Merck's Non-Oncology Drugs Q4 Performance: What to Expect

As Merck MRK is gearing up to report its fourth-quarter and full-year 2025 results on Feb. 3, investors' focus is likely to be 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 nine months of 2025. Merck’s other oncology drugs, like Lynparza, Koselugo, Lenvima and Welireg, are expected to have contributed to top-line growth in the fourth quarter.

Though Keytruda sales increased 8% year over year during the third quarter of 2025, they were weaker than expected. Moreover, with Keytruda facing a looming loss of exclusivity in 2028, investors are expected to keep an eye on Merck’s non-oncology drugs, mainly its newly approved products, 21-valent pneumococcal conjugate vaccine, Capvaxive and pulmonary arterial hypertension (PAH) drug, Winrevair.

Capvaxive was approved in the United States in June 2024 and in the EU in March 2025. Winrevair was approved to treat PAH in adults with (PAH, WHO Group 1) in the United States and the EU in 2024.

In the face of the upcoming patent loss for Keytruda, Merck is pinning hopes on Capvaxive and Winrevair to drive its long-term growth. Capvaxive recorded sales of $480 million in the first nine months of 2025 and Winrevair generated sales of $976 million during the same time. We expect these two drugs to have performed well in the fourth quarter as well, given the strong launch they have witnessed so far.

Management has previously stated that Winrevair’s launch in the United States continues to outperform due to a steady increase in new prescription trends.

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 fourth quarter.

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. Enflonsia recorded sales of $79 million in the third quarter of 2025, primarily from inventory stocking. It remains to be seen how the RSV antibody performed in the fourth quarter as the product moves into broader clinical use.

MRK's Competition in the Target Market

Despite the strong potential of Merck’s new products, competitive pressure in the target market remains a major challenge.

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

United Therapeutics markets four drugs to treat PAH in the United States — Remodulin, Orenitram, Tyvaso and Adcirca. UTHR’s Tyvaso recorded sales of $1.41 billion, while Remodulin and Orenitram generated sales of $398.8 million and $375.7 million, respectively, in the first nine months of 2025.

J&J’s key PAH drugs include Opsumit and Uptravi. JNJ recorded revenues of $4.43 billion from its PAH franchise in 2025.

Enflonsia faces competition from AstraZeneca/Sanofi’s RSV antibody Beyfortus, which was also approved for a similar indication in 2023.

Besides antibodies, several vaccines are already 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

Over the past six months, shares of Merck have rallied 30.6%, compared with the industry’s 26.5% rise. The stock has also outperformed 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 15.61 forward earnings, lower than 18.36 for the industry but higher than its 5-year mean of 12.48.

The Zacks Consensus Estimate for 2025 earnings per share has declined from $8.98 to $8.95, while the same for 2026 has decreased from $8.81 to $6.94 over the past 60 days.

MRK's Zacks Rank

Merck currently has a Zacks Rank #4 (Sell).

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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