One To Watch

Merck & Co

An American multinational pharmaceutical company headquartered in Rahway, New Jersey, home to the world's best-selling cancer medicine Keytruda, and executing a multi-billion dollar pipeline diversification strategy to sustain growth beyond its 2028 patent cliff through oncology combinations, ADCs, antiviral agents, and first-in-class molecules.

Company Overview

Merck & Co., Inc. (known as MSD outside the United States and Canada) is a global pharmaceutical company headquartered in Rahway, New Jersey, with 2025 revenues of $65 billion. The company discovers, develops, manufactures, and commercialises medicines and vaccines in oncology, infectious diseases, cardiovascular disease, metabolic disease, and animal health. Merck's cornerstone product is Keytruda (pembrolizumab), a PD-1 inhibitor that generated $31.7 billion in 2025 sales across more than 40 approved indications, with over 1,600 clinical trials ongoing. The company is executing an active pipeline diversification strategy, projecting a $70 billion-plus annual sales opportunity by the mid-2030s through 20 potential new launches and 80 late-stage readouts.

Headquarters and Global Presence

Merck & Co. is headquartered in Rahway, New Jersey, with significant research operations in West Point, Pennsylvania, and South San Francisco, California. The company has manufacturing facilities across the United States, Europe, and Asia, and operates a global commercial infrastructure spanning more than 140 countries. Merck Research Laboratories, led by Dean Y. Li, coordinates global pharmaceutical R&D. Merck Animal Health, a major contributor to overall revenues, is a leading animal medicine business operating internationally. The company operates globally under the MSD brand name in all markets outside the United States and Canada.

Founding and History

Merck & Co. traces its origins to 1668 when the Merck family operated a pharmacy in Darmstadt, Germany — the forerunner of today's separate Merck KGaA. In 1891, the German parent established a US subsidiary in New York, which operated until the US government expropriated it under the Trading with the Enemy Act in 1917 following America's entry into World War I. In 1919, George F. Merck repurchased the company for $3.5 million at a government auction, establishing Merck & Co. as an independent American enterprise. Throughout the 20th century, Merck made landmark scientific contributions including the development of streptomycin, the measles vaccine, and Mectizan for river blindness. The approval of Keytruda (pembrolizumab) in 2014 and its subsequent expansion across more than 40 cancer indications transformed Merck into the world's leading oncology pharmaceutical company.

Therapy Areas and Focus

Merck's primary therapeutic focus is oncology, centred on the Keytruda franchise and an expanding portfolio of combination therapies, antibody-drug conjugates, and next-generation immunotherapy approaches. Beyond oncology, the company is investing heavily in infectious diseases through the acquisition of Cidara Therapeutics ($9.2 billion) for the long-acting antiviral CD388 in influenza prevention. Cardiovascular and metabolic disease is addressed through the Verona Pharma acquisition ($10 billion, 2025) and the belzutifan franchise for renal cell carcinoma. Vaccines remain an important segment through Gardasil (HPV) and other products. Animal health through Merck Animal Health represents a significant and growing business segment.

Technology Platforms and Modalities

Merck's core scientific platform is anti-PD-1 checkpoint immunotherapy through Keytruda, continuously expanding through combinations with chemotherapy, targeted agents, antibody-drug conjugates, and mRNA-based neoantigen vaccines. In ADCs, a major multi-billion dollar collaboration with Daiichi Sankyo provides access to sacituzumab tirumotecan (TROP2-directed) and other next-generation ADC payloads. The mRNA neoantigen programme V940 (mRNA-4157) is being developed with Moderna for personalised cancer vaccines, with a Phase 3 trial initiated in NSCLC in 2026. Belzutifan (Welireg) is an HIF-2α inhibitor targeting VHL pathway-driven cancers. Terns Pharmaceuticals (pending $6.7 billion acquisition) adds a late-stage oral GLP-1 receptor agonist and NASH assets.

Key Pipeline and Programs

Keytruda QLEX (subcutaneous pembrolizumab formulation with berahyaluronidase alfa-pmph) received FDA approval alongside Padcev for perioperative muscle-invasive bladder cancer treatment. The combination of Keytruda plus Welireg plus Lenvima is advancing in renal cell carcinoma with positive Phase 3 data demonstrating 28% risk reduction in disease-free survival. CD388 (Cidara acquisition), an investigational long-acting antiviral for influenza prophylaxis, is in Phase 3. V940 mRNA neoantigen vaccine entered Phase 3 in adjuvant NSCLC treatment. Sacituzumab tirumotecan (TROP2-ADC from Daiichi Sankyo partnership) is in multiple trials across breast, lung, and other solid tumours. The Terns acquisition adds oral GLP-1 and thyroid hormone receptor beta agonist programmes. The pipeline includes 80 late-stage readouts projected over the next decade.

