Merck & Co., Inc. (MRK) Business Profile

What it does

Merck & Co. is a global health care company that sells prescription medicines, vaccines and animal health products. Founded in 1891, it is headquartered in Rahway and led by Chairman, President and Chief Executive Officer Robert M. Davis.

Its human health business includes medicines for cancer, pulmonary arterial hypertension, diabetes, infections and other conditions. Keytruda, its cancer therapy, is given intravenously; Keytruda Qlex combines the same active cancer medicine with an ingredient that enables an injection under the skin. Merck also sells vaccines, including Gardasil for diseases caused by certain types of human papillomavirus, or HPV.

Merck sells medicines primarily to wholesalers and retailers, hospitals, government agencies and organizations that manage health care. Vaccine customers include physicians, distributors and governments. Patients may receive its products through these intermediaries rather than buying directly from Merck.

The animal health business develops, manufactures and markets medicines and vaccines for livestock and companion animals. It also sells services and connected products used to identify, track and monitor animals. Its customers include veterinarians, distributors, animal producers, farmers and pet owners.

Merck had 75,000 employees in FY2025.

How it makes money

Merck earns revenue primarily by selling medicines, vaccines and animal health products. It manages its operations in two reportable segments: Pharmaceutical and Animal Health. Pharmaceutical includes prescription treatments and preventive vaccines for people; Animal Health includes products and services for livestock and companion animals.

Worldwide sales were $65.0 billion in 2025; total company revenues were $18.1 billion in the third quarter of 2026.

Keytruda is approved for certain patients across a range of cancers, both on its own and in combinations with other treatments. The Keytruda family generated $8.6 billion in third-quarter 2026 sales, including $830 million from Keytruda Qlex. Other products include Gardasil vaccines, Winrevair for pulmonary arterial hypertension and medicines for diabetes. Gardasil sales were $2 billion in the third quarter of 2026.

Animal Health sells livestock medicines and vaccines alongside companion animal products such as Bravecto, a line of parasite-control treatments. It also offers identification, traceability and monitoring products.

Merck also earns alliance revenue from products including Lynparza and Lenvima. Its alliance revenue is its share of profits after product sales are reduced by cost of sales and commercialization costs. Separately, other revenue includes third-party manufacturing arrangements and revenue hedging activities.

Prices and market access are affected by negotiations, government programs and cost-containment measures. Merck provides specified rebates for medicines reimbursed by Medicaid and discounts to certain U.S. government entities.

Customers and how it sells

For prescription medicines, Merck sells primarily to drug wholesalers and retailers, hospitals, government agencies and managed health care providers, including pharmacy benefit managers. Its human vaccine customers include physicians, wholesalers, distributors and government entities. These channels connect Merck’s products to patients and the organizations that pay for their care.

Animal Health sells to veterinarians, distributors, animal producers, farmers and pet owners. Its products cover both livestock and companion animals, with offerings ranging from vaccines and medicines to connected identification and monitoring systems.

Merck operates globally, and its operations outside the U.S. are significant. Products and their permitted uses vary by market: for example, Keytruda Qlex is marketed as Keytruda SC in some countries. Merck has said it will not supply the subcutaneous product in Italy, Denmark, the Netherlands, France, Belgium and Ireland for now, following a Dutch court ruling. It said the UK was not challenged by that injunction and that it was waiting to launch in Japan and China.

Governments and other payers also influence access. Merck is negotiating with payers over access to LipFendra, its cholesterol treatment, and uses sampling and coupon programs that it says will affect near-term revenue.

Suppliers and costs

Merck develops and manufactures pharmaceutical and vaccine products, while its Animal Health segment discovers, develops, manufactures and markets veterinary products. Developing, testing and manufacturing biologics and vaccines is a long, complex and expensive process, with potential limits on access to biological materials.

The company also obtains products and research assets through acquisitions, licenses and collaborations. It has a license agreement with Alteogen under which certain sales-based milestone payments depend on achieving the corresponding milestones. Merck’s purchase obligations include goods and services, minimum inventory contracts, research and development, and advertising. At December 31, 2025, total purchase obligations were $6.5 billion.

In the third quarter of 2026, non-GAAP operating expenses were $7.4 billion. They reflected investment in product launches and early- and late-stage research, partly offset by optimization efforts and external funding recognized for SAC-TMT development. The quarter also included a $400 million upfront charge for a license agreement with CyBranch.

