Merck's New Drugs Hoped to Drive Growth Amid Keytruda Uncertainty

Merck's stock has risen 96% in the past year, outperforming the S&P 500's 16.8%. However, the company still faces challenges as its best-selling drug KEYTRUDA approaches a loss of exclusivity.

The key to Merck's future growth lies in its new drugs, with management expecting over $70 billion in commercial opportunities from more than 20 products. WINREVAIR and WELIREG are two promising drugs that have seen significant sales growth, up 75% and 67%, respectively.

Although the company faces risks such as trial failures or withdrawn filings, Merck's market value remains high at $367.3 billion, with a price-to-sales ratio of 5.5 times its sales over the past year. This premium valuation assumes that most of the new drugs will be successful.