The new story of Merck & Co., Inc. (MRK.US)

Merck & Co., Inc. (MRK.US) has made changes, announcing a restructuring of its pharmaceutical business organization and confirming new business leaders. The organizational restructuring is superficially a realignment of business lines, but in reality, it is in response to the impending patent cliff of Keytruda and to defend its position as the "king of oncology". Announcement of Key Changes Originally, Merck & Co., Inc.'s organizational structure was divided into two main segments: Human Health (pharmaceutical business) and Animal Health. The Human Health business included oncology, vaccines, hospital emergency care, cardiovascular metabolism and respiratory, virology, neuroscience, immunology, metabolism, and other 9 sub-segments. Now, Merck & Co., Inc. has adjusted the organizational structure of the Human Health business, integrating the disparate business lines into two strategic clusters: oncology and specialty drugs, and generics and infectious diseases. This means that Merck & Co., Inc. is reshaping its market competitiveness through resource focus and synergies. The new round of organizational restructuring marks a new stage in the intensive management of Merck & Co., Inc.'s Human Health business, focusing on optimizing operational efficiency by merging similar businesses and refocusing on the deep optimization of the business portfolio and core competitiveness. For example, Merck & Co., Inc. has categorized the pulmonary arterial hypertension drug Winrevair and the diabetes drug JANUVIA/JANUMET into the division of specialty drugs, generics, and infectious diseases. This department is also responsible for the vaccine business. By 2025, the JANUVIA/JANUMET series and the rapidly growing Winrevair and 21-valent pneumonia combination vaccine Capvaxive are expected to contribute a total of $4.746 billion in revenue, serving as a powerful weapon to address the Keytruda patent cliff. This organizational restructuring is not just a simple departmental merger, but a strategic purification of existing business assets, reshaping the original business segments into more competitive strategic units. Complementing the "big changes" in the organizational structure, Merck & Co., Inc. has also made precise moves in the senior management level to ensure that professionals are in charge of their respective areas. On one hand, Jannie Oosthuizen, who previously led Merck & Co., Inc.'s Human Health market in the country, has been promoted to Executive Vice President and President of the Oncology Business and International Business. With the new architecture making "oncology" a standalone core engine, Jannie Oosthuizen, with her rich experience in marketing, has taken on the dual tasks of defending the base of Keytruda and replicating the success of the U.S. market globally to accelerate the global expansion of the oncology division. On the other hand, Merck & Co., Inc. has recruited Brian Foard from competitor Sanofi to lead the specialty drugs, generics, and infectious diseases business. The brilliance of this arrangement lies in "integration": previously Merck & Co., Inc.'s vaccine, hospital emergency care, cardiovascular metabolism, and other businesses operated independently, but Brian Foard oversaw multiple areas such as immunology, neuroscience, oncology, and rare diseases at Sanofi, demonstrating a cross-therapy coordination capability that is crucial for Merck & Co., Inc. at the present. In addition to the changes in business lines, Merck & Co., Inc. has established a new "strategic hub" - a Strategic Access, Policy, and Communication department, led by former Chief Marketing Officer Chirfi Guindo as Executive Vice President. This reveals Merck & Co., Inc.'s deep consideration: in order to address the Keytruda patent cliff, it is not enough to adjust the business structure alone. It is necessary to ensure that access, policy, communication, and sustainable development work together to tackle the complex global payment environment, especially the U.S. drug pricing reform, in order to clear external obstacles for the global expansion in the post-Keytruda era. Defensive Battle of the "Oncology King" In the new organizational structure, Merck & Co., Inc. has made "oncology" a standalone core engine, primarily because the oncology business is its revenue pillar and "cash cow" business. By 2025, Merck & Co., Inc.'s oncology business achieved revenues of $35.425 billion, maintaining steady growth (8% year-on-year) and accounting for 61% of the company's pharmaceutical revenue. In particular, Merck & Co., Inc. sits securely at the top of the global pharmaceutical giants' oncology revenue rankings in 2025, with an absolute advantage, becoming the only pharmaceutical company to surpass the $30 billion mark in oncology revenue annually. However, Merck & Co., Inc.'s position as the "oncology king" is under challenge. On one hand, the upcoming patent cliff for Keytruda, the former "global drug king," is approaching. Keytruda has contributed nearly 90% of Merck & Co., Inc.'s oncology business income and nearly half of the company's total revenue (48.73%). Even if Keytruda reaches its projected peak value of $35 billion in 2028, its sales growth has gradually slowed down, achieving $31.68 billion