Ken Griffin Stock Portfolio: 10 Stocks to Buy

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

Citadel Investment Group’s Stake: $799.6 million

Merck & Co., Inc. (NYSE:MRK) is a global healthcare leader operating through two primary segments: Pharmaceutical and Animal Health. The Pharmaceutical segment includes a broad array of human health products targeting areas like oncology, immunology, and neuroscience, with popular brands such as Keytruda, Gardasil, Winrevair, and Bravecto.

While investors remain wary about the future expiration of the Keytruda patent, Merck & Co., Inc. (NYSE:MRK) still has several years before it loses exclusivity on this blockbuster antibody. In the third quarter, Merck’s worldwide sales rose 4% year-over-year to $16.7 billion, with Keytruda sales increasing 17% (or 21% on a constant currency basis) to reach $7.4 billion.

On November 1, Leerink Partners maintained an Outperform rating on Merck & Co., Inc. (NYSE:MRK), noting investor caution around Gardasil’s recent performance. However, Merck’s management expressed confidence in Gardasil’s revenue potential, particularly as demand continues to grow in regions outside of China, reinforcing its role in Merck’s long-term growth strategy.

Oakmark Equity and Income Fund stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its Q3 2024 investor letter:

“Merck & Co., Inc. (NYSE:MRK) is a global pharmaceutical firm with leading oncology, vaccine and animal health franchises. Premier products in Merck’s portfolio include Keytruda, Gardasil, Winrevair and Bravecto. Outsized contributor Keytruda is an immuno-oncology drug that treats several cancers and tumors. Keytruda is an astounding clinical and commercial success that is on track to become one of the best-selling prescription drugs to date. Investor angst surrounding Keytruda’s pending U.S. patent expiration in 2028 presented a chance to buy shares at a discounted valuation. We believe opportunities to extend Keytruda’s duration through life cycle management are underappreciated. More importantly, discounted cash flows from products already on market cover today’s entire stock price, meaning there is minimal value ascribed to a promising pipeline with strong sales potential. We believe Merck is led by a capable management team that looks to reinvest these cash flows in an accretive manner.”