What Is Merck Stock’s Biggest Opportunity?

Merck (MRK) stock returned 96% in the past twelve months, against 16.8% for the S&P 500. With the shares 4.0% below their 52-week high, you need a reason Merck can keep growing. In its fiscal Q2 2026 call, management looked past its best-selling drug to newer ones. So what is Merck stock’s biggest opportunity from here?

Merck’s Biggest Opportunity Is Its New Drugs

Merck’s biggest opportunity is its group of new drugs, which management expects to transform its portfolio. Merck already has drugs growing fast. One is WINREVAIR, a drug for adults with pulmonary arterial hypertension. Its sales were $588 million in fiscal Q2 2026, up 75% from a year earlier.

On September 22, 2026, Merck said the FDA had approved an update to the WINREVAIR label based on the HYPERION trial. The label now includes data from adults recently diagnosed with the disease.

WELIREG is a second drug with fast-rising sales. Its sales were $271 million in fiscal Q2 2026, up 67% from a year earlier. Management credited international launches and more use in certain U.S. patients. Both drugs are still growing from small sales figures.

How Big Could Merck’s New Drugs Get?

Management puts the commercial opportunity from more than 20 new products at over $70 billion. That is management’s own estimate. Individually, each of these newer drugs still represents a small fraction of Merck’s overall business. Merck’s revenue was $16.6 billion in fiscal Q2 2026. WINREVAIR made up about 3.5% of that.

KEYTRUDA, Merck’s cancer drug, is far larger. The KEYTRUDA family had sales of $8.4 billion in fiscal Q2 2026, about half of Merck’s revenue. That pipeline momentum was underscored in August 2026, when Merck and Moderna announced positive Phase 3 INTerpath-001 trial results for their individualized mRNA cancer therapy (intismeran autogene / mRNA-4157) combined with KEYTRUDA in resected high-risk melanoma.

KEYTRUDA faces a loss of exclusivity, when cheaper copies can compete. A question on the fiscal Q2 2026 call put that period at 2028 through the early 2030s. On earnings, management noted it expects a shallow dip with a fast return to growth. On overall revenue, before adjusting for the risk of pipeline attrition, management still aspires to grow straight through that period.

Merck’s market value is $367.3 billion. That is 5.5 times Merck’s sales over the past twelve months, against 3.1 times for the S&P 500. At 5.5, Merck’s own price-to-sales ratio sits near the top tenth of its ten-year range of 3.1 to 5.9. That premium valuation appears to assume little will go wrong for Merck’s new drugs.

What Could Go Wrong For Merck’s New Drugs?

A trial can miss its goal, or a filing can be withdrawn. Merck has had both in 2026. In the fiscal Q2 2026 call, management listed a possible approval for I-DXd in extensive-stage small cell lung cancer. An announcement on September 25, 2026, said a U.S. application for I-DXd had been voluntarily withdrawn. The application covered previously treated patients with the same cancer.

Merck also reported in the same call that one study of tulisokibart, an antibody in testing, did not meet its main goal. The same drug had positive results in a separate Phase III trial.

The larger risk for a holder is that KEYTRUDA copies arrive before the new drugs are big enough. On September 3, 2026, India’s Cipla partnered with China’s Qilu Pharmaceutical for a U.S. launch of a KEYTRUDA copy. Merck hosts an investor event at the European Society for Medical Oncology meeting in Madrid on October 26.

Merck’s new drugs remain its biggest opportunity. The share price appears to assume most of them work. If Merck’s investor event in Madrid adds support for the new drugs, the case for them is stronger. If another filing is withdrawn or another study fails, that case is weaker. Merck would then rely more on KEYTRUDA as its copies approach.

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