Merck’s cash used in investing activities in 2025 included acquisition spending and capital expenditures. Operating cash flow is its primary source of funds for operating needs.

Competitive position

Merck competes with research-based pharmaceutical companies, smaller specialist research companies, generic drug manufacturers and animal health companies. The individually named companies in the available business descriptions are identified as collaborators or transaction counterparties, not as specific competitors. Merck develops and commercializes Lynparza with AstraZeneca and is developing an individualized cancer therapy with Moderna.

Competition can come from new medicines, competing combinations, clinical findings and lower-cost generic or biosimilar versions as products mature. In animal health, product quality and price, innovation, promotion and generic introductions all affect competition. Merck says competitors can also challenge patent rights, with uncertain outcomes.

Our reading: Patent protection is an important but time-limited source of competitive protection: Merck depends on it, and sales generally fall significantly and rapidly when products lose exclusivity. It was reported on 29 October 2026 that Keytruda’s U.S. compound patent expires in December 2028.

Our reading: Keytruda’s approvals across many cancer uses and the availability of an under-the-skin formulation support Merck’s position, but competing products and patent disputes can still displace sales. Merck has said an injunction affecting the subcutaneous formulation remains in place in parts of Europe pending a hearing.

Our reading: Research and external collaborations give Merck multiple ways to develop future products, but their competitive value depends on clinical results, approvals and commercialization.

Growth opportunities

Merck’s growth plans include expanding the uses and reach of its existing medicines, launching newer products and advancing research candidates. In 2025, it launched Keytruda Qlex in the U.S., Enflonsia for prevention of RSV lower respiratory tract disease in certain infants, and an expanded U.S. indication for Winrevair in pulmonary arterial hypertension.

In oncology, Merck is studying Keytruda and Keytruda Qlex in additional trials and developing other medicines across immune-oncology, precision molecular targeting and tissue targeting. Merck reported that sacituzumab tirumotecan, or SAC-TMT, improved median overall survival by nearly seven months versus chemotherapy in a study of endometrial cancer. It also reported improved recurrence-free and distant metastasis-free survival for intismeran plus Keytruda versus Keytruda alone in certain patients with resected melanoma.

Outside oncology, the company is developing treatments and vaccines across cardiovascular disease, infectious diseases and other areas. It has launched the cholesterol treatment LipFendra and said that most prescriptions came from patients already on other lipid-lowering therapies, rather than people switching from injectable PCSK9 medicines. Merck expects broad access to take time.

Acquisitions and licenses add to internal research. The acquisition of Verona Pharma brought Ohtuvayre, a treatment for chronic obstructive pulmonary disease, while the acquisition of Cidara added an investigational influenza-prevention candidate. Merck also expects new product launches and animal health to contribute to growth in 2027, partly offset by generic competition and loss of exclusivity.

Structural risks

• Patent and exclusivity loss: Merck depends on patent rights, which competitors can challenge. When products lose market exclusivity, the company generally experiences a significant and rapid loss of sales. Merck expects more than $2 billion of 2027 headwinds from generic competition and loss of exclusivity affecting Bridion, the Januvia family and Adempas.
• Product development: Candidates may fail because of ineffective results, harmful side effects, competing products, manufacturing economics or failure to obtain regulatory approval or adequate reimbursement. Even approved products can face recalls, changes in indications or loss of approval.
• Pricing and access: Managed care organizations, governments and other payers put pressure on prices and margins. Government cost-reduction measures negatively affected Merck’s 2025 sales, and the company expects such actions to continue to affect sales and profits.
• Manufacturing and supply: Biologics and vaccines are complex to develop, test and manufacture. Access to biological materials can be limited, and regulatory requirements can restrict the ability to manufacture or sell products in particular markets.
• International operations: Merck faces foreign-exchange fluctuations, tariffs, trade restrictions, differing regulatory requirements and weaker intellectual-property protection in some countries. A European injunction has also affected supply of the subcutaneous Keytruda formulation in several markets.

Bottom line

Our reading

Our reading: Merck is a research-driven medicines and vaccines business with a separate animal health operation, but Keytruda is central to its current sales. Its future depends on translating launches, acquisitions and clinical programs into revenue while managing patent expiry, generic competition and payer pressure. Animal health and a broader pipeline provide other sources of business, although neither removes the uncertainty around replacing sales lost to exclusivity expiry.