Merck's Pipeline Seen as Stronger Than Bristol Myers Squibb's Ahead of Patent Cliff

Merck's pipeline is better equipped to handle looming patent cliffs than Bristol Myers Squibb, according to BMO Capital Markets. The firm is most bullish on Merck right now, citing the company's ability to put large and derisked growth products in place before exclusivity erosion begins.

Merk faces significant exposure with its blockbuster immunotherapy Keytruda, which will lose exclusivity at the end of 2028 and put $33 billion in revenue at risk. However, Merck has a strong pipeline, including intismeran autogene, an mRNA cancer vaccine partnered with Moderna, and sac-TMT, a TROP2 antibody drug conjugate.

In contrast, BMS is expected to lose exclusivity for Opdivo and Eliquis in 2028, which together account for roughly half of the company's $48.2 billion revenue. While BMS has set up potential revenue replacements, such as Cobenfy and milvexian, these assets are riskier than Merck's.

According to Evan Seigerman, BMO managing director and head of healthcare research, 'Cobenfy in Alzheimer psychosis, that's pretty risky. That's a binary stock move for a big company.'