Analogy 1: A major pharmaceutical company, similar to Pfizer, but especially known for its blockbuster cancer drugs and vaccines.

Analogy 2: Essentially the prescription drug and vaccine business of a company like Johnson & Johnson, without the broader consumer or medical device divisions.

• Keytruda (pembrolizumab): An immunotherapy used to treat various types of cancer by enhancing the body's immune response against tumor cells.
• Gardasil/Gardasil 9: Vaccines that protect against human papillomavirus (HPV) infection, which can cause certain cancers and genital warts.
• Januvia (sitagliptin) and Janumet (sitagliptin/metformin): Medications for type 2 diabetes that help lower blood sugar levels.
• Bridion (sugammadex): A selective relaxant binding agent used to reverse the effects of certain neuromuscular blocking agents in surgical settings.
• Pneumovax 23: A vaccine that helps protect against serious infections caused by 23 types of Streptococcus pneumoniae bacteria, such as pneumonia and meningitis.
• Varivax/ProQuad: Vaccines that protect against chickenpox (varicella) and, in the case of ProQuad, also against measles, mumps, and rubella.

Merck (MRK) sells its pharmaceutical products primarily to other companies and institutions rather than directly to individuals. While no single customer accounts for more than 10% of Merck's consolidated gross sales (as per its SEC filings), its products are largely distributed through major pharmaceutical wholesalers and healthcare providers.

The key types of customer companies and institutions that Merck serves include:

• Drug wholesalers and retailers
• Hospitals and clinics
• Government entities
• Managed healthcare providers and medical agencies

Specifically, in the U.S., Merck's products are extensively distributed through major pharmaceutical wholesale distributors. These wholesalers act as critical intermediaries, purchasing medicines and vaccines from manufacturers like Merck and then distributing them to pharmacies, hospitals, and other healthcare facilities. The three largest of these distribution partners are:

• McKesson Corporation (Symbol: MCK)
• AmerisourceBergen Corporation (Symbol: ABC)
• Cardinal Health, Inc. (Symbol: CAH)

These companies are essential to Merck's supply chain, enabling its products to ultimately reach individual patients globally.

Robert M. Davis, Chairman of the Board and Chief Executive Officer

Robert M. Davis joined Merck in 2014 as Chief Financial Officer. He became President in April 2021, Chief Executive Officer and a member of the board of directors on July 1, 2021, and Chairman of the Board on December 1, 2022. Before joining Merck, he served as Corporate Vice President and President of Baxter's medical products business, where he also held roles as President of Baxter's renal business, CFO, and Treasurer. Prior to his 2004 tenure at Baxter, Davis spent 14 years at Eli Lilly and Company, where he held various positions of increasing responsibility, including Director of Corporate Financial Planning. He serves on the board of directors for Duke Energy Corporation.

Caroline Litchfield, Executive Vice President and Chief Financial Officer

Caroline Litchfield was appointed Executive Vice President and Chief Financial Officer of Merck, effective April 1, 2021. She is responsible for the company's finance, procurement, and real estate operations. Litchfield joined Merck in 1990 in its U.K. business and has held a wide range of positions of increasing responsibility in the company's country, regional, and global finance functions. She previously served as the company's treasurer, overseeing treasury, tax, and investor relations. From 2014 to 2018, Litchfield led finance for Human Health, Merck's largest business, with oversight of financial operations and reporting in approximately 100 markets. She was instrumental in integrating Merck and Schering-Plough following their merger in 2009. Litchfield also serves on the board of directors for Verizon.

Sanat Chattopadhyay, Executive Vice President and President, Merck Manufacturing Division

Sanat Chattopadhyay serves as Executive Vice President and President of the Merck Manufacturing Division. In this role, he is responsible for Merck's global manufacturing and supply operations.

Dean Y. Li, M.D., Ph.D., Executive Vice President and President, Merck Research Laboratories

Dean Y. Li is the Executive Vice President and President of Merck Research Laboratories. He oversees Merck's global drug and vaccine discovery and development pipeline.

Jennifer Zachary, Executive Vice President and General Counsel

Jennifer Zachary holds the position of Executive Vice President and General Counsel for Merck. In this capacity, she is responsible for Merck’s global legal affairs, including corporate governance, litigation, and intellectual property.

The rapid advancement and expansion of mRNA technology platforms (e.g., from companies like Moderna and BioNTech) beyond infectious diseases into oncology and a broader range of therapeutic areas pose a clear emerging threat. These platforms have demonstrated rapid development cycles and high efficacy, and their continued evolution could challenge Merck's established vaccine portfolio (e.g., Gardasil, Pneumovax) and its oncology pipeline, including existing immunotherapies, by offering potentially superior or more rapidly developed alternatives.

Merck (MRK) operates in several key therapeutic areas with significant addressable markets for its main products and services.

