Can Merck Stock Outrun Its Pipeline

Can Merck Stock Outrun Its Pipeline?

Revenue grew at its usual pace over the past year while the stock outran its biggest peers, and the gap sits in a run of clinical readouts that landed early.

Merck (MRK) stock is up 83.8% over the past year, against 20.3% for the S&P 500. A rising pharma tide lifted all large caps, but nothing in the financial results explains how Merck pulled away from the pack. Revenue over the trailing twelve months is $66.57 billion, up 4.6%-almost exactly the 4.5% average of the past three years. While a broad sector re-rating provided the baseline, what separated Merck from its peers is what it proved in the clinic.

Merck Outran Its Peers, And Pfizer Only Matched The Index

Johnson & Johnson returned 53.7% over the same twelve months and Eli Lilly 61.2%. Pfizer returned 19.6%, no better than the index, so the lift was not uniform. Merck's 83.8% sits above all three, more than 22 points clear of Eli Lilly. The gap is not in the sales line; it sits in the clinic.

Management Restated The Number And The Pipeline Filled It In

Management restated, rather than raised, a commercial opportunity of greater than $70 billion from over 20 new products, a figure already on the record earlier in 2026. What changed is how much of it is now backed by evidence. Readouts the company had placed in 2027 for sac-TMT, its TROP2-directed antibody-drug conjugate, and for I-DXd both came back positive early, and the first Phase III for tulisokibart in ulcerative colitis met its primary and secondary endpoints ahead of schedule, too. Not all of it worked: the same tulisokibart program missed its primary endpoint in SSc-ILD, though the program's hidradenitis suppurativa study met its primary and key secondary endpoints.

WINREVAIR Is Already Selling, LIPFENDRA Has Just Been Cleared

WINREVAIR, for pulmonary arterial hypertension, brought in $588 million globally in the second quarter of 2026, up 75% excluding currency, with more than 1,800 new U.S. patients having received a prescription. LIPFENDRA is the newer test: the first and only oral PCSK9 inhibitor, approved, and shown in trial to cut LDL cholesterol by up to 60% when added to a statin. Management says it is not chasing the injectable PCSK9 market, which reaches about 5% or less of the total market, but the 30 million Americans on lipid-lowering therapies who are not at their recommended LDL levels. Growth that arrives from newly launched medicines is the sort the Trefis High Quality Portfolio favors.

The Terns Charge Shows What The Pipeline Costs

Merck bought part of its late-stage pipeline outright. It took a $5.7 billion charge in the second quarter of 2026 for Terns Pharmaceuticals and its chronic myeloid leukemia candidate MK-4208, and reported a non-GAAP quarterly loss of $0.13 per share, which included a one-time charge of $2.31 per share from that deal. It still raised and narrowed full-year 2026 revenue guidance to $66.3 billion to $67.3 billion-a modest 2% to 4% growth rate that implies a roughly flat second half against the trailing pace.

The KEYTRUDA family accounted for about half of the $16.6 billion Merck sold in the quarter, and management expects U.S. KEYTRUDA growth to moderate as the company reaches peak penetration in several key indications, so the replacements have to keep arriving on time. With about $369 billion of market value on the line, the test is whether the guidance keeps stepping up as the milestones scheduled for the second half of 2026 land, and a screen that ranks companies by guidance momentum is the quickest place to watch that.

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