The MoatNarrow moat

Merck & Co. (MRK) — moat facet

Merck's high returns are Keytruda's returns, and Keytruda's protection has a published end date.

Merck's moat is narrow because most of it has an expiry date that Merck itself has published. Keytruda, which sold $31,681 million with its injectable form in 202512, is protected by patents and by a label covering over 40 American indications3, but biosimilar competition could begin in December 20284, and a Medicare price is expected from January 20295.

Return on invested capital (%)6.9%20157.0%201712.0%201920.1%20212.7%202324.4%202422.9%2025Moat Explorer calculation from SEC EDGAR XBRL; pre-tax income plus interest
Keytruda-era returns, with a deal-year dip.

Around it are three smaller advantages. Vaccines are hard to make, and Merck is the only American maker of two childhood vaccines6, but Gardasil fell 39% in 2025 when China stopped buying7. Animal Health is steady, with segment profit of $2,131 million in 20258. And Merck has the cash to buy science: operating cash flow of $16,472 million in 20259, used to buy Verona for $10.4 billion10 and in 2026 Cidara and Terns11.

The returns show both the strength and the cost of that approach. Return on invested capital, computed from Merck's filings, was 22.9% in 2025 and 24.4% in 2024, against 2.7% in 2023, the year of the Prometheus and Daiichi Sankyo charges12. Merck tags no operating income in its filings, so the calculation uses pre-tax income plus interest expense13.

Over eleven years the pattern is clear. The ratio was between 6% and 12% from 2015 to 2020, when Keytruda was still growing into its position, and above 20% in every year since except 202314. The high returns are Keytruda's returns.

The high returns sit on a balance sheet that has grown with the acquisitions. Total assets were $136,866 million at the end of 2025, against $117,106 million a year earlier, and goodwill and other intangibles were $21,579 million and $26,681 million15. Return on average equity was about 36.9% in 202516, flattered by the $5.1 billion of buybacks and $8.2 billion of dividends that kept equity from growing as fast as earnings17.

The eleven-year history makes the point from the other side. Merck's diluted earnings were $1.56 a share in 2015 and $0.87 in 2017, a tax-reform year18, before Keytruda had grown into its position; they were $6.74 in 2024 and $7.28 in 202519. Dividends per share rose from $1.81 to $3.28 over the same years2021, a steadier line than earnings because the board pays from cash rather than from the accounting result.

The moat is narrow and narrowing on the calendar. The number that decides it is return on invested capital after 2029: if Merck can stay above an 8% hurdle once Keytruda faces biosimilars and a government price, the replacement worked; if it falls to the pre-Keytruda range of 6% to 7%, the moat was one molecule.

Moat trajectory: Narrowing

Keytruda's American exclusivity and price protection end in 2028-2029; the replacement is being bought.

The number that tests this moat
Moat Explorer calc
Return on invested capital vs an 8% hurdle
22.9% (2025); 24.4% (2024); 2.7% (2023)

Keytruda-era returns; a fall back toward the 6-7% of 2015-2017 after 2029 would mean the moat was one molecule.