Here are the addressable market sizes for some of Merck's primary products:

• Keytruda (pembrolizumab): The global market size for Keytruda is estimated at approximately USD 28.62 billion in 2025 and is projected to reach USD 33.08 billion by 2030, with a Compound Annual Growth Rate (CAGR) of 2.94% during this period. Another estimate indicates the global market size was USD 29.49 billion in 2024 and is projected to reach USD 26.63 billion by 2030, experiencing a CAGR of -3.23% from 2025 to 2030, partly due to patent expiration. North America holds the largest market share for Keytruda.
• Gardasil (HPV vaccine): The global Gardasil (HPV vaccine) market size is estimated at USD 6 billion in 2025 and is expected to exceed USD 8 billion by 2033, growing at a CAGR of 5% from 2019 to 2033. Another report indicates the global Gardasil market was approximately USD 4.86 billion in 2024 and is projected to reach around USD 11.69 billion by 2034, with a CAGR of roughly 11.60% between 2025 and 2034. The broader global human papillomavirus vaccines market (which includes Gardasil) was valued at USD 9.33 billion in 2024 and is projected to grow from USD 9.67 billion in 2025 to USD 22.06 billion by 2032, exhibiting a CAGR of 12.50%. The U.S. market for HPV vaccines is estimated to reach USD 4.07 billion in 2025.
• Pneumococcal Vaccines (e.g., Pneumovax 23, Vaxneuvance): The global pneumococcal vaccine market was valued at USD 8.8 billion in 2024 and is expected to grow from USD 9.2 billion in 2025 to USD 15.1 billion in 2034, at a CAGR of 5.6%. Another valuation for the global market was USD 9.63 billion in 2024, with anticipated growth at a CAGR of 6.26% through 2030. North America was the largest revenue-generating market in 2023, accounting for a 75.4% share of the global market.
• Januvia/Janumet (sitagliptin and metformin hydrochloride): Januvia holds approximately 25-30% of the global DPP-4 inhibitor market share. The global diabetes care market is projected to reach approximately USD 128 billion by 2025. Janumet specifically holds the highest market share of about 37.4% in the Combination Anti-Diabetes Drugs Market. The Combination Anti-Diabetes Drugs Market is estimated at USD 1.21 billion in 2025 and is expected to reach USD 2.02 billion by 2030, with a CAGR of 10.87% during that period. North America accounts for the largest market share in the Combination Anti-Diabetes Drugs Market in 2025. Global annual sales for Januvia/Janumet are projected to be between USD 4.8 billion and USD 5.3 billion in 2025-2026.
• Bridion (sugammadex): The estimated sales for Bridion in the U.S. are projected to be $379.07 million in 2025. A global addressable market size for Bridion as a standalone product was not explicitly found.
• Lagevrio (molnupiravir): As a COVID-19 antiviral, Lagevrio's sales are highly dependent on the pandemic's progression. Sales reached $5.7 billion in 2022, and Merck anticipated 2023 sales to be around $1.3 billion. U.S. sales for Lagevrio are projected at $144.08 million for 2025. A definitive global addressable market size for Lagevrio could not be determined due to its fluctuating demand based on the pandemic.

Merck (MRK) is expected to drive future revenue growth over the next two to three years through a diversified strategy focusing on its oncology leadership, successful new product launches, strategic acquisitions, a robust pipeline, and continued strength in its Animal Health segment.

1. Continued Expansion and New Formulations of KEYTRUDA: Despite its looming patent expiration in 2028, KEYTRUDA remains a significant growth engine for Merck. The company is expanding the drug's use into earlier-stage cancer indications, which accounted for over 25% of its sales growth in fiscal Q3 2025. The recent FDA approval of KEYTRUDA QLEX, a subcutaneous formulation, across most solid tumor indications, is expected to provide extended patent protection beyond 2028 and offer a more convenient administration for patients and healthcare providers. This new formulation, which can be administered in as little as one minute, aims to retain market share against future biosimilar competition.

2. Success of Recently Launched Products: Merck anticipates significant contributions from its recently launched products. Winrevair, a pulmonary arterial hypertension therapy approved in March 2024, saw a 141% increase in sales in Q3 2025. The company expects its growth to accelerate with a recent label expansion by the FDA and potential further expansion into pre- and post-capillary pulmonary hypertension. Capvaxive, a pneumococcal 21-valent conjugate vaccine, generated $244 million in revenue in Q3 2025 and is projected to gain a majority market share. Welireg, for kidney cancer, also shows promise for becoming a blockbuster therapy.

3. Strategic Business Development and Diversification: Merck is actively pursuing strategic acquisitions and licensing deals to broaden its portfolio beyond its current blockbusters. The recent acquisition of Verona Pharma, completed in October 2025, and its lead product OHTUVAYRE (a maintenance treatment for COPD) is cited as an important growth driver with multi-billion dollar commercial potential into the next decade. Management has indicated an urgency to continue looking at potential acquisition targets to build on this strategy.

4. Advancements in Cardiovascular and Immunology Pipelines: Merck has a robust late-phase pipeline, with approximately 80 Phase III trials underway across multiple therapeutic areas, including cardiovascular and immunology. Key readouts are expected in these areas over the next year. Notably, positive topline results were announced for enlicitide decanoate, an investigational oral PCSK9 inhibitor for hypercholesterolemia, which has the potential to be the first approved oral PCSK9 inhibitor. Sotatercept, another next-generation cardiovascular drug, is also viewed as a major growth driver by 2026.

5. Consistent Growth in Animal Health: Merck's Animal Health business continues to be a strong and consistent contributor to overall revenue growth. This segment reported a 9% increase in sales in Q3 2025, or 7% excluding foreign exchange impacts, and is expected to remain a robust contributor.