Shares jumped 5.6% to $148.79 after Merck posted third-quarter results that blew past Wall Street forecasts, raising a critical question: whether the company's newer medicines can grow fast enough to replace its blockbuster cancer drug before cheaper copies hit the market in 2028.

  • The Beat Was Bigger Than It Looks — and Partly Borrowed. Merck's adjusted earnings of $2.49 per share beat the consensus estimate of $2.09 by $0.40, a 19.1% surprise.

The company raised its full-year revenue forecast to $66.8–$67.3 billion

and lifted adjusted EPS guidance to $2.77–$2.82, up from $2.66–$2.76. But investors should note a caveat: CFO Caroline Litchfield disclosed that Q3 revenues benefited from roughly $550 million in favorable customer purchase timing — $200 million tied to Keytruda, $50 million to Winrevair, and $300 million to vaccines — dollars essentially pulled forward from future quarters.

  • The Subcutaneous Keytruda Bet Is Working — For Now. Keytruda, Merck's flagship cancer immunotherapy, generated $8.6 billion in the quarter, up 6%. Crucially, the newer under-the-skin injectable version contributed $830 million , nearly doubling from Q2's $463 million. This matters enormously because the original IV version's U.S. patent expires in 2028 , and the subcutaneous formulation's patents could extend exclusivity into 2042 — 14 years beyond the original expiration. Every patient converted to the new formulation is a patient shielded from future generic competition.

  • Winrevair Is Merck's Most Important Non-Cancer Story. Winrevair, a treatment for pulmonary arterial hypertension — a rare, life-threatening lung condition — surged 94% to $694 million.

Merck is also expanding it into heart failure, with Phase 3 development underway. At its current trajectory, Winrevair is on pace for roughly $2.8 billion annualized — meaningful, but still a fraction of Keytruda's run rate.

  • The Clock Is Still Ticking on 2028. Keytruda generated $29.5 billion in 2024 , and without the subcutaneous reformulation, Merck faces an estimated 80% revenue erosion on its flagship product. Today's results show the transition strategy is gaining traction, but the math remains daunting. The stock's rally prices in execution confidence; any stumble in the subcutaneous conversion or pipeline trials could quickly reverse the sentiment.