Merck Poised for Sustainable Growth Amid Patent Expiration Concerns

Morgan Stanley's Terence Flynn believes Merck (MRK) stock remains a buy despite some concerns around its patent expiration in 2028. According to Flynn, the pharmaceutical giant has a robust clinical pipeline that will provide enough fuel for long-term momentum. One of the promising oncology candidates is intismeran autogene, which was showcased in a recent late-stage clinical trial as effective in high-risk patients with melanoma when combined with MRK's Keytruda.

The results of this trial have positioned Merck shares to rally to $179 in the coming months. Flynn argues that emerging therapies will bridge the revenue gap and smooth out the transition after Keytruda's patent expires. He believes significant multiple expansion lies ahead for MRK shares, citing Keytruda's extraordinary cash-flow generation, which brought in over $16 billion in the first half of 2026.

Merck's recent rally pushed its shares above their 20-day moving average (MA), indicating strong buying pressure. The combination of solid technical momentum and fundamental de-risking suggests institutional buyers are actively positioning for further upside. Merck is currently trading at a price-to-sales (P/S) multiple of less than 6x, which signals a major discount to its historical average.