Merck & Co. (MRK) Shares Plunge 2.12% Amid Gardasil Supply Disruption and Patent Risks, Mixed Q4 Earnings

Merck & Co. (MRK) shares dropped to their lowest level since October 2025, with an intraday decline of 2.12%, closing the session down 0.69%. The selloff reflects investor concerns over near-term challenges despite ongoing clinical and regulatory progress for key products.

Positive momentum from Keytruda, Merck’s flagship oncology drug, has been partially offset by strategic headwinds. Recent regulatory approvals, including expanded indications for Keytruda in lung cancer and the FDA’s priority review for Welireg in renal cell carcinoma, underscore the drug’s therapeutic versatility. However, a temporary halt in Gardasil 9 shipments to China—critical to the HPV vaccine’s revenue stream—has raised questions about supply chain management and regional market dependencies.

Financial performance in Q4 2024 highlighted mixed signals. While revenue surged to $15.6 billion, driven by Keytruda’s 18% growth, adjusted earnings per share fell short of expectations. The company’s 2025 guidance also lagged analyst forecasts, attributing the shortfall to competitive pressures and slower adoption of newer therapies. Institutional investors have shown divergent strategies, with some increasing stakes while others reduced holdings, reflecting cautious optimism amid market volatility.

Long-term risks loom large, particularly Keytruda’s impending U.S. patent expiration in 2028 and potential Medicare price negotiations under the Biden administration. These factors, coupled with the Gardasil supply disruption, have intensified scrutiny over Merck’s ability to sustain growth. Strategic initiatives, including M&A pursuits and cost-cutting measures, aim to diversify the pipeline and mitigate reliance on flagship products. However, the success of emerging therapies like sotatercept and Welireg will be pivotal in determining future resilience.

Analysts remain divided, with some emphasizing Keytruda’s untapped potential in early-stage cancers and others warning of pricing pressures. The stock’s mixed institutional activity and elevated options trading suggest heightened uncertainty. For investors, Merck’s near-term trajectory hinges on navigating these challenges while capitalizing on its robust pipeline and market leadership in oncology.