Merck Shares Climb on European Approval of Subcutaneous Keytruda
New under-the-skin formulation of the blockbuster cancer drug aims to enhance patient convenience and defend market share ahead of patent expirations.
Shares of Merck & Co. surged nearly 4% in early trading Tuesday after the pharmaceutical giant announced it had secured approval from the European Commission for a subcutaneous, or under-the-skin, formulation of its blockbuster cancer therapy, Keytruda.
The approval covers all 33 of Keytruda's currently approved adult indications in the European Union, marking a significant strategic victory for Merck as it works to fortify the franchise of its top-selling drug. The new formulation allows the immunotherapy to be administered in a matter of minutes, a stark contrast to the lengthy intravenous infusions previously required.
Merck's stock (NYSE: MRK) rose $3.57 to $96.43 in morning trading, pushing its market capitalization above $240 billion. The move reflects investor optimism that a more convenient version of the drug can help defend its dominant market position against emerging competition and biosimilar threats expected after its main patents expire around 2028.
This European approval follows a similar nod from the U.S. Food and Drug Administration earlier this year for a subcutaneous version of the treatment. For patients and healthcare providers, the new delivery method represents a substantial improvement in convenience and efficiency. According to the company's announcement, the under-the-skin injection drastically reduces administration time, freeing up valuable resources in oncology clinics and offering patients a less burdensome treatment experience.
"The European Commission's approval of a subcutaneous formulation of Keytruda marks a pivotal milestone in cancer care for the region," said Dr. Eliav Barr, president of Merck Research Laboratories, in a statement. "This new option has the potential to make a meaningful difference in the lives of patients and their families."
Keytruda, an immune checkpoint inhibitor that works by helping the body's immune system detect and fight cancer cells, is a cornerstone of Merck’s portfolio, generating a significant portion of its revenue. Its success has transformed treatment paradigms across numerous cancers, including lung cancer, melanoma, and bladder cancer.
The strategic importance of this subcutaneous version cannot be overstated. With Keytruda's primary patents nearing expiration toward the end of the decade, several competitors are actively developing biosimilar versions of the drug. By introducing a new, more convenient formulation with its own patent protection, Merck is building a defensive moat to retain patients and market share long after the original intravenous version faces generic competition. Analysts have noted that this life-cycle management strategy is critical for the company's long-term revenue stability.
The approval from the European Commission was based on data from pivotal clinical trials that demonstrated the subcutaneous version's efficacy and safety were comparable to the intravenous formulation. Market analysts widely anticipated the positive decision after the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion in September.
Looking ahead, Merck's ability to transition a significant portion of its existing patient base to the new formulation will be a key focus for investors. The successful rollout in two of the world's largest pharmaceutical markets—the U.S. and Europe—positions the company to solidify Keytruda's legacy and financial contribution for years to come, even as the oncology landscape grows increasingly competitive.