JNJ vs. MRK: Which Blue-Chip Pharma Stock Should Be in Your Portfolio?

By Kinjel Shah | October 27, 2025, 9:19 AM

Johnson & Johnson JNJ and Merck MRK are leading U.S. healthcare giants, making them natural peers for a head-to-head comparison.

Both companies have a strong presence in oncology, immunology and neuroscience areas. Other than that, J&J also has drugs for cardiovascular and metabolic diseases, pulmonary hypertension and infectious diseases, along with a strong presence in the medical devices segment.

On the other hand, Merck boasts a strong presence in vaccines, virology and hospital acute care.

Both firms face looming patent expirations and headwinds from Medicare Part D redesign. 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 J&J

J&J’s biggest strength is its diversified business model, as it has not just pharmaceuticals, but also medical devices, which helps it to withstand economic cycles more effectively. It operates through more than 275 subsidiaries.

J&J’s Innovative Medicine unit is showing a growth trend. The segment’s sales rose 3.4% in the first nine months of 2025 on an organic basis despite the loss of exclusivity (“LOE”) of its multi-billion-dollar product, Stelara, and the negative impact of the Part D redesign. The third quarter was the segment’s second consecutive quarter of sales of more than $15 billion despite Stelara’s LOE. Growth is being driven by J&J’s key drugs like Darzalex, Erleada and Tremfya. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato also contributed significantly to growth.

J&J’s MedTech business has improved in the past two quarters, driven by the acquired cardiovascular businesses, Abiomed and Shockwave, as well as Surgical Vision and wound closure in Surgery. Improvements in J&J’s electrophysiology business also drove the growth.

Along with its third-quarter earnings release, J&J announced its intention to separate its Orthopaedics franchise in the MedTech segment into a standalone orthopedics-focused company, called DePuy Synthes.

The decision aligns with J&J’s efforts to shift its MedTech portfolio to high-innovation, high-growth markets like cardiovascular and robotic surgery. J&J expects that the separation will improve its MedTech unit’s growth and margins, as the Orthopaedics franchise has been a slow-growth business for J&J.

In 2026, J&J expects accelerated growth in both the Innovative Medicine and MedTech segments.

J&J has rapidly advanced its pipeline this year, attaining significant clinical and regulatory milestones that will help drive growth through the back half of the decade. This year, it gained approval for new products like Inlexzoh/TAR-200, a first-of-its-kind drug-releasing system, for treating high-risk non-muscle invasive bladder cancer and Imaavy (nipocalimab) for treating generalized myasthenia gravis. J&J believes that nipocalimab has a pipeline-in-a-product potential. Regulatory applications were recently filed for another key candidate, icotrokinra, for moderate-to-severe plaque psoriasis. J&J believes that icotrokinra has the potential to revolutionize the treatment of plaque psoriasis with a once-a-day pill.

J&J believes 10 of its new products/pipeline candidates in the Innovative Medicine segment have the potential to deliver peak sales of $5 billion, including Talvey, Tecvayli, Imaavy, newly acquired Caplyta, Inlexzo, Rybrevant, plus Lazcluze and icotrokinra.

However, the Stelara patent cliff, the impact of Part D redesign and slowing sales in China in the MedTech segment and the pending talc lawsuits are significant headwinds.

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.

Last month, the FDA approved a subcutaneous formulation of Keytruda, known as Keytruda Qlex, which can enhance patient convenience. With Keytruda’s intravenous or IV formulation set to lose exclusivity in 2028, the newly approved SC version comes with its own set of patents that extend protection well beyond that date.

MRK’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. This has positioned Merck to launch around 20 new vaccines and drugs over the next few years, with many having blockbuster potential. These include Merck’s new 21-valent pneumococcal conjugate vaccine, Capvaxive, and pulmonary arterial hypertension drug, Winrevair, which have the potential to generate significant revenues over the long term. Both products are off to strong starts.

Merck acquired Verona Pharma this year, which has added the latter’s chronic obstructive pulmonary disease or COPD drug, Ohtuvayre, to its portfolio. This addition strengthens Merck’s cardio-pulmonary pipeline and portfolio as the drug’s differentiated profile provides a significant edge over its competitors. Ohtuvayre's commercial launch is off to a solid start.

Merck’s Animal Health business is a key contributor to its top-line growth, as the company is recording above-market growth.

However, sales of Gardasil, which is Merck’s second-largest product, are declining due to weak performance in China, which resulted 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 from dual PD-1/VEGF inhibitors like Summit Therapeutics’ (SMMT) ivonescimab that inhibit both the PD-1 pathway and the VEGF pathway at once. They are designed to overcome the limitations of single-target therapies like Keytruda. Pfizerrecently acquiredexclusive global ex-China rights to develop, manufacture and commercialize SSGJ-707, a dual PD-1 and VEGF inhibitor, from China’s 3SBio.

How Do Estimates Compare for JNJ & MRK?

The Zacks Consensus Estimate for J&J’s 2025 sales and EPS implies a year-over-year increase of 5.4% and 8.8%, respectively. The Zacks Consensus Estimate for 2025 earnings has remained unchanged at $10.86 per share, while that for 2026 has risen from $11.37 to $11.46 over the past 30 days.