Most people looking at Merck & Co right now see a ticking clock. It’s 2026, and the industry is obsessed with one date: 2028. That is when Keytruda, the cancer-fighting juggernaut that basically prints money for the New Jersey-based giant, starts losing its patent protection. If you’re a shareholder, that’s terrifying. Keytruda isn’t just a drug; it’s a pillar that holds up nearly half of the company's entire revenue.
But if you sit down with Robert M. Davis, the current Merck and Co CEO, you won’t find a man panicking. Honestly, he sounds like someone who has already solved the puzzle. At the J.P. Morgan Healthcare Conference this January, Davis didn't just acknowledge the "patent cliff"—he tried to move the goalposts entirely. He’s now projecting a massive $70 billion commercial opportunity by the mid-2030s.
That’s a bold claim. It’s also about double what Keytruda is expected to make at its peak. So, how does a "finance guy" turned CEO plan to pull off the biggest magic trick in pharma history?
The Rob Davis Era: Not Your Typical Pharma Boss
When Davis took over from the legendary Ken Frazier in 2021, some purists were skeptical. Frazier was a lawyer who became a moral compass for the industry. Davis? He was the former CFO. People figured he’d be all about spreadsheets and cost-cutting.
They were wrong.
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Davis has turned out to be one of the most aggressive deal-makers in the business. Since he stepped into the role, he’s been on a shopping spree, but not the kind where you just buy big companies to get bigger. He calls it "disciplined" business development. Basically, he looks for "compelling science" that most people haven't noticed yet.
Take the $9.2 billion acquisition of Cidara Therapeutics that just closed this month. It’s a huge bet on a long-acting flu prevention drug called CD388. It’s not a vaccine. It’s an antiviral that could protect high-risk people for an entire season. It’s risky, it’s expensive, and it’s exactly the kind of move Davis makes to diversify the portfolio away from oncology.
Breaking the Keytruda Dependency
You can't talk about the Merck and Co CEO without talking about the "Sub-Q" strategy. To blunt the impact of biosimilars (the generic versions of biologics), Merck launched Keytruda Qlex. It’s a subcutaneous version of the drug that was approved back in September 2025.
Why does this matter?
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- Patient Comfort: Instead of sitting in a chair for an IV infusion, patients get a quick injection.
- Patent Life: The new formulation comes with its own set of patents that stretch way beyond the 2028 cliff.
- Market Share: It makes it much harder for generic competitors to steal patients who are already used to the convenience of the shot.
Why 2026 is the "De-risking" Year
We’re currently in what Davis calls the "clinical de-risking" phase. Merck has something like 80 Phase 3 trials running right now. That is an insane amount of late-stage data.
Davis told investors recently that about ten specific products will make up 70% of that $70 billion growth target. He’s looking at things like Winrevair for pulmonary arterial hypertension and Enflonsia, their new RSV shot for infants. These aren't just "me-too" drugs. They are often first-in-class molecules.
The $70 Billion Breakdown
It’s not just about one blockbuster anymore. The strategy is split roughly 50-50 between internal R&D and external acquisitions.
- Cardiometabolic: They are moving fast into heart health.
- Immunology: Trying to catch up to peers like AbbVie.
- Animal Health: Often overlooked, but it’s a steady, high-margin business that doesn't deal with the same "patent cliff" drama as human meds.
What Most People Get Wrong About the Transition
There is often confusion between "Merck & Co" (the US giant) and "Merck KGaA" (the German company). Interestingly, both are going through CEO transitions or strategy shifts right now. While Rob Davis is steering the US ship, the German Merck just announced that Kai Beckmann will take over as their CEO in May 2026.
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For the US-based Merck and Co, the challenge is purely about execution. Davis has the cash. He has the pipeline. Now, he just needs the FDA to say "yes" to those 80 trials.
Actionable Insights for Investors and Observers
If you’re watching Merck this year, don't just stare at the quarterly earnings. Those are "rear-view mirror" metrics. Instead, focus on these three things:
- Phase 3 Readouts: Follow the data for islatravir (their HIV candidate) and the various Keytruda combinations. These are the bricks that will build the post-2028 wall.
- M&A Pace: Davis has hinted he isn't done. If interest rates stabilize, expect more mid-sized biotech buyouts in the $5B to $10B range.
- Manufacturing Shifts: Merck is moving more production back to the US to avoid supply chain shocks. This is a long-term play for "resilience" that might hurt margins slightly now but protects them from global chaos later.
The Merck and Co CEO has spent the last five years preparing for a storm that everyone else thinks will sink the ship. But if his $70 billion math is even half right, Merck won't just survive 2028—it might actually come out bigger on the other side.