Armed with what CEO Robert Davis called the “broadest and widest pipeline we’ve had in years,” Merck is preparing for its post-Keytruda future with what it foresees as a host of major sales opportunities over the next decade.
Thanks in part to its recent acquisitions of Verona Pharma and Cidara Therapeutics, the company sees new growth drivers delivering potential annual revenue of more than $70 billion by the "mid-2030s," Merck said in its fourth-quarter and full-year earnings presentation (PDF).
To put the $70 billion number into context, Davis pointed to the figure as being more than double the $35 billion Keytruda is expected to pick up during its peak sales year in 2028. The oncology superstar is slated for a loss of exclusivity (LOE) in 2028, and a growing pipeline of Keytruda biosimilars is already lining up to take a shot at the drug’s massive market.
“Our belief in our ability to have substantial growth once we get closer to the LOE is as high as it’s ever been,” Davis emphasized on a conference call. “And we’re not done.”
Of note, Merck does have two patents on Keytruda that extend through late 2029. While it has publicly discussed the LOE timeline as being in 2028 based on the drug’s main compound patent, the company has growing confidence that it can defend those two 2029 patents, Davis noted, although he added that Merck’s strategy won’t change whether Keytruda loses its exclusivity in 2028 or 2029.
The company’s 2025 revenue came to $65 billion, reflecting 1% growth from 2024. Excluding its animal health division, pharmaceutical sales specifically contributed $58.1 billion, also up 1%.
As usual, top-selling Keytruda contributed the most to Merck’s overall total with $31.7 billion in sales last year, good for 7% growth from 2024. The drug’s $8.4 billion in sales over the fourth quarter specifically was driven by “robust uptake” in earlier-stage cancers and strong demand in its metastatic indications, the company noted. Elsewhere in oncology, Merck's newer Welireg posted 37% sales growth during the fourth quarter to $220 million, reflecting continued uptake as its launch in international markets picks up.
HPV vaccine Gardasil, meanwhile, again bogged down sales with a 39% decline to $5.2 billion for the full year. Although Merck’s Gardasil franchise is its top earner behind Keytruda, the vaccine’s free-falling revenue has become a familiar story for the New Jersey drugmaker. Lower demand in China, now joined by lower sales in Japan, was “partially offset” by higher U.S. sales, the company said.
In fact, over the fourth quarter, the company said it logged no Gardasil sales in China. During the same period in 2024, the China-specific sales number for Gardasil was $400 million.
Despite the Gardasil woes and the increasing U.S. pressures confronting all vaccine makers lately, the bright spot in Merck’s vaccine portfolio was pneumococcal disease shot Capvaxive. Approved in 2024, the vaccine pulled in $759 million in full-year sales, with its performance attributed largely to continued U.S. uptake, the company said.
Pulmonary arterial hypertension (PAH) drug Winrevair, meanwhile, lived up to its blockbuster potential in 2025, taking home $1.4 billion in sales. The med came to Merck from its $11.5 billion Acceleron buyout in 2021 and will soon celebrate two years on the commercial market, where it is “reshaping the standard of care in PAH,” Dean Li, M.D., Ph.D., head of Merck’s Research Laboratories, said on the company’s earnings call.
For 2026, the company is anticipating sales of $65.5 billion to $67 billion, a modest range that fell below Wall Street estimates, according to reports. In presenting its guidance, Merck cited a $2.5 billion revenue headwind in its modeling based on generic competition and Inflation Reduction Act (IRA) price cuts for diabetes med Januvia, as well as “softening demand” for COVID med Lagevrio.
M&A to come
Last year, Merck splashed out on two deals, each worth about $10 billion, for Cidara and its flu antiviral and Verona and its potential chronic obstructive pulmonary disorder (COPD) blockbuster Ohtuvayre. Although deals worth “up to $15 billion” are right in Merck's “sweet spot,” as Davis explained, the company is willing to “go bigger” for “the right scientific deal.”
This commentary was prompted by questions surrounding recent reports about Merck's purported interest in buying Revolution Medicines for up to $32 billion, as previously reported by The Financial Times. Those talks, however, reportedly fell through after disagreements on price, according to The Wall Street Journal.
Davis declined to comment on the market rumors, but in Merck's presentation, the company said it's “actively pursing additional science-driven, value-creating transactions.”
Nonetheless, the new assets from Merck's 2025 buys make up a large chunk of anticipated future revenues. Cidara’s flu antiviral holds “significant potential” to “positively impact public health” with more than $5 billion in prospective commercial opportunity in the next decade, Merck said.
Elsewhere, the company maintains that “almost all” of its more than 20 new growth drivers hold blockbuster potential, with a more than $25 billion opportunity in oncology, $20 billion in the cardiometabolic area and $15 billion in infectious diseases. Some of these meds include Winrevair, Ohtuvayre, and late-stage pipeline assets like Merck's Gilead-partnered HIV combo, among others.