CEO Rob Davis said years of R&D and $65 billion in dealmaking have broadened the drugmaker beyond its cancer and vaccine franchises as investors focus on life after Keytruda exclusivity.
Merck CEO Rob Davis said the drugmaker has built a broader business that is no longer reliant on Keytruda alone, arguing that more than 20 planned product launches over the next five years could collectively generate $70 billion in potential revenue by the mid-2030s. Speaking on CNBC's "Mad Money" on Tuesday, Davis said the company has expanded from what he described as a Keytruda-and-vaccines business into one spanning seven therapeutic areas. The comments address a central investor concern: how Merck will replace revenue when Keytruda, one of the world's best-selling drugs in recent years, eventually loses exclusivity. Davis said the company spent the past five years accelerating internal research and using acquisitions to strengthen its pipeline, including $65 billion in business development. He pointed to Winrevair, approved by the Food and Drug Administration (U.S. drug regulator) in 2024 for a rare, life-threatening lung disease, as well as cholesterol pill Lipfendra, which was approved last month. Davis also highlighted Keytruda QLEX, an injectable version of Keytruda that can be given in about a minute instead of a 30-minute IV infusion. Merck shares were roughly unchanged Tuesday after the company beat second-quarter estimates and raised its revenue outlook, though it cut profit guidance because of accounting charges tied to its acquisition of Terns Pharmaceuticals. Over the last 12 months, the stock has risen about 60%, ahead of the iShares US Pharmaceuticals ETF's roughly 50% gain.