Merck's Keytruda Franchise Faces 2028 Biosimilar Threat

Pharmaceutical giant Merck has received a warning that its Keytruda franchise is facing increased competition in 2028, when the core patent expires. Cipla's US subsidiary has secured exclusive rights to QL2107, a proposed pembrolizumab biosimilar developed by Qilu Pharmaceutical.

While QL2107 still needs to complete development and win regulatory approval, its presence marks a significant threat to Keytruda's dominance in the market. The company generated $8.4 billion in quarterly sales from Keytruda and its subcutaneous version, Qlex.

Merck's share price has risen 25.87% above its GF Value, indicating that investors are aware of the potential threat and are willing to pay a premium for the stock. To mitigate this risk, Merck needs to shift patients to Qlex, expand Keytruda's reach, and develop new growth engines.

The company has been trying to build a defense against patent cliffs by promoting its newer subcutaneous version, but it remains to be seen whether these efforts will be enough to protect the franchise from biosimilar competition.