Eli Lilly (LLY) and Merck (MRK) are two pharmaceutical giants with strong portfolios in oncology, immunology, and neuroscience. Lilly has carved out a leadership position in cardiometabolic health, with its GLP-1 drugs Mounjaro and Zepbound driving around 65% of total revenues. Merck, on the other hand, relies heavily on its blockbuster cancer drug Keytruda, which accounts for about 55% of its pharmaceutical sales.
Lilly's cardiometabolic franchise has seen remarkable growth, with Mounjaro and Zepbound generating combined sales of $27.6 billion in the first half of 2026. The company's newly launched oral GLP-1 pill, Foundayo, is expected to be a commercial game-changer, offering a convenient alternative to injectable treatments. Lilly is also developing next-generation therapies like Retatrutide, which targets multiple pathways and could deliver greater weight loss and metabolic benefits.
Merck's growth is largely driven by Keytruda, which is expected to achieve peak sales of $35 billion by 2028. The company is exploring innovative combinations and partnerships to extend Keytruda's lifecycle. Merck's pipeline includes promising drugs like Winrevair, Welireg, and Capvaxive, with plans to launch 20 new drugs by 2030. However, Merck faces challenges, including declining sales of its HPV vaccine Gardasil and revenue pressure from generic erosion.
Analysts expect Lilly's 2026 sales and earnings per share (EPS) to increase by 36.5% and 37.2%, respectively. Merck's 2026 sales are projected to rise by 3.2%, while EPS is expected to decline by 70.5%. Year-to-date, Merck's stock has risen 38.0%, outperforming Lilly's 18.5% gain. From a valuation standpoint, Merck appears more attractive, with a lower price-to-earnings ratio and a higher dividend yield.