How it's calculated: NOPAT (pre-tax income plus interest expense, times one minus the effective tax rate) divided by average operating invested capital (total assets less current liabilities less cash), from SEC EDGAR XBRL. Merck tags no operating income, so pre-tax income plus interest stands in; acquired research charged to expense depresses 2023 and will depress 2026.
Source: Moat Explorer ROIC calculation from EDGAR ↗
Aspects of the moat
DIG DEEPER 01
Keytruda: One Molecule, Half the Company
Keytruda earns half of Merck's sales and its own maker has published the dates on which that stops.
DIG DEEPER 02
Vaccines: Plants a Rival Cannot Rent
Merck's vaccine plants are hard to copy, but China's warehouse and America's schedule decide how many doses they sell.
DIG DEEPER 03
Animal Health: A Steadier Third Leg
Animal Health is Merck's steadiest business at about a tenth of sales, which is why it cannot replace Keytruda.
DIG DEEPER 04
Buying the Next Pipeline
Merck is buying its way past Keytruda, and charges most of the price to earnings the day it pays.
References
  1. ReportedKeytruda, which sold $31,681 million with its injectable form in 2025, is protected by patents and by a label covering over 40 American indications, but biosimilar competition could begin in December 2028, and a Medicare price is expected from January 2029.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  2. Moat Explorer calcKeytruda, which sold $31,681 million with its injectable form in 2025, is protected by patents and by a label covering over 40 American indications, but biosimilar competition could begin in December 2028, and a Medicare price is expected from January 2029.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ millions unless stated). Lines 2025: Keytruda 31,641 + Keytruda Qlex 40 = 31,681; other pharmaceutical 58,142 - 31,681 - 5,233 = 21,228; Animal Health 6,354; other revenue 515; total 31,681 + 5,233 + 21,228 + 6,354 + 515 = 65,011. 2024: 29,482; 57,400 - 29,482 - 8,583 = 19,335. 2023: 53,583 - 25,011 - 8,886 = 19,686. 2022: 52,005 - 20,937 - 6,897 = 24,171. 2021: 42,754 - 17,186 - 5,673 = 19,895. Everything else 2025: 65,011 - 31,681 = 33,330. Keytruda share of sales: 11,084 / 39,121 = 28.3% (2019, continuing basis); 17,186 / 48,704 = 35.3% (2021); 25,011 / 60,115 = 41.6% (2023); 31,681 / 65,011 = 48.7% (2025); Q2 2026 8,366 / 16,607 = 50.4%. Keytruda and Gardasil Q2 2026 (8,366 + 1,169) / 16,607 = 9,535 / 16,607 = 57.4%. Qlex 463 / 8,366 = 5.5%. Keytruda growth: 31,641 / 29,482 - 1 = 7.3% (2025); 29,482 / 25,011 - 1 = 17.9% (2024); 31,641 / 17,186 = 1.84, compound (1.84)^(1/4) - 1 = 16.5% a year; 31,641 / 11,084 = 2.85 (2019-2025). US share of Keytruda 18,829 / 31,641 = 59.5%. International Keytruda 12,812 / 11,610 - 1 = 10.4%; US Keytruda 18,829 / 17,872 - 1 = 5.4%. US Keytruda share of total sales 18,829 / 65,011 = 29.0%. Royalty: 2.5% x 31,681 = 792; 6.5% x 31,681 = 2,059. Gardasil US royalty 7% x 2,641 = 185. Winrevair royalty 22% x 1,443 = 317; 22% x 419 = 92; Winrevair Q2 2026 588 x 4 = 2,352, 22% x 2,352 = 517. Segment margins: Pharmaceutical 45,754 / 58,142 = 78.7% (2025); Q2 