How Large Is Merck’s Phase 3 Drug Pipeline?

We estimate that the value of Merck’s (NYSE:MRK) phase 3 drug pipeline (not counting the enhancement of currently marketed products) could be as much as $37 billion, or nearly 25% of its current market value. Merck has traditionally been strong in anti-infective drugs and vaccines, and these therapeutic areas continue to be a significant part of its phase 3 pipeline. However, the single most important drug that Merck is expected to launch is its Alzheimer’s drug, which has estimated potential peak sales of $5 billion. Take a look at our interactive breakdown of Merck’s phase 3 drug pipeline which shows key factors determining the pipeline’s value such as expected peak sales, expected growth trajectory and probability of market approval. You can play around with the assumptions to see how it impacts the company’s drug pipeline’s revenue forecast and valuation.

Our price estimate for Merck stands at $64, implying a premium to the market price.

Summary of Merck’s Phase 3 Drug Pipeline

Estimated value ~ $37 billion

Estimated probability-adjusted revenue for 2024 ~ $7 billion

Breakup of probability-adjusted revenue for 2024 by therapeutic area:

• Neuroscience ~ $2.13 billion
• Infectious Diseases ~ $1.89 billion
• Vaccines ~ $1.57 billion
• Diabetes/Endocrinology ~ $1.2 billion
• Cardiovascular ~ $150 million
• Neuroscience ~ $90 million

Key Drugs In Phase 3 Pipeline

The top drugs in phase 3 pipeline include neuroscience drug MK-8931 (for Alzheimer’s), infectious diseases drugs such as MK-7655A, Doravirine and MK-8228, vaccines such as Ebola Vaccine, V212 and V419, and diabetes drug Ertugliflozin which has just been approved. The image below is a snapshot of our interactive breakdown of J&J’s phase 3 drug pipeline.

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