Merck (MRK)
Key Statistics
EV/EBIT = 11.7x
ROE = 39.31%
Debt/Equity = 72%
FCF Yield = 7.6%
Dividend Yield = 3.85%
Market Cap = $210.79 billion
The Company
Merck & Co. (MRK) is one of the world’s leading pharmaceutical companies, generating most of its revenue from prescription medicines, vaccines, and animal health products. While it once had a consumer health division, Merck sold that business to Bayer in 2014 to focus on areas with higher growth and profitability. These include prescription-only medications, innovative vaccines, biologic therapies, and veterinary products—sectors that align more closely with Merck’s strength in scientific research and development.
Merck’s best-selling product by far is Keytruda, a revolutionary cancer drug that brought in $29.5 billion in 2024 alone. Unlike traditional chemotherapy, which attacks both cancerous and healthy cells, Keytruda is a form of immunotherapy. It helps the body’s own immune system recognize and destroy cancer cells. It is used to treat a wide range of cancers, including lung, skin (melanoma), bladder, and breast cancer. Keytruda is patent-protected in the U.S. through at least 2028, with some additional protections potentially extending into the next decade, securing its place as Merck’s most vital asset.
Gardasil 9 is another cornerstone product. It’s a vaccine that protects against the human papillomavirus (HPV), a common virus that can cause several types of cancer, including cervical and throat cancers. It generated $8.6 billion in sales in 2024. Gardasil is typically given to adolescents before they become sexually active to prevent future HPV-related diseases. Its manufacturing complexity makes it hard to copy, giving it an edge against generic competition.
Merck also manufactures essential pediatric vaccines such as ProQuad, M-M-R II, and Varivax, which protect against measles, mumps, rubella, and chickenpox. These are widely used in childhood immunization schedules and together brought in $2.5 billion. Although not major growth drivers, they remain dependable sources of revenue due to their widespread use.
The company’s diabetes drugs Januvia and Janumet, which once played a more central role, earned $2.3 billion in 2024. These oral medications help manage blood sugar in people with type 2 diabetes. However, with their patents having expired, cheaper generic alternatives are increasingly replacing them, leading to a steady decline in sales.