Merck's Keytruda Expands into Cervical Cancer in Canada: A Strategic Move in Immune-Oncology Leadership

In July 2025, Merck (MRK) secured a landmark regulatory approval in Canada for Keytruda (pembrolizumab) in combination with chemoradiotherapy (CRT) for the treatment of FIGO 2014 Stage III-IVA cervical cancer. This decision, based on the Phase III KEYNOTE-A18 trial, marks a pivotal expansion of Keytruda's therapeutic footprint and underscores Merck's dominance in the immune-oncology (I-O) space. With cervical cancer affecting 1,600 Canadian women annually and claiming 400 lives, the approval addresses a critical unmet need while reinforcing Keytruda's role as a cornerstone of modern cancer care.

Clinical Validation and Market Potential

The KEYNOTE-A18 trial demonstrated statistically significant improvements in progression-free survival (PFS) and overall survival (OS) for patients receiving Keytruda plus CRT compared to placebo plus CRT. The hazard ratios of 0.59 for PFS and 0.58 for OS in the Stage III-IVA subgroup highlight the drug's efficacy in advanced cervical cancer, a segment with limited treatment options. This clinical validation is likely to drive rapid adoption in Canada, where Keytruda's market generated $759.7 million in revenue in 2024 and is projected to reach $815.9 million by 2030, despite a modest -0.4% CAGR.

The cervical cancer indication adds a new revenue stream for Merck in a market where lung cancer currently dominates Keytruda's Canadian sales. However, the growing incidence of cervical cancer and the drug's established safety profile in combination regimens position it to outpace other segments. Analysts estimate that the cervical cancer market in Canada could grow at a 3–5% CAGR through 2030, driven by early adoption of Keytruda in first-line treatment protocols.

Merck's Oncology Portfolio: A Fortress of Innovation

Keytruda's cervical cancer approval is not an isolated event but part of Merck's broader strategy to dominate the I-O landscape. In 2024, Keytruda generated $29.5 billion in global sales, accounting for 46% of Merck's total revenue, and remains the top-selling oncology drug worldwide. Its versatility across monotherapy, combination therapy, and early-stage treatment has cemented its market leadership, even as competitors like Bristol-Myers Squibb's Opdivo and Roche's Tecentriq intensify their efforts.

Merck's pipeline further strengthens its position. The subcutaneous (SC) formulation of Keytruda, expected to launch in 2025, offers a more convenient administration method and could delay biosimilar competition. While the SC version faces a legal dispute with Halozyme Therapeutics over enzyme technology, Merck's ability to resolve this issue will determine its exclusivity timeline. If successful, the SC formulation could retain 30–40% of the current IV user base, mitigating revenue erosion post-2028 when the IV patent expires.

Beyond Keytruda, Merck's oncology portfolio includes Lynparza (a $1.3 billion PARP inhibitor) and Lenvima (a $1.0 billion multikinase inhibitor), both of which are expanding into new indications. Recent approvals in advanced epithelial ovarian cancer and Von Hippel-Lindau disease-associated tumors demonstrate Merck's ability to diversify revenue streams and reduce reliance on Keytruda alone.

Competitive Dynamics and Long-Term Value Creation

The PD-1/PD-L1 inhibitor market is fiercely competitive, with biosimilars and next-gen therapies looming on the horizon. However, Merck's lifecycle management strategies—such as the SC formulation and expansion into earlier-stage cancers—position Keytruda to maintain its market share. For instance, the drug's approval in neoadjuvant and adjuvant settings for non-small cell lung cancer (NSCLC) and triple-negative breast cancer has broadened its patient base and deflected pricing pressures.

Investors should also note Merck's strategic partnerships and acquisitions. Collaborations with biotech firms and the licensing of novel therapies like MK-2010 (a PD-1/VEGF bispecific antibody) highlight Merck's commitment to innovation. These moves are critical for sustaining growth post-Keytruda, as biosimilars begin to erode the IV formulation's revenue by 2030.

Investment Thesis: A Buy for Long-Term Growth

Merck's oncology segment is a fortress of innovation, with Keytruda's cervical cancer approval in Canada serving as a testament to its leadership. While biosimilars and patent expirations pose risks, Merck's $29.5 billion in 2024 Keytruda sales, robust pipeline, and strategic partnerships create a durable competitive moat. The SC formulation and expansion into earlier-stage cancers are expected to drive revenue growth through 2030, even as the IV market faces headwinds.

For investors, Merck represents a compelling opportunity in the oncology sector. Its ability to navigate regulatory, legal, and competitive challenges while maintaining a first-mover advantage in I-O positions it as a long-term winner. With Keytruda's cervical cancer approval in Canada and a pipeline brimming with next-gen therapies, Merck is not just defending its crown—it's redefining the future of cancer care.