Merck: Medical Breakthrough After Breakthrough

October 26, 2022
Health Care

The push to develop the mRNA COVID-19 vaccine was one of the most astonishing engineering and scientific efforts of all time. There were decades of dry-powder research and a brilliant multi-national effort to turn that research into an effective way to produce mRNA at scale. And then there was an even more difficult parallel effort to figure out an effective delivery mechanism for that mRNA-based vaccine.

But what’s crazy is that this mRNA technology is going to lead to even more breakthroughs in the medical field for years to come.

And at the same time, this pulled a LOT of focus into the pharma industry over the last 2 years. On the sidelines, there are a LOT of underreported breakthroughs happening that will drive value in their own right for years to come.

One company powering those breakthroughs is Merck — who just posted a brilliant Q1 earnings report and looks to be poised for a breakout after 3 years of sideways motion. Merck did a lot of work to help bring the COVID 19 mRNA vaccine into existence, but it’s their COVID treatment pill, Lagevrio, which is helping push into a new era of growth for the company.

However, it is Merck’s incredible work in cancer treatments that are going to be the big differentiator this year. Their alternative to chemotherapy, Keytruda, is poised to take on a huge amount of market share with expanded approvals.

And the key to picking the right stocks in pharma/biotech is much more about advances in medicines rather than income because they drive future financial performance.

Let’s get into it👇

Merck Overview:

Okay, Merck has technically been around for like, 400-ish years. We’re not going to be able to cover a solid overview of the company without talking your ear off. The oversimplified version is that Merck has been a mid-tier big-pharma player for a while, really coming to prominence across the back half of the 20th century. They rose to prominence on the back of a few solid drugs.

But we want to talk about what’s driving growth at Merck now. Merck is mostly popping off mainly due to three products:

  • Lagevrio: A COVID-19 treatment pill that pulled in $3.2 Billion in sales last quarter
  • Gardasil: An HPV vaccine that has grown 60% in the last year to $1.5 Billion in sales
  • Keytruda: A genuinely revolutionary antibody cancer treatment standing on top of the pile with $4.2 Billion in sales.

Basically, Lagevrio is going to contribute to huge swings in revenue pending how COVID plays out this year, but it’s risky because of how many other players are contributing to COVID treatment research.

But Keytruda is going to be the difference-maker this year as it gets expanded treatment approvals. So let’s talk about the once and future king first 👇

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