2026 11,612 / 14,760 = 78.7% (recast basis). Animal Health 2,131 / 6,354 = 33.5% (2025); 1,938 / 5,877 = 33.0% (2024); 1,737 / 5,625 = 30.9% (2023); 1,963 / 5,550 = 35.4% (2022); 1,950 / 5,568 = 35.0% (2021); Q2 2026 636 / 1,775 = 35.8%. Unallocated research 14,987 / 58,142 = 25.8%; Animal Health research 448 / 6,354 = 7.1%. Animal Health segment profit 2,131 / 45,754 = 4.7% of Pharmaceutical. Gardasil: international 2,592 / 6,158 - 1 = -57.9%; US 2,641 / 2,083 - 1 = 26.8%; share 5,233 / 65,011 = 8.0%; share of sales 2021 5,673 / 48,704 = 11.6%, 2022 6,897 / 59,283 = 11.6%, 2023 8,886 / 60,115 = 14.8%, 2024 8,583 / 64,168 = 13.4%; Q2 2026 1,169 x 4 = 4,676. Vaccines H1 2026 2,314 + 2,361 = 4,675; H1 2025 2,607 + 2,370 = 4,977; 4,675 / 4,977 - 1 = -6.1%. Childhood vaccines growth 2,368 / 2,241 - 1 = 5.7%; 2,485 / 2,368 - 1 = 4.9%; 2,451 / 2,485 - 1 = -1.4%. Pneumococcal: Pneumovax 166 / 893 - 1 = -81%; 825 + 759 + 166 = 1,750; 1,750 / 893 = 2.0; (825 + 759) / 166 = 9.5; Capvaxive + Vaxneuvance 759 + 825 = 1,584; 1,584 / 6,494 = 24.4% of Prevnar. Animal Health: livestock 3,896 / 6,354 = 61.3%; livestock growth 3,300 / 3,295 - 1 = 0.2%, 3,337 / 3,300 - 1 = 1.1%, 3,462 / 3,337 - 1 = 3.7%, 3,896 / 3,462 - 1 = 12.5%; companion 2,458 / 2,415 - 1 = 1.8%, 2,458 / 2,273 - 1 = 8.1%; companion excluding Bravecto 2,458 - 1,100 = 1,358; rest of Animal Health 6,354 - 1,100 = 5,254; Bravecto 359 / 335 - 1 = 7%. Segment 6,354 / 5,877 - 1 = 8.1%; 5,625 / 5,568 - 1 = 1.0%; Q2 2026 1,775 / 1,646 - 1 = 7.8%; compound (6,354 / 5,568)^(1/4) - 1 = 3.4% a year; share 6,354 / 65,011 = 9.8%; 6,354 / 31,681 = 0.20 of Keytruda; 6,354 / 9,467 = 67% of Zoetis; Zoetis 9,467 / 9,256 - 1 = 2.3%. Competitors: Keytruda 31,641 / Opdivo 10,049 = 3.1. Geography: US 36,510 / 65,011 = 56.2%; China 1,939 / 6,802 - 1 = -71%; China share 4,378 / 48,704 = 9.0% (2021), 6,802 / 60,115 = 11.3% (2023), 5,494 / 64,168 = 8.6% (2024), 1,939 / 65,011 = 3.0% (2025); other regions 65,011 - 36,510 - 14,580 - 2,711 - 1,939 = 9,271. Wholesaler receivables 22% + 21% + 13% = 56% (2025); 21 + 21 + 13 = 55 (2024); 21 + 20 + 14 = 55 (2023). Januvia and Janumet: 3,324 + 1,964 = 5,288 (2021); 2,189 + 1,177 = 3,366 (2023); 1,334 + 935 = 2,269 (2024); 1,604 + 940 = 2,544 (2025). Newer products Q2 2026: 588 + 271 + 204 + 184 = 1,247; 1,247 / 8,366 = 14.9%. Bridion 1,841 / 4 = 460 a quarter. Other pharmaceutical Q2 2026 14,760 - 8,366 - 1,169 = 5,225; Q2 2025 14,050 - 7,956 - 1,126 = 4,968; 5,225 / 4,968 - 1 = 5.2%; 2025 share 21,228 / 65,011 = 32.7%. Research: 30,531 / 60,115 = 50.8% of sales (2023). Charges 2026 9.0 + 5.7 = 14.7 bn; per share 3.62 + 2.31 = 5.93. Ohtuvayre 204 x 4 = 816; 12,100 / 816 = 14.8. Tax guidance midpoints (23.5 + 24.5) / 2 = 24.0; (35.0 + 36.0) / 2 = 35.5. Balance sheet: net debt end-2025 2,589 + 46,750 - 14,565 = 34,774; end-2024 2,649 + 34,462 - 13,242 - 447 = 23,422; end-2023 1,372 + 33,683 - 6,841 - 252 = 27,962; 30 June 2026 2,825 + 51,081 - 6,849 - 292 = 46,765, cash and short-term investments 6,849 + 292 = 7,141; net debt to equity 34,774 / 52,606 = 0.66; 46,765 / 41,933 = 1.1. Net income 2023-2025 365 + 17,117 + 18,254 = 35,736. Valuation: year-end 2025 market value 261.26 bn / net income 18.254 bn = 14.3; free cash flow 2025 16,472 - 4,112 = 12,360; 12,360 / 365,090 = 3.4%. Trailing twelve months to June 2026: sales 65,011 - 31,335 + 32,893 = 66,569; net income 18,254 - 9,506 - 5,575 = 3,173. EPS guidance midpoints (5.00 + 5.15) / 2 = 5.075; (5.04 + 5.16) / 2 = 5.10; (2.66 + 2.76) / 2 = 2.71. Protection from 2026: 2043 - 2026 = 17 years; 2028 - 2026 = 2 years. Year-end P/E = market value / net income: 147.55 / 4.442 = 33.2 (2015); 162.31 / 3.920 = 41.4 (2016); 153.30 / 2.394 = 64.0 (2017); 198.69 / 6.220 = 31.9 (2018); 231.56 / 9.843 = 23.5 (2019); 206.96 / 7.067 = 29.3 (2020); 193.59 / 13.049 = 14.8 (2021); 281.30 / 14.519 = 19.4 (2022); 276.26 / 0.365 = 757 (2023); 251.65 / 17.117 = 14.7 (2024); 261.26 / 18.254 = 14.3 (2025); 365.09 / 3.173 = 115.1 (TTM). Return on average equity 2025: 18,254 / ((52,606 + 46,313) / 2) = 18,254 / 49,460 = 36.9%. Gross profit 2025 65,011 - 16,382 = 48,629; 48,629 / 65,011 = 74.8%; royalty 792 / 16,382 = 4.8% of cost of sales. Keytruda increase 2021-2025 31,681 - 17,186 = 14,495; sales increase 65,011 - 48,704 = 16,307. US sales 36,510 / 28,480 - 1 = 28%. Pharmaceutical margin 2021 30,977 / 42,754 = 72.5%. Livestock less companion 3,295 - 2,273 = 1,022 (2021); 3,896 - 2,458 = 1,438 (2025). Prevnar 6,494 / Vaxneuvance 825 = 7.9. Animal Health 2025 6,354 against Keytruda franchise Q2 2026 8,366 - product and segment totals, growth and royalties. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Merck's Forms 10-K and 10-Q, results releases, the Bristol Myers Squibb, Pfizer and Zoetis 10-Ks and market data; operands shown in the source line.
  3. ReportedKeytruda, which sold $31,681 million with its injectable form in 2025, is protected by patents and by a label covering over 40 American indications, but biosimilar competition could begin in December 2028, and a Medicare price is expected from January 2029.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  4. ReportedKeytruda, which sold $31,681 million with its injectable form in 2025, is protected by patents and by a label covering over 40 American indications, but biosimilar competition could begin in December 2028, and a Medicare price is expected from January 2029.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  5. ReportedKeytruda, which sold $31,681 million with its injectable form in 2025, is protected by patents and by a label covering over 40 American indications, but biosimilar competition could begin in December 2028, and a Medicare price is expected from January 2029.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  6. ReportedVaccines are hard to make, and Merck is the only American maker of two childhood vaccines, but Gardasil fell 39% in 2025 when China stopped buying.
    Merck & Co. Form 10-K for fiscal 2025 - vaccines and China: Gardasil, the childhood and pneumococcal vaccines, and sales in China. — FY2025 · publ. 24 February 2026 · source ↗
  7. ReportedVaccines are hard to make, and Merck is the only American maker of two childhood vaccines, but Gardasil fell 39% in 2025 when China stopped buying.
