Merck: Keytruda is half of sales, and acquisition charges pushed its P/E to 151

Merck & Co., known as MSD outside the United States and Canada, sells prescription medicines and vaccines, which were 89% of its 2025 revenue, and animal health products, 10%. Revenue was $65.0 billion in 2025, up 1.3%, and net income $18.3 billion, or $7.28 a share. One product dominates: Keytruda, an anti-PD-1 cancer therapy, brought in $31.7 billion, 48.7% of the total. The stock closed at $149.52 on October 30, 2026, for a market value of $368.9 billion.

Gardasil, the HPV vaccine, fell 39% in 2025. Merck says it paused shipments to China in February 2025 because of above-normal inventory at its commercialization partner there, and had not resumed them; sales in China dropped to $1.9 billion from $5.5 billion. Winrevair, for pulmonary arterial hypertension, more than tripled to $1.4 billion. Januvia and Janumet lost U.S. market exclusivity in May 2026, and Merck expects to lose nearly all of their U.S. sales. The company also expects Keytruda sales to be materially hurt by biosimilar competition between 2028 and 2029.

The pharmaceutical segment reported a profit of $45.8 billion on $58.1 billion of sales in 2025, but that measure leaves out the research spending of Merck Research Laboratories, $15.8 billion in total that year. Animal health earned $2.1 billion on $6.4 billion. Income before taxes for the whole company was $21.1 billion.

Acquisitions booked as research expense

Merck has spent about $50 billion buying companies since 2021: Acceleron for $11.5 billion in November 2021, Prometheus Biosciences for $11.0 billion in June 2023, Verona Pharma for $10.4 billion in October 2025, Cidara Therapeutics for $9.2 billion in January 2026, Terns Pharmaceuticals for $6.8 billion in May 2026 and the poultry-technology company TARGAN for about $650 million in July 2026. When a deal is mainly a drug still in development, Merck records most of the price as research and development expense at once.

That is why 2023 shows almost no profit: a $10.2 billion charge for Prometheus ($4.00 a share) and a $5.5 billion charge for a cancer-drug agreement with Daiichi Sankyo ($1.69 a share). The same happened in 2026. Cidara cost a $9.0 billion charge ($3.62 a share) in the first quarter and Terns $5.7 billion ($2.31) in the second, and a license deal with SciBrunch added $0.12 in the third. Revenue rose 4.9% to $51.0 billion in the first nine months of 2026, but Merck reported a net loss of $510 million, against a profit of $15.3 billion a year earlier. In the third quarter alone, sales rose 5% to $18.1 billion and net income was $5.1 billion.

Why the P/E is 151

Earnings per share over the last four quarters were $0.99, so at $149.52 the stock traded at 151 times trailing earnings. Merck does not exclude these charges from its adjusted, non-GAAP earnings either: adjusted earnings per share were $3.12 over the same period, a P/E of 47.9, and the company expects $2.77 to $2.82 for 2026, charges included. Adding back the $6.05 a share of 2026 charges gives adjusted earnings of roughly $9.17 and a P/E of about 16, by our own approximate math.

The stock rose 73.3% in the twelve months to October 30, from $86.28, and closed 4.4% below its record of $156.45, set on August 25, 2026. The largest one-day move in that period, a 12.6% rise on August 19, 2026, came with no Merck filing at the SEC other than insider-trading forms. The quarterly dividend is $0.85 a share, raised from $0.81 in November 2025, a yield of about 2.3%.

Spin-offs in the price history

Merck spun off Medco Health Solutions on August 19, 2003, giving 0.1206 Medco share for each Merck share, and Organon & Co., its women’s health, biosimilars and established brands businesses, on June 2, 2021, one Organon share for every ten. Yahoo Finance records Organon as a 1.048 stock split and the Medco shares as a $2.74 dividend; the cash dividend Merck actually paid in 2003 was $1.45. Merck also voluntarily withdrew Vioxx from the market on September 30, 2004, and on November 3, 2009 merged with Schering-Plough, which legally acquired the old Merck and took its name. Measured from the first close in the Yahoo series, January 2, 1962, $1,000 of Merck stock would be worth about $378,000, or about $2.36 million with dividends reinvested. On price alone, the November 2000 high was not exceeded until November 2021.

Who owns it, and who traded

BlackRock, with 8.17%, is the only holder above 5% listed in the 2026 proxy statement. Seven of the 38 investment managers this site tracks held Merck at the end of June; Cliff Asness’s AQR had the largest stake, 8.1 million shares worth $1.04 billion, after a 5.7% cut. Ken Griffin’s Citadel, Israel Englander’s Millennium and Steve Cohen’s Point72 cut theirs by half or more in the second quarter, and Ray Dalio’s Bridgewater returned with a small position.

No insider bought shares in the open market in the twelve months to October 30, 2026. Eleven executives sold $72.0 million, none reported under a pre-arranged trading plan, all in the weeks after the February and August earnings reports; general counsel Jennifer Zachary sold the most, $25.2 million, and chief executive Robert Davis sold $5.6 million on February 4, 2026.

The figures above come from Merck’s 10-K and 10-Q filings, its 8-K reports, its proxy statement and the 13F, Form 4 and Form 144 filings. They describe what happened; they are not a forecast and not investment advice.