⚠ Write-Downs After the PurchaseModerate threat

Merck & Co. (MRK) — threat to the moat

Merck has written down $2.5 billion of acquired research in two years, and its largest 2023 purchase has yet to produce a sale.

Buying late-stage science does not guarantee a product. Merck recorded impairment charges of $1.7 billion in 2022, related to nemtabrutinib, and $779 million in 2023, related to gefapixant1. Each was an asset the company had valued highly.

Impairments of acquired research ($M)1,7002022 nemtabrutinib7792023 gefapixantMerck Form 10-K FY2023
Bought science can fail.

The 2023 acquisitions carry the same risk on a larger scale. Prometheus cost $11.0 billion2. Unlike Acceleron, which produced Winrevair, the Prometheus drug has yet to reach the market in Merck's reported sales.

Because Merck expensed most of the 2023 purchase immediately, a later failure would not create a large write-down; the money has already been charged. The damage would be to the replacement plan, not to future earnings.

The 2023 accounts also carried a legal charge. Merck recorded $573 million for the settlement of the Zetia antitrust litigation in 20233, another reason that year's earnings were so low.

The measure is the number of acquired programmes that reach approval before the Keytruda cliff. If Prometheus's lead drug fails in late-stage trials, Merck will have spent $10.2 billion4 of research money on nothing.

References
  1. ReportedMerck recorded impairment charges of $1.7 billion in 2022, related to nemtabrutinib, and $779 million in 2023, related to gefapixant.
    Merck & Co. Form 10-K for fiscal 2023 - product sales for 2021-2023, the Prometheus, Daiichi Sankyo and Imago charges, impairments, receivables concentration and the Zhifei distribution arrangement in China. — FY2023 · publ. February 2024 · source ↗
  2. ReportedPrometheus cost $11.0 billion.
    Merck & Co. Form 10-K for fiscal 2023 - product sales for 2021-2023, the Prometheus, Daiichi Sankyo and Imago charges, impairments, receivables concentration and the Zhifei distribution arrangement in China. — FY2023 · publ. February 2024 · source ↗
  3. ReportedMerck recorded $573 million for the settlement of the Zetia antitrust litigation in 2023, another reason that year's earnings were so low.
    Merck & Co. Form 10-K for fiscal 2025 - Item 1A risk factors, patents and exclusivity, government pricing, vaccine policy and legal proceedings. — FY2025 · publ. 24 February 2026 · source ↗
  4. ReportedIf Prometheus's lead drug fails in late-stage trials, Merck will have spent $10.2 billion of research money on nothing.
    Merck & Co. Form 10-K for fiscal 2023 - product sales for 2021-2023, the Prometheus, Daiichi Sankyo and Imago charges, impairments, receivables concentration and the Zhifei distribution arrangement in China. — FY2023 · publ. February 2024 · source ↗
Sources
Generated September 25, 2026