.
MRK Share Price, Valuation & Estimates
Merck’s shares have risen 42.8% so far this year compared with an increase of 14.5% for the industry. The stock has also outperformed the sector as well as the S&P 500 index, as seen in the chart below.
Merck Stock Outperforms Industry, Sector & S&P 500
From a valuation standpoint, Merck is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 19.85 forward earnings, higher than 18.70 for the industry. The stock is trading above its 5-year mean of 12.90.
MRK Stock Valuation
Estimates for MRK’s 2026 earnings have declined from $4.31 per share to $2.97 per share over the past 60 days, while those for 2027 have declined from $9.85 per share to $9.66 per share.
MRK Estimate Movement
Stay Invested in MRK Stock
Merck has one of the world’s best-selling drugs in its portfolio, generating billions of dollars in revenues. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then.
It expects more than $70 billion of potential non-risk-adjusted commercial opportunity for the current pipeline by the mid-2030s. This estimate is more than double the peak consensus sales estimate for Keytruda of $35 billion in 2028.
Merck faces several near-term challenges, including persistent challenges for Gardasil, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs. Near-term profitability remains affected by costs related to Merck’s various acquisitions. However, these acquisitions eventually benefit the company.
Meanwhile, its new products, strong progress in its pipeline, and business development and acquisitions have increased confidence that Merck may be able to maintain growth even after Keytruda loses exclusivity. Investors can continue to retain this Zacks Rank #3 (Hold) stock as its long-term prospects remain intact. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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