Merck & Co. (MRK) Slid on Weaker Market Sentiment and Concerns About Drug Pipeline

Impax Asset Management, an investment management company, released its “Impax US Sustainable Economy Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In 2025's second quarter, tariffs triggered market declines and recession fears, but a pause in tariffs sparked a historic rally as earnings remained resilient. In the second quarter of 2025, the fund underperformed the Russell 1000 benchmark. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, Impax US Sustainable Economy Fund highlighted stocks such as Merck & Co., Inc. (NYSE:MRK). Headquartered in Rahway, New Jersey, Merck & Co., Inc. (NYSE:MRK) is a leading healthcare company. The one-month return of Merck & Co., Inc. (NYSE:MRK) was -3.49%, and its shares lost 28.18% of their value over the last 52 weeks. On August 5, 2025, Merck & Co., Inc. (NYSE:MRK) stock closed at $80.79 per share, with a market capitalization of $202.866 billion.

Impax US Sustainable Economy Fund stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its second quarter 2025 investor letter:

"Merck & Co., Inc. (NYSE:MRK) (Health Care, Pharmaceuticals) has a high Corporate Resilience score, and is contributing to a more robust and sustainable health care system through its leading drug and vaccine discovery. The stock’s weakness in Q2 was driven by a combination of concerns about its drug pipeline, particularly the competition from generic versions of Keytruda, and weaker market sentiment around Health Care stocks."

Merck & Co., Inc. (NYSE:MRK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 93 hedge fund portfolios held Merck & Co., Inc. (NYSE:MRK) at the end of the first quarter, which was 91 in the previous quarter. Merck & Co., Inc. (NYSE:MRK) reported total revenues of $15.8 billion for Q2 2025, representing a 2% decrease, both in nominal terms and when excluding the impact of foreign exchange.While we acknowledge the potential of Merck & Co., Inc. (NYSE:MRK) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Merck & Co., Inc. (NYSE:MRK) and shared the list of cheap pharmaceutical stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.