    Merck & Co. Form 10-K for fiscal 2025 - vaccines and China: Gardasil, the childhood and pneumococcal vaccines, and sales in China. — FY2025 · publ. 24 February 2026 · source ↗
  8. ReportedAnimal Health is steady, with segment profit of $2,131 million in 2025.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  9. ReportedAnd Merck has the cash to buy science: operating cash flow of $16,472 million in 2025, used to buy Verona for $10.4 billion and in 2026 Cidara and Terns.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  10. ReportedAnd Merck has the cash to buy science: operating cash flow of $16,472 million in 2025, used to buy Verona for $10.4 billion and in 2026 Cidara and Terns.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  11. ReportedAnd Merck has the cash to buy science: operating cash flow of $16,472 million in 2025, used to buy Verona for $10.4 billion and in 2026 Cidara and Terns.
    Merck & Co. Form 10-Q for the quarter ended 30 June 2026 - segment profits on the recast basis, the Cidara and Terns acquisitions, the Halozyme litigation, China shipments, loss of exclusivity events and the balance sheet. — Q2 2026 · publ. 7 August 2026 · source ↗
  12. Moat Explorer calcReturn on invested capital, computed from Merck's filings, was 22.9% in 2025 and 24.4% in 2024, against 2.7% in 2023, the year of the Prometheus and Daiichi Sankyo charges.
    Moat Explorer calculation from SEC EDGAR XBRL for CIK 310158: return on invested capital 6.9% (2015), 6.2% (2016), 7.0% (2017), 11.7% (2018), 12.0% (2019), 9.5% (2020), 20.1% (2021), 21.1% (2022), 2.7% (2023), 24.4% (2024), 22.9% (2025). Merck tags no operating income, so EBIT is pre-tax income plus interest expense (2025: 21,067 + 1,357); invested capital 75,444 (2024) and 93,974 (2025). — 2015-2025 · publ. September 2026 · source ↗
    Method: NOPAT (pre-tax income plus interest expense, times one minus the effective tax rate) divided by average operating invested capital (total assets less current liabilities less cash), from SEC EDGAR XBRL via a copy of tools_roic_edgar.py. Acquired research charged to expense depresses 2023 and will depress 2026; 2019-2020 combine restated continuing-operations earnings with pre-spin balance sheets.
  13. Moat Explorer calcMerck tags no operating income in its filings, so the calculation uses pre-tax income plus interest expense.
    Moat Explorer calculation from SEC EDGAR XBRL for CIK 310158: return on invested capital 6.9% (2015), 6.2% (2016), 7.0% (2017), 11.7% (2018), 12.0% (2019), 9.5% (2020), 20.1% (2021), 21.1% (2022), 2.7% (2023), 24.4% (2024), 22.9% (2025). Merck tags no operating income, so EBIT is pre-tax income plus interest expense (2025: 21,067 + 1,357); invested capital 75,444 (2024) and 93,974 (2025). — 2015-2025 · publ. September 2026 · source ↗
    Method: NOPAT (pre-tax income plus interest expense, times one minus the effective tax rate) divided by average operating invested capital (total assets less current liabilities less cash), from SEC EDGAR XBRL via a copy of tools_roic_edgar.py. Acquired research charged to expense depresses 2023 and will depress 2026; 2019-2020 combine restated continuing-operations earnings with pre-spin balance sheets.
