As pharmaceutical companies face up to a wave of patent cliffs, Merck (MRK) says it has plenty more to come than just its flagship cancer drug.
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Speaking on the sidelines of JPMorgan (JPM) healthcare conference industry event, CEO Rob Davis told CNBC that there is more to the company than its blockbuster cancer drug, Keytruda.
“We are now in a situation where we can really leverage the strength of Keytruda to go well beyond Keytruda,” he told the network’s Jim Cramer.
The immuno-oncology drug generated $25 billion in 2023 and $21.6 billion through the first nine months of 2024, making it about the most lucrative drug among several being produced by pharmaceutical companies facing imminent loss of exclusivity (LOE) in the next decade.
MRK Addresses LOE
Davis highlighted Winrevair, which is used to treat a life-threatening lung condition that was approved by the U.S. Food and Drug Administration last year, as a potentially lucrative drug.
And while sales of its Gardasil vaccine, which prevents cancers from HPV, have been lighter than expected, recent regulatory approval China opens up a large market.
In a presentation at the JPM healthcare event, Davis said the company had nearly tripled the number of assets in phase 3 development since 2021.
LOE Wave for MRK, PFE and BMY
Beyond MRK, the industry is facing similar challenges. Bristol Myers Squibb’s (BMY) Revlimid, the multiple myeloma drug acquired in the buyout of Celgene, faces a slate of generic competitors in March before a full generic market in 2026. The drug’s sales were $4.4 billion in the first nine months of Fiscal year 2024, but the company expects an “step down” to between $2 billion and $2.5 billion in 2025. Pomalyst and Sprycel, drugs that sold a combined $3.7 billion over the same nine months, are also due to face generics this year.
Meanwhile, Pfizer CEO Albert Bourla said there is “clearly a LOE wave that is coming” that will cost the company $17 billion or $18 billion between 2026 and 2028.
Speaking with JPM analyst Chris Schott, he said however that recent products acquired by the company, including those from its $43 billion purchase of Seagen, will generate about $20 billion in sales by 2030 to offset the LOE products.
PFE drugs to lose U.S. patents in coming years include Inlyta, Xeljanz, Eliquis, Ibrance and Xtandi.
Is MRK a Good Stock to Buy?
Overall, Wall Street has Moderate Buy consensus rating on MRK stock, based on 10 Buys and seven Holds. The average MRK price target of $124.14 implies almost 24% upside from current levels. Shares of MRK have fallen 13% in the last 12 months.
