Eli Lilly vs. Merck: Which Drug Giant Appears Better Poised Today?

By Kinjel Shah | July 17, 2025, 9:45 AM

Both Eli Lilly LLY and Merck MRK are major players in the U.S. pharmaceutical industry, developing and commercializing therapies across oncology, immunology, and diabetes and cardiovascular areas. While Lilly boasts a leading presence in cardiometabolic health with its successful GLP-1 drugs, Mounjaro and Zepbound, oncology is Merck’s forte, backed by its blockbuster PD-L1 inhibitor, Keytruda.

While Lilly also markets some drugs in the neuroscience area, Merck boasts a strong presence in vaccines, virology and hospital acute care.

Both companies are working to diversify beyond their key therapeutic areas, diabetes and obesity for Lilly and oncology for Merck, to counter competitive pressures. But which one is a better investment option today? Let’s take a closer look at their fundamentals, growth prospects and challenges to make an informed choice.

The Case for Lilly

Lilly has seen tremendous success with its popular tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound.

Despite being on the market for less than three years, Mounjaro and Zepbound became key top-line drivers for Lilly, with demand rising rapidly. Mounjaro and Zepbound account for around 50% of the company’s total revenues.

Though sales of Mounjaro and Zepbound were below expectations in the second half of 2024, hurt by slower-than-expected growth and unfavorable channel dynamics, their sales picked up in the first quarter of 2025, driven by launches of the drugs in new international markets and improved supply from ramped-up production.

We expect increased uptake in outside U.S. markets and deeper penetration in the U.S. market to have driven Mounjaro and Zepbound’s growth in the second quarter and will continue to do so in the rest of 2025. Approvals for new indications can also drive sales of Mounjaro and Zepbound higher.

In addition to Mounjaro and Zepbound, Lilly has gained approvals for several other new drugs over the past couple of years across various therapeutic areas, including Omvoh, Jaypirca, Ebglyss, and Kisunla (donanemab). Lilly expects its new drugs, Mounjaro, Zepbound, Omvoh, Jaypirca, Ebglyss and Kisunla, along with the expanded use of existing drugs, to drive sales growth in 2025.

Lilly is also making rapid pipeline progress in obesity, diabetesand cancer, with several key mid- and late-stage data readouts expected this year. Lilly is investing broadly in obesity and has several next-generation candidates currently in clinical development, like orforglipron, an oral GLP-1 small molecule, and retatrutide, a GGG tri-agonist.

LLY is also working to diversify beyond GLP-1 drugs by expanding into cardiovascular, oncology, and neuroscience areas. In 2025, it has already announced three M&A deals. Lilly is acquiring Verve Therapeutics VERV, which will add gene therapies for heart disease to its pipeline. Prior to the VERV deal, Lilly announced that it had entered into agreements to acquire Scorpion Therapeutics’ oncology drug and SiteOne Therapeutics’ non-opioid pain candidate.

Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States. In 2025, Lilly expects a mid-to-high single-digit percentage price decline, including U.S. Part D changes. Potential competition in the GLP-1 diabetes/obesity market is another headwind.

Mounjaro and Zepbound face strong competition from Novo Nordisk’s NVO semaglutide medicines, Ozempic for diabetes and Wegovy for obesity. Novo Nordisk has already filed an application for an oral version of Wegovy and also has several next-generation candidates in its obesity pipeline, like CagriSema (a combination of semaglutide and cagrilintide) and amycretin (a dual GLP-1 and amylin receptor agonist).

Several companies like Amgen and Viking Therapeutics are also making rapid progress in the development of more potent and convenient GLP-1-based candidates in their clinical pipeline.

The Case for MRK

Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda has played an instrumental role in driving Merck’s steady revenue growth in the past few years. Keytruda’s sales are gaining from rapid uptake across earlier-stage indications, mainly early-stage non-small cell lung cancer. Continued strong momentum in metastatic indications is also boosting sales growth. The company expects continued growth from Keytruda, particularly in early lung cancer. Merck is also developing a subcutaneous formulation of Keytruda that can extend its patent life. Merck is working on different strategies to drive Keytruda's long-term growth.

Merck has been making meaningful regulatory and pipeline progress across areas like oncology, vaccines and infectious diseases while executing strategic business moves. Merck’s phase III pipeline has almost tripled since 2021, supported by in-house pipeline progress as well as the addition of candidates through M&A deals.

Merck’s new products, Capvaxive and Winrevair, are witnessing strong launches and have the potential to generate significant revenues over the long term. Merck’s long-acting monoclonal antibody, Enflonsia (clesrovimab), for the prevention of respiratory syncytial virus, was approved by the FDA last month.

Merck recently intensified its acquisition strategy, actively pursuing deals to enhance its pipeline and diversify away from Keytruda. Earlier this month, it announced a definitive agreement to acquire Verona Pharma for approximately $10 billion. With this deal, Merck will add Verona’s Ohtuvayre, approved for the maintenance treatment of chronic obstructive pulmonary disease (COPD). Ohtuvayre was approved by the FDA in June last year. Merck has also been tapping Chinese biotechs lately for licensing deals.

However, sales of Gardasil, Merck’s second-largest product, are declining due to a weak performance in China, resulting from sluggish demand trends amid an economic slowdown. Merck is also seeing weakness in the diabetes franchise and the generic erosion of some drugs.

Merck is heavily reliant on Keytruda. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, it can also be argued that the company is excessively dependent on the drug and it should look for ways to diversify its product lineup.

There are rising concerns about the firm’s ability to grow its non-oncology business ahead of the upcoming loss of exclusivity of Keytruda in 2028.

Also, competitive pressure might increase for Keytruda in the near future. Medicare Part D redesign is expected to hurt sales of diabetes drugs, Januvia/Janumet, in 2025.

How Do Estimates Compare for LLY & MRK?

The Zacks Consensus Estimate for LLY’s 2025 sales and EPS implies a year-over-year increase of 33.0% and 68.4%, respectively. EPS estimates for 2025 have declined from $22.08 per share to $21.88 per share over the past 60 days, while those for 2026 have risen from $30.83 to $30.84 per share over the same timeframe.