AZN vs MRK: Two Global Drugmakers With Divergent Growth Strategies

AstraZeneca (AZN) and Merck (MRK) are two leading global drugmakers with diverse portfolios. Oncology is a key growth driver for both companies, with AZN's oncology segment accounting for about 46% of total revenues and MRK's accounting for over 60%. AZN has a strong presence in immunology, rare diseases, vaccines, and cardiovascular/respiratory medicine, while MRK's portfolio includes vaccines, neuroscience, diabetes, virology, and animal health.

MRK boasts six blockbuster drugs, led by Keytruda, which is expected to achieve peak sales of $35 billion by 2028. However, the company faces significant biosimilar competition around 2028-2029. MRK's reliance on Keytruda is a concern, as it is also heavily dependent on the drug for revenue growth.

AZN, on the other hand, has 16 blockbuster medicines in its portfolio, with sales exceeding $1 billion. The company expects continued revenue and earnings growth in 2026, with total revenues expected to grow by a mid-to-high single-digit percentage at constant exchange rates (CER) and core earnings per share (EPS) increasing by a low double-digit percentage at CER.

Both companies face challenges, including the loss of exclusivity for mature brands and generic erosion. AZN's stock has taken a beating recently, while MRK's stock has risen 39.5% this year.