Merck and the Keytruda Patent Cliff (Patreon)

What's Happening With Merck?

Merck makes one of the world’s top cancer drugs, Keytruda. It brought in $29.5 billion in sales last year alone — it’s that big. But here’s the problem:

In 2028, the patent protecting Keytruda will expire.

That means other companies will be allowed to make the same drug (called generics or biosimilars) and sell it at a much lower price. Merck will lose its exclusive rights — and likely, a huge chunk of revenue.

Fun to see how ATR Performs for Biotechs on the Monthly :D

Why Is This a Big Deal?

This type of patent expiration is often called a "patent cliff" — a point where a company suddenly loses its cash cow. Merck’s stock has already dropped 35% in the past year, largely because investors are worried about how it will replace all that lost money.

One analyst bluntly put it:

“Merck has a massive hole in its revenue. One new drug won’t be enough to fill it.”

How Is Merck Responding?

Merck is trying to soften the blow. It’s reportedly close to buying a UK biotech company (Verona Pharma) for $10 billion. That company makes a lung disease drug that might eventually bring in around $4 billion a year.

That helps — but it still falls short of replacing nearly $30 billion from Keytruda.

Not Just Merck

Other big pharma companies like Pfizer and Bristol Myers Squibb also face big patent losses around 2027–2028. Industry-wide, about $180 billion in annual drug sales are at risk during that period.