Merck & Co., Inc. (NYSE:MRK) executives outlined a strategy centered on pipeline investment, new product launches and targeted business development as the company prepares for the eventual loss of exclusivity for KEYTRUDA.
Chief Financial Officer Caroline Litchfield said Merck has increased its estimate of non-risk-adjusted revenue potential from its human health product portfolio to more than $70 billion by the mid-2030s, up from an earlier estimate of more than $50 billion. The portfolio spans oncology, cardiometabolic disease, ophthalmology, immunology and HIV, she said.
Oncology pipeline expands beyond lung and breast cancer
Dean Li, head of R&D and president of Merck Research, discussed sac-TMT, a TROP2 antibody-drug conjugate, or ADC, that Merck is advancing across a broad set of tumor types. Li said the company initially emphasized indications beyond breast and lung cancer, noting that 13 of 17 trials were outside those two areas.
Merck’s endometrial cancer program could make sac-TMT the first TROP2 ADC in that setting, according to Li. He said data from Kelun’s Phase III program in China supported Merck’s confidence in pursuing lung cancer more aggressively, while additional breast cancer data could enable comparisons with other therapies.
Li said Merck intends to study sac-TMT broadly across PD-L1-related indications and sees potential combination opportunities with a PD-1/VEGF approach. The company is also exploring PD-1/VEGF combinations with WELIREG, he said.
On individualized neoantigen therapy, or INT, Li said Merck has focused development where KEYTRUDA has already shown activity in earlier-stage disease and across tumors with varying tumor mutation burdens. In melanoma, he said the Phase II data suggested that adding INT to KEYTRUDA “almost double[s]” the number of patients remaining cancer-free compared with KEYTRUDA alone, though he emphasized that investors will look to the Phase III presentation to assess how closely the results align with the earlier study.
Li said renal cell carcinoma data could serve as another important reference point for assessing the potential of INT across other immune-sensitive tumors, including non-small cell lung cancer and head and neck cancer.
KEYTRUDA loss of exclusivity viewed as a “hill”
Litchfield said Merck does not expect a revenue “cliff” during the KEYTRUDA loss-of-exclusivity period. Instead, she said the company expects “more of a hill with a quick return to strong growth” on a risk-adjusted basis.
She said Merck continues to aspire to grow through the KEYTRUDA loss-of-exclusivity period on a non-risk-adjusted basis, but stressed that the company is focused on sustainable long-term growth rather than achieving a specific revenue profile in a single year.
Looking to 2027, Litchfield said Merck expects modest top-line growth, supported by growing contributions from recently launched products. Those gains are expected to be partly offset by generic competition affecting BRIDION, JANUVIA and Adempas, which loses exclusivity at the end of the year.
KEYTRUDA growth is slowing as the product matures, while policy changes in Germany are expected to create pricing pressure next year, she said. Merck Animal Health is expected to continue growing strongly.
Merck expects gross-margin improvement from the expiration of a KEYTRUDA royalty. Expense growth is expected to be in the mid- to high-single-digit range, excluding business-development upfront payments and funding received for sac-TMT. Interest expense is also expected to rise somewhat following debt issuance used for business development.
Ophthalmology, immunology and cardiometabolic opportunities
Li said Merck’s ophthalmology strategy includes MK-3000, a Wnt agonist, and MK-8748, an anti-VEGF Tie2 agonist. Merck is pursuing each independently but sees potential for the pair to give ophthalmologists both a non-VEGF treatment option and what Li described as a potential best-in-class anti-VEGF therapy.
He said an estimated 30% to 40% of patients either do not respond or stop responding to anti-VEGF therapies. Merck hopes MK-3000 can establish a new treatment mechanism, while MK-8748 is being developed with an ambition to show faster retinal drying than existing anti-VEGF options.
In immunology, Li said Merck aims to position its TL1A program as an important treatment “node” alongside TNF, IL-23 and IL-17 approaches. The company’s goal across gastrointestinal, dermatology and rheumatology indications is to deliver a biologic that is highly effective while also offering a strong safety profile.
Litchfield said Merck sees substantial potential for LIPFENDRA, its oral PCSK9 product. She noted that 30 million U.S. patients on statins are not at their LDL target, with roughly half in secondary prevention and half in primary prevention. Merck initially expects more use among patients with established ASCVD and said early prescription trends have been encouraging.
The company continues to see LIPFENDRA as a multibillion-dollar peak-revenue opportunity and expects uptake ahead of the SEAFOOT study, Litchfield said.
Business development remains a priority
Litchfield said Merck will continue seeking externally sourced science that can address unmet medical needs and support future growth. The company is not “desperate to do any deal,” she said, but identified transactions in the $1 billion to $15 billion range as a continuing sweet spot.
Merck remains interested in opportunities in oncology, cardiometabolic disease and immunology, with business development remaining a priority for available cash, Litchfield said.
About Merck & Co., Inc. (NYSE:MRK)
Merck & Co, Inc is a global healthcare company that develops, manufactures, and markets prescription medicines, vaccines, and animal-health products. The company serves patients, healthcare providers, and customers in markets worldwide through its Human Health and Animal Health businesses.
Merck’s pharmaceutical portfolio includes oncology, infectious disease, cardiology, immunology, and other therapeutic areas. Its products include Keytruda, an immunotherapy used to treat various cancers; Gardasil, a vaccine that helps protect against human papillomavirus (HPV); and Januvia, a treatment for type 2 diabetes.
