Merck’s MRK strong oncology sales growth is largely driven by its biggest revenue driver, Keytruda. The blockbuster PD-L1 inhibitor alone accounts for around 55% of the company’s pharmaceutical sales. The drug currently holds 44 FDA-approved indications across 19 tumor types, along with two tumor-agnostic approvals.
Keytruda recorded sales of $8.0 billion in the first quarter of 2026, increasing 8% year over year. Sales of the drug gained from continued strong momentum in metastatic indications and rapid uptake across earlier-stage indications.
Keytruda sales beat the Zacks Consensus Estimate of $7.73 billion in the first quarter.
Management expects Keytruda to sustain growth in 2026 through expansion into new indications and global markets, while maintaining a strong market share.
Though Keytruda intravenous (IV) is set to face loss of exclusivity in 2028, its sales are expected to stay strong until then. Management expects Keytruda to achieve peak sales of $35 billion by 2028 before it loses exclusivity.
Building on this momentum, Merck has been working on different strategies to drive Keytruda’s long-term growth. These include innovative immuno-oncology combinations, including Keytruda with LAG3 and CTLA-4 inhibitors. In partnership with Moderna, Merck is developing a personalized mRNA therapeutic cancer vaccine called intismeran autogene (V940/mRNA-4157) in combination with Keytruda in pivotal phase III studies for earlier-stage and adjuvant NSCLC and adjuvant melanoma.
Also, on the regulatory front, a potential approval for Keytruda in combination with Padcev in muscle-invasive bladder cancer is expected later in the year. This is likely to keep investors interested, as continuous label expansion into additional cancer settings should propel Keytruda’s growth in the next couple of years. However, competition in the target market remains a concern.
PD-L1 Inhibitors Competing With Keytruda
Keytruda faces competition from other PD-L1 inhibitors, including Roche’s RHHBY Tecentriq, AstraZeneca’s AZN Imfinzi and Bristol Myers’ BMY Opdivo.
Tecentriq is Roche’s leading immuno-oncology drug approved for multiple cancer indications. RHHBY recorded CHF 811 million in Tecentriq sales in the first quarter of 2026, up 4% year over year, driven by growth in new indications.
AZN’s Imfinzi generated sales of $1.69 billion in the first quarter of 2026, up 30%, driven by demand growth across all regions from existing indications and new launches. Imfinzi has strategically expanded its use across multiple cancer indications, strengthening AstraZeneca’s oncology portfolio.
BMY’s Opdivo, like Keytruda, is approved across multiple cancer types, including lung, melanoma and kidney cancers. Bristol Myers recorded $2.15 billion in Opdivo sales in the first quarter of 2026, down 5% year over year.
MRK’s Price Performance, Valuation and Estimates
Year to date, shares of Merck have increased 6.8% against the industry’s decline of 4%.
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From a valuation standpoint, Merck is trading at a discount compared with the industry. Going by the price/earnings ratio, the company’s shares currently trade at 16.43 forward earnings, lower than 16.48 for the industry. However, the stock is trading above its 5-year mean of 12.71.
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The Zacks Consensus Estimate for 2026 earnings per share has increased from $4.87 to $4.88, while the same for 2027 has declined from $9.85 to $9.77 over the past 30 days.
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MRK’s Zacks Rank
Merck currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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