UBS’ Best Stocks In The AI, Growth & Low Rates Era: Top 29 US Stocks

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

Number of Hedge Fund Investors In Q2 2024: 96

UBS’ Sector Rating: Neutral

Sector: Healthcare

Merck & Co., Inc. (NYSE:MRK) is one of the largest pharmaceutical companies in the world. The firm enjoys considerable resources which have enabled it to establish a foothold in the high-end cancer drug market. Merck & Co., Inc.’s (NYSE:MRK) resources of $7 billion in cash and $10 billion in receivables which are a part of its $96 billion in total assets allow it to make and sell drugs such as KEYTRUDA. KEYTRUDA is Merck & Co., Inc.’s (NYSE:MRK) blockbuster cancer drug and it brought in a whopping $7.3 billion in sales in Q2. Over its lifetime, it is expected to be the most valuable drug in the world and generate $33 billion in sales in 2027 according to FactSet. However, Merck & Co., Inc.’s (NYSE:MRK) patent is set to expire in 2028, which could create headwinds. Consequently, along with KEYTRUDA, the firm’s other drugs, and its research portfolio play a key role in its hypothesis. On these fronts, Merck & Co., Inc. (NYSE:MRK) has acquired a cancer antibody for $750 million and it also focusing on its HPV vaccine GARDASIL.

Baron Funds mentioned Merck & Co., Inc. (NYSE:MRK) in its Q1 2024 investor letter. Here is what the fund said:

“Global pharmaceutical company Merck & Co., Inc. contributed on the continued growth of Keytruda, the company’s key asset and the leading immuno-oncology agent used to treat a variety of cancers. The FDA’s late March approval of pulmonary arterial hypertension drug sotatercept, also drove share gains. We retain conviction as Merck has started to transition from prioritizing its Keytruda franchise to building a more diversified business, with a focus on the Gardasil vaccine, pneumococcal vaccine development, and cardiovascular drug development, well in advance of the scheduled expiration of patent protection/exclusivity rights.”