  14. Moat Explorer calcThe ratio was between 6% and 12% from 2015 to 2020, when Keytruda was still growing into its position, and above 20% in every year since except 2023.
    Moat Explorer calculation from SEC EDGAR XBRL for CIK 310158: return on invested capital 6.9% (2015), 6.2% (2016), 7.0% (2017), 11.7% (2018), 12.0% (2019), 9.5% (2020), 20.1% (2021), 21.1% (2022), 2.7% (2023), 24.4% (2024), 22.9% (2025). Merck tags no operating income, so EBIT is pre-tax income plus interest expense (2025: 21,067 + 1,357); invested capital 75,444 (2024) and 93,974 (2025). — 2015-2025 · publ. September 2026 · source ↗
    Method: NOPAT (pre-tax income plus interest expense, times one minus the effective tax rate) divided by average operating invested capital (total assets less current liabilities less cash), from SEC EDGAR XBRL via a copy of tools_roic_edgar.py. Acquired research charged to expense depresses 2023 and will depress 2026; 2019-2020 combine restated continuing-operations earnings with pre-spin balance sheets.
  15. ReportedTotal assets were $136,866 million at the end of 2025, against $117,106 million a year earlier, and goodwill and other intangibles were $21,579 million and $26,681 million.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  16. Moat Explorer calcReturn on average equity was about 36.9% in 2025, flattered by the $5.1 billion of buybacks and $8.2 billion of dividends that kept equity from growing as fast as earnings.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ millions unless stated). Lines 2025: Keytruda 31,641 + Keytruda Qlex 40 = 31,681; other pharmaceutical 58,142 - 31,681 - 5,233 = 21,228; Animal Health 6,354; other revenue 515; total 31,681 + 5,233 + 21,228 + 6,354 + 515 = 65,011. 2024: 29,482; 57,400 - 29,482 - 8,583 = 19,335. 2023: 53,583 - 25,011 - 8,886 = 19,686. 2022: 52,005 - 20,937 - 6,897 = 24,171. 2021: 42,754 - 17,186 - 5,673 = 19,895. Everything else 2025: 65,011 - 31,681 = 33,330. Keytruda share of sales: 11,084 / 39,121 = 28.3% (2019, continuing basis); 17,186 / 48,704 = 35.3% (2021); 25,011 / 60,115 = 41.6% (2023); 31,681 / 65,011 = 48.7% (2025); Q2 2026 8,366 / 16,607 = 50.4%. Keytruda and Gardasil Q2 2026 (8,366 + 1,169) / 16,607 = 9,535 / 16,607 = 57.4%. Qlex 463 / 8,366 = 5.5%. Keytruda growth: 31,641 / 29,482 - 1 = 7.3% (2025); 29,482 / 25,011 - 1 = 17.9% (2024); 31,641 / 17,186 = 1.84, compound (1.84)^(1/4) - 1 = 16.5% a year; 31,641 / 11,084 = 2.85 (2019-2025). US share of Keytruda 18,829 / 31,641 = 59.5%. International Keytruda 12,812 / 11,610 - 1 = 10.4%; US Keytruda 18,829 / 17,872 - 1 = 5.4%. US Keytruda share of total sales 18,829 / 65,011 = 29.0%. Royalty: 2.5% x 31,681 = 792; 6.5% x 31,681 = 2,059. Gardasil US royalty 7% x 2,641 = 185. Winrevair royalty 22% x 1,443 = 317; 22% x 419 = 92; Winrevair Q2 2026 588 x 4 = 2,352, 22% x 2,352 = 517. Segment margins: Pharmaceutical 45,754 / 58,142 = 78.7% (2025); Q2 2026 11,612 / 14,760 = 78.7% (recast basis). Animal Health 2,131 / 6,354 = 33.5% (2025); 1,938 / 