Merck's Surprising Surge: What Drives Its Success
Merck stock rose by an impressive 86.8% over the past year, outperforming the S&P 500's 20.6% return. What might have driven this significant price increase? A closer look at Merck's financials reveals that two products, WINREVAIR and CAPVAXIVE, were already generating revenue before the stock surge began.
WINREVAIR, used to treat pulmonary arterial hypertension, had passed $1 billion in cumulative sales within 15 months of its launch. In fiscal Q2 2025, it booked $336 million in revenue. CAPVAXIVE, an adult pneumococcal conjugate vaccine, saw a significant increase from $50 million in fiscal Q4 2024 to $129 million in fiscal Q2 2025.
Management had previously disclosed these products as key offsets to the KEYTRUDA patent expiry, which was expected to have a significant impact on Merck's revenue. The fact that these products were already generating revenue and growing suggests that investors were underestimating the company's pipeline.