Merck's Non-Oncology Drugs Q3 Performance: What to Expect

Merck MRK is scheduled to report third-quarter 2025 results on Oct. 30. Investors are likely to focus on the sales performance of its blockbuster cancer drug, Keytruda. The drug accounted for more than 50% of the company’s pharmaceutical sales during the first half of 2025. The company’s other oncology drugs, like Lynparza, Koselugo, Lenvima, and Welireg, are expected to have contributed to top-line growth.

However, with Keytruda facing a looming loss of exclusivity in 2028, investors are closely watching Merck’s non-oncology drugs, mainly its newly approved products, 21-valent pneumococcal conjugate vaccine, Capvaxive and pulmonary arterial hypertension (PAH) drug, Winrevair.

Both Capvaxive and Winrevair witnessed a strong uptake during the first half of 2025. Capvaxive recorded sales of $236 million in the first half of 2025 and Winrevair generated sales worth $615 million during the same time.

We expect these two new drugs to have performed well in the third quarter, given the strong launch they have witnessed so far.

Merck’s Animal Health business is also a key contributor to its top-line growth, as the company is recording above-market growth. Revenues from the Animal Health business are likely to have risen in the third quarter. Our estimates for Animal Health suggest a CAGR of 5.9% over the next three years.

Merck’s newest respiratory syncytial virus (RSV) antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025, while it is under review in the EU. Merck is currently gearing up to launch Enflonsia to help protect infants entering their first RSV season.

A fixed-dose combination of doravirine and islatravir for the treatment of HIV is under review in the United States, with an FDA decision expected in April next year.

MRK's Competition in the Target Market

While Merck’s new products show strong potential, competition in the target market also looms large.

Winrevair is likely to face stiff competition in the PAH market, which remains highly competitive. Significant players in the PAH market are United Therapeutics UTHR and J&J JNJ.

J&J’s key PAH drugs include Opsumit and Uptravi. JNJ recorded revenues of $2.14 billion from its PAH franchise in the first half of 2025.

UTHR markets four drugs to treat PAH in the United States — Remodulin, Orenitram, Tyvaso and Adcirca. United Therapeutics’ Remodulin, Orenitram and Tyvaso recorded sales of $272.9 million, $244.6 million and $935.9 million, respectively, in the first half of 2025.

Meanwhile, Enflonsia is also likely to face competition from AstraZeneca/ Sanofi’s RSV antibody Beyfortus, which was also approved for a similar indication in 2023.

Besides antibodies, some other vaccines have been approved for preventing RSV in certain patients in the United States. These include Pfizer’s Abrysvo, GSK’s Arexvy and Moderna’s mRESVIA.

MRK's Price Performance, Valuation and Estimates

Year to date, shares of Merck have declined 12.3% against the industry’s rise of 5.5%. The stock has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

From a valuation standpoint, Merck appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 9.33 forward earnings, lower than 15.56 for the industry and its 5-year mean of 12.63.

The Zacks Consensus Estimate for 2025 earnings per share has decreased from $8.94 per share to $8.92, while the same for 2026 has decreased from $9.55 to $9.44 over the past 60 days.

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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This article originally published on Zacks Investment Research (zacks.com).

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