"Keytruda, the world's top-selling drug, accounts for roughly half of Merck's revenue (49%), and its compound patent expires in December 2028. CEO Robert M. Davis stated on the Q4 earnings call that "we now have line of sight to over $70 billion of potential commercial opportunity by the mid-2030s, $20 billion more than just a year ago and more than double consensus 2028 peak KEYTRUDA revenue.""
"Merck shares are up 13.5% year-to-date and trading near $119.47, yet retail sentiment on Reddit has slipped from a bullish 63 over the past quarter to a neutral 43 this week. The catalyst is Merck's February 23 announcement to split its Human Health business into two divisions: one focused on oncology, the other on specialty pharma and infectious diseases."
"The dominant thread driving the sentiment drop comes from r/stocks, where user Pristine_Hurry_4693 laid out the bear case identifying three concerns: Keytruda's patent cliff in late 2028 threatens roughly half of Merck's total sales, AstraZeneca's Imfinzi could represent the first real competitive mechanism, and investors question whether restructuring signals confident pivot or acknowledgment that the Keytruda era is ending."
Merck shares have gained 13.5% year-to-date but retail sentiment has declined from bullish to neutral following the February 23 announcement to split its Human Health business into two divisions. Keytruda, the world's top-selling drug, generates approximately 49% of Merck's revenue with its compound patent expiring in December 2028. CEO Robert Davis projects over $70 billion in commercial opportunity by the mid-2030s, with RBC Capital initiating Outperform coverage at $142. However, Reddit investors express concerns about a potential revenue cliff from Keytruda's patent expiration and competitive threats from drugs like AstraZeneca's Imfinzi. Consensus sentiment reflects measured confidence rather than strong conviction, with analyst ratings split between Buy and Hold recommendations.
#patent-cliff-risk #pharmaceutical-restructuring #keytruda-revenue-dependency #investor-sentiment #competitive-threats
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