5,877 = 33.0% (2024); 1,737 / 5,625 = 30.9% (2023); 1,963 / 5,550 = 35.4% (2022); 1,950 / 5,568 = 35.0% (2021); Q2 2026 636 / 1,775 = 35.8%. Unallocated research 14,987 / 58,142 = 25.8%; Animal Health research 448 / 6,354 = 7.1%. Animal Health segment profit 2,131 / 45,754 = 4.7% of Pharmaceutical. Gardasil: international 2,592 / 6,158 - 1 = -57.9%; US 2,641 / 2,083 - 1 = 26.8%; share 5,233 / 65,011 = 8.0%; share of sales 2021 5,673 / 48,704 = 11.6%, 2022 6,897 / 59,283 = 11.6%, 2023 8,886 / 60,115 = 14.8%, 2024 8,583 / 64,168 = 13.4%; Q2 2026 1,169 x 4 = 4,676. Vaccines H1 2026 2,314 + 2,361 = 4,675; H1 2025 2,607 + 2,370 = 4,977; 4,675 / 4,977 - 1 = -6.1%. Childhood vaccines growth 2,368 / 2,241 - 1 = 5.7%; 2,485 / 2,368 - 1 = 4.9%; 2,451 / 2,485 - 1 = -1.4%. Pneumococcal: Pneumovax 166 / 893 - 1 = -81%; 825 + 759 + 166 = 1,750; 1,750 / 893 = 2.0; (825 + 759) / 166 = 9.5; Capvaxive + Vaxneuvance 759 + 825 = 1,584; 1,584 / 6,494 = 24.4% of Prevnar. Animal Health: livestock 3,896 / 6,354 = 61.3%; livestock growth 3,300 / 3,295 - 1 = 0.2%, 3,337 / 3,300 - 1 = 1.1%, 3,462 / 3,337 - 1 = 3.7%, 3,896 / 3,462 - 1 = 12.5%; companion 2,458 / 2,415 - 1 = 1.8%, 2,458 / 2,273 - 1 = 8.1%; companion excluding Bravecto 2,458 - 1,100 = 1,358; rest of Animal Health 6,354 - 1,100 = 5,254; Bravecto 359 / 335 - 1 = 7%. Segment 6,354 / 5,877 - 1 = 8.1%; 5,625 / 5,568 - 1 = 1.0%; Q2 2026 1,775 / 1,646 - 1 = 7.8%; compound (6,354 / 5,568)^(1/4) - 1 = 3.4% a year; share 6,354 / 65,011 = 9.8%; 6,354 / 31,681 = 0.20 of Keytruda; 6,354 / 9,467 = 67% of Zoetis; Zoetis 9,467 / 9,256 - 1 = 2.3%. Competitors: Keytruda 31,641 / Opdivo 10,049 = 3.1. Geography: US 36,510 / 65,011 = 56.2%; China 1,939 / 6,802 - 1 = -71%; China share 4,378 / 48,704 = 9.0% (2021), 6,802 / 60,115 = 11.3% (2023), 5,494 / 64,168 = 8.6% (2024), 1,939 / 65,011 = 3.0% (2025); other regions 65,011 - 36,510 - 14,580 - 2,711 - 1,939 = 9,271. Wholesaler receivables 22% + 21% + 13% = 56% (2025); 21 + 21 + 13 = 55 (2024); 21 + 20 + 14 = 55 (2023). Januvia and Janumet: 3,324 + 1,964 = 5,288 (2021); 2,189 + 1,177 = 3,366 (2023); 1,334 + 935 = 2,269 (2024); 1,604 + 940 = 2,544 (2025). Newer products Q2 2026: 588 + 271 + 204 + 184 = 1,247; 1,247 / 8,366 = 14.9%. Bridion 1,841 / 4 = 460 a quarter. Other pharmaceutical Q2 2026 14,760 - 8,366 - 1,169 = 5,225; Q2 2025 14,050 - 7,956 - 1,126 = 4,968; 5,225 / 4,968 - 1 = 5.2%; 2025 share 21,228 / 65,011 = 32.7%. Research: 30,531 / 60,115 = 50.8% of sales (2023). Charges 2026 9.0 + 5.7 = 14.7 bn; per share 3.62 + 2.31 = 5.93. Ohtuvayre 204 x 4 = 816; 12,100 / 816 = 14.8. Tax guidance midpoints (23.5 + 24.5) / 2 = 24.0; (35.0 + 36.0) / 2 = 35.5. Balance sheet: net debt end-2025 2,589 + 46,750 - 14,565 = 34,774; end-2024 2,649 + 34,462 - 13,242 - 447 = 23,422; end-2023 1,372 + 33,683 - 6,841 - 252 = 27,962; 30 June 2026 2,825 + 51,081 - 6,849 - 292 = 46,765, cash and short-term investments 6,849 + 292 = 7,141; net debt to equity 34,774 / 52,606 = 0.66; 46,765 / 41,933 = 1.1. Net income 2023-2025 365 + 17,117 + 18,254 = 35,736. Valuation: year-end 2025 market value 261.26 bn / net income 18.254 bn = 14.3; free