Jim Cramer’s Latest Game Plan: 20 Stocks to Watch

9. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 96

Merck & Co., Inc. (NYSE:MRK) will release its third-quarter earnings on October 31. Calling the stock too low, Cramer said:

“We get two drug stocks on Thursday too. We get Merck and Bristol Myers. This group has been castigated as the wrong place to be when the Fed’s cutting rates, the hedge fund playbook says that. I think both stocks are too low but I also know that if we get a weak employment on Friday, Merck and Bristol Myers will be two stocks that you should not have bought. So put that in a little retrospect.”

Merck (NYSE:MRK) is a prominent global healthcare company engaged in the development and marketing of a diverse range of pharmaceutical products aimed at improving human health, including treatments in areas such as oncology, vaccines, and various therapeutic fields. Among its portfolio, Keytruda stands out as the most significant product.

This cancer treatment has received approval for numerous indications and became the best-selling medicine globally in 2023, generating $25 billion in sales, which represented approximately 41.5% of the company’s total revenue. However, the U.S. patent exclusivity for Keytruda is set to expire in 2028, a critical date for the company. In response to this impending loss, the company is actively working on a subcutaneous formulation of Keytruda, targeting an estimated 50% of the patient population projected for the drug by 2028.

Furthermore, on October 23, Merck (NYSE:MRK) announced the acquisition of Modifi Biosciences for up to $1.3 billion. Modifi Biosciences is recognized for its pioneering work in the field of direct DNA modification, particularly in the development of cancer therapeutics.