Merck's Cardiovascular Pipeline: A New Dawn for Growth Amid Keytruda's Decline

Merck ($MRK) faces a looming challenge: its blockbuster cancer drug Keytruda is projected to lose exclusivity in 2028, threatening a revenue stream that accounted for nearly $20 billion in sales in 2023. To offset this decline, Merck is betting big on its emerging cardiovascular pipeline, centered on MK-0616—an oral PCSK9 inhibitor poised to transform the $14 billion cholesterol-lowering market—and bolstered by its $11.5 billion acquisition of Acceleron. This pipeline, if successful, could not only replace Keytruda's lost revenue but also establish Merck as a leader in cardiovascular therapeutics.

MK-0616: A Game-Changer for PCSK9 Therapies

The star of Merck's cardiovascular push is MK-0616, an oral PCSK9 inhibitor in Phase 3 trials targeting hypercholesterolemia. Unlike existing injectable PCSK9 inhibitors like Amgen's Repatha or Sanofi's Praluent, MK-0616's pill form offers unparalleled convenience. Phase 2 data demonstrated robust efficacy: the highest dose (30 mg) reduced LDL-C by 60.9% at week 8, outperforming statins alone and matching the LDL-C reductions seen with injectables. Crucially, MK-0616's once-daily dosing and oral formulation could dramatically improve patient adherence, a major barrier for injectables that require monthly or quarterly subcutaneous injections.

Merck's Phase 3 program, CORALreef, is designed to solidify MK-0616's position. The trials aim to enroll ~17,000 patients across three studies:
- CORALreef Lipids: Tests the drug in a broad population, including those with a history of cardiovascular disease.
- CORALreef HeFH: Targets heterozygous familial hypercholesterolemia (HeFH), a genetic condition causing dangerously high LDL levels.
- CORALreef Outcomes (TIMI 77): A cardiovascular outcomes trial to confirm that LDL-C reductions translate into fewer heart attacks and strokes.

While the Lipids and HeFH trials are expected to conclude in 2025, the outcomes trial will run through 2029. Success here could position MK-0616 for an FDA filing as early as 2026, with analysts projecting $70 million in sales by 2028—a figure that could surge if MK-0616's pricing proves competitive.

Navigating Competition: AZD0780's Threat and Merck's Advantages

Merck's biggest rival in the oral PCSK9 space is AstraZeneca's AZD0780. Phase 1 data showed AZD0780 reduced LDL-C by 52% when added to statins, with the added benefit of no food restrictions—a key advantage over MK-0616, which requires an empty stomach. This could boost AZD0780's adherence rates and patient preference.

However, Merck holds two critical advantages:
1. Head Start in Late-Stage Trials: AZD0780 is still in Phase 2, while MK-0616's Phase 3 data could lead to an earlier market entry.
2. Cost Structure: Merck has signaled its intent to price MK-0616 affordably, contrasting with injectables that often exceed $10,000 annually. This could make MK-0616 more palatable to insurers and patients.

Acceleron: Building a Cardiovascular Empire Beyond PCSK9

Merck's $11.5 billion acquisition of Acceleron in 2021 was a masterstroke to diversify its cardiovascular portfolio. The deal secured sotatercept, a Phase 3 candidate for pulmonary arterial hypertension (PAH), a rare and deadly lung disease. Sotatercept's mechanism—reversing vascular remodeling—sets it apart from existing PAH therapies, which only slow progression. Phase 2 data showed it reduced pulmonary vascular resistance, a key biomarker, and it's on track for FDA approval by 2025.

Additionally, Acceleron's REBLOZYL (luspatercept) treats anemia in rare blood disorders like beta-thalassemia, a market with limited options. Its Phase 3 trials in myelofibrosis could further expand its reach. Together, these assets position Merck to capture high-margin revenue in rare diseases, where pricing power is strong and competition is sparse.

Risks and Opportunities

The path to success isn't without hurdles. MK-0616's reliance on empty-stomach administration could limit uptake compared to AZD0780. Moreover, the cardiovascular outcomes trial (CORALreef Outcomes) must prove that LDL-C reductions translate to real-world benefits—a critical step for regulatory and market acceptance.

On the upside, Merck's scale allows it to leverage its global salesforce and infrastructure to rapidly commercialize MK-0616 and sotatercept. With ~86 million U.S. adults suffering from hypercholesterolemia and millions more globally, the market opportunity is vast.

Investment Implications

Merck's cardiovascular pipeline is a compelling growth driver. MK-0616's potential to capture a meaningful slice of the PCSK9 market—and its scalability as a once-daily pill—could offset Keytruda's decline. Sotatercept and Acceleron's other assets add depth, reducing reliance on any single drug.

Investors should monitor two key milestones:
1. 2025: Phase 3 readouts for MK-0616's lipid-lowering efficacy and sotatercept's PAH data.
2. 2029: Results from the CORALreef Outcomes trial, which will validate MK-0616's long-term cardiovascular benefits.

With a forward P/E of ~13x and a dividend yield of 1.6%, Merck remains attractively priced. The stock has underperformed the S&P 500 in recent years, but success in these trials could unlock ~$4.8 billion in peak sales for MK-0616 alone, driving valuation upside.

Final Verdict

Merck's cardiovascular pipeline is a strategic masterpiece. MK-0616's convenience and scalability, paired with Acceleron's rare-disease assets, positions the company to thrive beyond Keytruda's peak. While risks exist, the combination of late-stage clinical momentum and a massive market opportunity makes Merck a compelling buy for investors seeking stable growth with upside potential.

Investment recommendation: Consider accumulating shares ahead of 2025's Phase 3 readouts, with a price target of $95–$100 by 2026.