Key Personnel

Robert M. Davis serves as Chairman and Chief Executive Officer, having assumed the CEO role in July 2021 and Chairman responsibilities in December 2022. He has led the company's strategic transformation from a Keytruda-centric narrative to a diversified pipeline-driven strategy and was named to the TIME100 Health list for 2026. Dean Y. Li, M.D., Ph.D., serves as Executive Vice President and President, Merck Research Laboratories, leading global pharmaceutical R&D. Mike Klobuchar serves as Executive Vice President and Chief Strategy Officer, overseeing corporate strategy, business development, and IT. Richard DeLuca Jr. leads Merck Animal Health. Cristal Downing serves as Chief Communications and Public Affairs Officer.

Strategic Partnerships

Merck's most strategically significant partnership is its multi-billion dollar ADC collaboration with Daiichi Sankyo, providing access to patritumab deruxtecan, sacituzumab tirumotecan, and other next-generation ADC candidates for combination with Keytruda across multiple solid tumours. In mRNA cancer vaccines, Merck has a pivotal collaboration with Moderna for V940 (mRNA-4157), now in Phase 3 for adjuvant NSCLC. Merck agreed to acquire Cidara Therapeutics for approximately $9.2 billion (expected close Q1 2026) for the long-acting antiviral CD388. In 2026, Merck also agreed to acquire Terns Pharmaceuticals for approximately $6.7 billion to expand its cardiometabolic portfolio. The $10 billion acquisition of Verona Pharma (late 2025) brought ensifentrine for COPD. Merck Animal Health maintains licensing and collaboration agreements with multiple veterinary biotechnology partners.

FAQ Section

Merck's defining strategic challenge is managing the anticipated loss of Keytruda exclusivity in the United States in 2028, which currently accounts for nearly half of company revenues, through active pipeline diversification across ADCs, personalised neoantigen vaccines, long-acting antivirals, and cardiometabolic agents to sustain a projected $70 billion-plus annual opportunity by the mid-2030s.

ADCs deliver cytotoxic payloads directly to tumour cells via antibody targeting, enabling higher local drug concentrations with reduced systemic toxicity compared to conventional chemotherapy, and have demonstrated the ability to enhance checkpoint immunotherapy responses when combined with agents like Keytruda, making them a critical complement to Merck's existing immuno-oncology platform.

Merck differentiates itself through the unrivalled breadth and depth of the Keytruda platform, which underpins a systematically expanding matrix of combination strategies across more than 40 tumour types with over 1,600 active trials, and through a diversified business development strategy targeting ADCs, personalised mRNA vaccines, and first-in-class molecules in infectious disease and cardiometabolic health.

V940 (mRNA-4157), developed with Moderna, is a personalised mRNA-based neoantigen vaccine tailored to the specific mutational profile of each patient's tumour; early adjuvant melanoma data showed a 49% improvement in recurrence-free survival when combined with Keytruda, potentially establishing a new paradigm for personalised cancer immunotherapy across multiple solid tumour types.

Merck's pipeline is defined by oncology through Keytruda combinations, ADCs, and neoantigen vaccines; infectious disease through the long-acting antiviral CD388 for influenza; cardiometabolic disease through the Terns acquisition (oral GLP-1) and HIF-2α inhibition; and veterinary medicine through Merck Animal Health, with 80 late-stage readouts and 20 potential launches projected over the next decade.

Merck is a large-cap commercial pharmaceutical company generating $65 billion annually but managing a critical transition phase, balancing peak Keytruda revenues against anticipated 2028 patent loss while constructing a diversified next-generation pipeline that the company projects will collectively represent a $70 billion-plus annual opportunity by the mid-2030s.

Key watchpoints include the closing and commercial integration of the Cidara ($9.2 billion) and Terns ($6.7 billion) acquisitions, Phase 3 data for V940 mRNA neoantigen vaccine in adjuvant NSCLC, further approvals and combination data for Keytruda QLEX, the competitive landscape for HIF-2α inhibitor belzutifan in renal cell carcinoma, and Merck's progress in establishing biosimilar Keytruda strategies ahead of the 2028 US patent expiry.

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