Shares of Merck & Co. advanced 1.8% on Friday, closing at $121.41 after reaching a new 52-week peak of $123.33 during the trading session. The rally was driven by an analyst upgrade from Deutsche Bank, which raised its rating on the pharmaceutical giant and established a price target of $150 per share.
Navigating the Patent Cliff
Investor focus remains on Merck's strategy for sustaining growth as its blockbuster cancer drug Keytruda approaches patent expirations later this decade. The company recently provided a 2026 revenue forecast ranging from $65.5 billion to $67.0 billion. CEO Rob Davis has noted a disconnect with Wall Street regarding how the market is pricing the impact of older drugs losing exclusivity.
Upcoming Catalysts and Insider Activity
Merck announced it will present new clinical findings for bladder and kidney cancer treatments at the ASCO GU symposium scheduled for February 26-28. The data will include late-breaking results from the KEYNOTE-B15 study evaluating Keytruda in combination with Padcev.
In a separate filing, it was disclosed that Chief Marketing Officer Chirfi Guindo sold 10,000 shares on February 12 at a weighted average price of approximately $121.46 per share. This transaction followed a previously amended plan to sell up to 20,000 shares.
Analyst Perspective
Deutsche Bank analyst James Shin framed the upgrade as a bet that the market is overly pessimistic about Merck's ability to manage the upcoming patent cliff. "We believe the market is currently undervaluing MRK," Shin wrote, pointing to AbbVie's successful navigation of Humira's loss of exclusivity as a potential model for Merck's path forward.
Trading will resume on Tuesday following the Presidents Day market holiday. Investors are awaiting Merck's first-quarter results, scheduled for release on April 30, for updates to annual guidance and further clarity on the company's post-Keytruda strategy.
