Merck Shifts Focus to Post-Keytruda Pipeline as GARDASIL Sales Stabilize

Merck's (MRK) stock has returned about 85% over the past year, and currently trades around $150. A year ago, management was dealing with a steep drop in GARDASIL sales, but that issue has largely dissipated. The vaccine is now stable, although growth comes mainly from international sales, which grew 6% in the second quarter of 2026.

The decline of GARDASIL's prominence is seen in Merck's quarterly calls, where it was mentioned only briefly on the CFO's revenue walk. Meanwhile, management has shifted its focus to a $70 billion commercial opportunity across over 20 new products, including LIPFENDRA and sac-TMT.

This narrative relies heavily on clinical and regulatory milestones rather than commercial performance, which raises some skepticism from analysts. The use of injectable PCSK9 drugs is low in the primary care setting, and it remains to be seen how broad access will be achieved for LIPFENDRA, the first oral PCSK9 inhibitor.

The near-term numbers look softer due to a $5.7 billion charge from Terns Pharmaceuticals' acquisition, but Merck has lifted its full-year 2026 revenue guidance to between $66.3 billion and $67.3 billion. This increase in guidance is seen as a signal of management's confidence.