cash flow 2025 16,472 - 4,112 = 12,360; 12,360 / 365,090 = 3.4%. Trailing twelve months to June 2026: sales 65,011 - 31,335 + 32,893 = 66,569; net income 18,254 - 9,506 - 5,575 = 3,173. EPS guidance midpoints (5.00 + 5.15) / 2 = 5.075; (5.04 + 5.16) / 2 = 5.10; (2.66 + 2.76) / 2 = 2.71. Protection from 2026: 2043 - 2026 = 17 years; 2028 - 2026 = 2 years. Year-end P/E = market value / net income: 147.55 / 4.442 = 33.2 (2015); 162.31 / 3.920 = 41.4 (2016); 153.30 / 2.394 = 64.0 (2017); 198.69 / 6.220 = 31.9 (2018); 231.56 / 9.843 = 23.5 (2019); 206.96 / 7.067 = 29.3 (2020); 193.59 / 13.049 = 14.8 (2021); 281.30 / 14.519 = 19.4 (2022); 276.26 / 0.365 = 757 (2023); 251.65 / 17.117 = 14.7 (2024); 261.26 / 18.254 = 14.3 (2025); 365.09 / 3.173 = 115.1 (TTM). Return on average equity 2025: 18,254 / ((52,606 + 46,313) / 2) = 18,254 / 49,460 = 36.9%. Gross profit 2025 65,011 - 16,382 = 48,629; 48,629 / 65,011 = 74.8%; royalty 792 / 16,382 = 4.8% of cost of sales. Keytruda increase 2021-2025 31,681 - 17,186 = 14,495; sales increase 65,011 - 48,704 = 16,307. US sales 36,510 / 28,480 - 1 = 28%. Pharmaceutical margin 2021 30,977 / 42,754 = 72.5%. Livestock less companion 3,295 - 2,273 = 1,022 (2021); 3,896 - 2,458 = 1,438 (2025). Prevnar 6,494 / Vaxneuvance 825 = 7.9. Animal Health 2025 6,354 against Keytruda franchise Q2 2026 8,366 - balance sheet, cash flow and valuation. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Merck's Forms 10-K and 10-Q, results releases, the Bristol Myers Squibb, Pfizer and Zoetis 10-Ks and market data; operands shown in the source line.
  17. ReportedReturn on average equity was about 36.9% in 2025, flattered by the $5.1 billion of buybacks and $8.2 billion of dividends that kept equity from growing as fast as earnings.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  18. ReportedMerck's diluted earnings were $1.56 a share in 2015 and $0.87 in 2017, a tax-reform year, before Keytruda had grown into its position; they were $6.74 in 2024 and $7.28 in 2025.
    Merck & Co. Form 10-K for fiscal 2019 - receivables concentration of the three largest wholesalers at the end of 2019. — FY2019 · publ. February 2020 · source ↗
  19. ReportedMerck's diluted earnings were $1.56 a share in 2015 and $0.87 in 2017, a tax-reform year, before Keytruda had grown into its position; they were $6.74 in 2024 and $7.28 in 2025.
    Merck & Co. Form 10-K for fiscal 2025 - Item 1 business: products, customers, segments and people. — FY2025 · publ. 24 February 2026 · source ↗
  20. ReportedDividends per share rose from $1.81 to $3.28 over the same years, a steadier line than earnings because the board pays from cash rather than from the accounting result.
    Merck & Co. Form 10-K for fiscal 2019 - receivables concentration of the three largest wholesalers at the end of 2019. — FY2019 · publ. February 2020 · source ↗
  21. ReportedDividends per share rose from $1.81 to $3.28 over the same years, a steadier line than earnings because the board pays from cash rather than from the accounting result.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
Sources
Generated September 25, 2026