Merck Stock Investors Overlooking Key Cancer Drug Slowdown

Merck stock has seen a significant run in recent times, but investors may be overlooking one crucial factor that could impact its growth. The KEYTRUDA family of cancer drugs, which accounts for about half of Merck's sales, is nearing peak use in the US market. According to management, the drug family is close to reaching all the patients it can in its main uses, leading to a moderation in U.S. growth.

KEYTRUDA's sales were $8.4 billion in the second quarter of 2026, about half of Merck's quarterly revenue of $16.6 billion. Despite growing 4% in that quarter, management expects slower U.S. growth due to peak use.

Another concern is the entry of biosimilars, or close copies of KEYTRUDA, into the US market. India's Cipla and China's Qilu Pharmaceutical have partnered to bring a biosimilar to the US market, which could further impact KEYTRUDA's sales.