in sales in 2025, with a 7% year-on-year growth, falling below double digits for the first time. On the other hand, competitors are closely following behind. Astrazeneca PLC Sponsored ADR and Johnson & Johnson ranked second and third in global pharmaceutical giants' oncology business revenue in 2025, achieving revenues of $25.619 billion (+14%) and $25.38 billion (+22%) respectively, both realizing double-digit growth. In particular, Astrazeneca PLC Sponsored ADR's oncology revenue structure is relatively balanced, with the top two earners, Osimertinib and Durvalumab, achieving revenues of $7.254 billion and $6.063 billion, respectively. Olaparib, Acalabrutinib, and Enhertu (fam-trastuzumab deruxtecan) contribute revenues of over $2.7 billion each, with all products maintaining double-digit growth except Olaparib. Looking at Merck & Co., Inc., the oncology performance is still heavily dependent on Keytruda, as well as the alliance revenue contributions of Lynparza and Lenvima, two "blockbuster drugs." In addition, the rare disease drug Welireg for late-stage kidney cancer achieved a revenue growth of 41% to $716 million in 2025, showing potential to become a "blockbuster drug"; Reblozyl for the treatment of myelodysplastic syndromes (MDS) contributed alliance revenue of $525 million. In order to maintain its leading position in the oncology field, Merck & Co., Inc. is adopting a strategy of attacking and defending, launching a deep defensive battle around the "Keytruda lifecycle": changing the formulation of Keytruda and expanding indications, as well as building a moat through combination therapy strategies, including combination with ADC drugs, KRAS G12C inhibitors, mRNA tumor vaccines, etc. In the ADC field, Merck & Co., Inc. has built a rich pipeline of ADC products, targeting Nectin-4, TROP2, B7H3, HER3, Claudin18.2, and other targets, with promising potential for K-drug + ADC combination regimens currently under development. Future Growth Prospects In addition to oncology, Merck & Co., Inc. is also strategically positioning itself in non-oncology battlegrounds to lay the foundation for growth in the post-Keytruda era. Previously, at the 2026 JPM Conference, Merck & Co., Inc. stated: "Expecting revenue to exceed $70 billion driven by new drugs by 2030, with ten projects including Winrevair, MK-1406, Ifinatamab deruxtecan contributing 70% of the target revenue." Winrevair, acquired by Merck & Co., Inc. for $11.5 billion from Acceleron for a pulmonary arterial hypertension (PAH) drug, was approved by the FDA in March 2024 and sold $1.443 billion in 2025, quickly becoming a "blockbuster drug" in just two years. Currently, Winrevair has multiple clinical trials in progress, including for the treatment of pulmonary hypertension caused by preserved ejection fraction heart failure (HFpEF) and combined pre- and post-capillary pulmonary hypertension (CpcPH). Analysts predict that Winrevair's peak sales could exceed $5 billion. In the new organizational structure, Merck & Co., Inc. has made "infectious diseases" a standalone core engine, indicating its focus on the infectious disease field. Currently, Merck & Co., Inc.'s most promising infectious disease drug is the potential first-in-class long-acting antiviral drug MK-1406 (CD388), with analysts predicting the drug's peak annual sales could exceed $5 billion. MK-1406 was acquired by Merck & Co., Inc. for $9.2 billion from Cidara Therapeutics in November 2025, designed to prevent influenza A and B, with the potential for prophylactic use once per season. It is currently undergoing Phase III studies for preventing influenza complications. According to the positive headline results from the 2b NAVIGATE clinical trial, a single injection of CD388 for unvaccinated adults prevented symptomatic influenza for 24 weeks compared to placebo, with a protection rate of 76% and good tolerability with no safety issues observed. Merck & Co., Inc. stated that MK-1406 is expected to be an important growth driver in the next decade and expands and complements the company's respiratory product portfolio and R&D pipeline. In the respiratory field, Merck & Co., Inc. also acquired Verona Pharma for $10 billion, obtaining the world's first PDE3/4 inhibitor Ensifentrine for the treatment of chronic obstructive pulmonary disease (COPD). It is estimated that globally, there are 390 million people living with COPD. As the first novel inhaled mechanism drug for treating COPD in over 20 years, Ensifentrine has tremendous commercial potential. Analysts predict that Ensifentrine's peak sales can reach $4 billion. In addition, Merck & Co., Inc. has other potential major drugs, including the TL1A monoclonal antibody PRA023, the long-acting RSV monoclonal antibody Clesrovimab (MK-1654), the personalized neoantigen tumor vaccine mRNA-4157/V940, the oral cyclopeptide PCSK9 inhibitor Enlicitide (MK-0616), and the novel LSD1 inhibitor Bomdemstat. Conclusion Through this extensive organizational change, Merck & Co., Inc. has completed a thorough evolution from the inside out, seeking to achieve a smooth transition between old and new dynamics. With a dual drive to "defend the oncology base" and "cultivate non-oncology growth curves," Merck & Co., Inc.'s future growth story will no longer be just about Keytruda.