Merck's Strategic Expansion of KEYTRUDA in the EU: A High-Conviction Play in Oncology Innovation

Merck's KEYTRUDA (pembrolizumab) has long dominated the immuno-oncology landscape, but its recent regulatory milestones in the European Union (EU) underscore a strategic pivot to sustain its market leadership. The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) has issued two positive opinions: one for a subcutaneous (SC) administration route and another for a new indication in resectable locally advanced head and neck squamous cell carcinoma (LA-HNSCC) Merck Receives Two Positive EU CHMP Opinions for KEYTRUDA^[1]. These approvals, pending final European Commission ratification by late 2025, position Merck to accelerate market access and differentiate KEYTRUDA in a competitive PD-1/PD-L1 inhibitor space.

Market Access Acceleration: Convenience and Expanded Therapeutic Reach

The subcutaneous formulation of KEYTRUDA, which can be administered in one minute every three weeks or two minutes every six weeks, represents a paradigm shift in oncology delivery. According to a report by Merck, this formulation demonstrated noninferior pharmacokinetic exposure and comparable efficacy to the intravenous (IV) version in the pivotal 3475A-D77 trial Merck Receives Two Positive EU CHMP Opinions for KEYTRUDA ...^[2]. By enabling administration in outpatient clinics, doctor's offices, and even home settings, the SC route reduces healthcare resource utilization and improves patient adherence. This convenience is critical in an EU market where reimbursement policies and patient preferences increasingly favor therapies that minimize hospital visits Europe Keytruda Market Size & Outlook, 2030 - Grand View Research^[3].

The new indication for LA-HNSCC further expands KEYTRUDA's therapeutic footprint. Based on the Phase 3 KEYNOTE-689 trial, the drug demonstrated statistically significant improvements in event-free survival (EFS) for PD-L1–positive patients, making it the first perioperative anti-PD-1 treatment in the EU for this indication Merck Receives Two Positive EU CHMP Opinions for KEYTRUDA ...^[4]. This aligns with a broader industry trend to shift therapies to earlier-stage cancers, where curative intent and long-term survival are prioritized. For Merck, this approval not only broadens KEYTRUDA's label but also taps into a growing segment of the EU oncology market, which is projected to grow despite a compound annual growth rate (CAGR) of -3.1% from 2025 to 2030 Keytruda Market to Reach $26.6 Billion by 2030 Amid Patent^[5].

Competitive Differentiation: Lifecycle Management and Biosimilar Mitigation

KEYTRUDA's dominance is under threat from patent expiration in 2028 and biosimilar competition. However, Merck's lifecycle management strategies—particularly the SC formulation—offer a robust defense. Data from Grand View Research indicates that the subcutaneous route could delay biosimilar entry by leveraging formulation-specific exclusivity and patient preference for convenience Keytruda Market Size, Share, Growth | Industry^[6]. Additionally, Merck has extended KEYTRUDA's EU patent through a supplementary protection certificate (SPC) and a six-month pediatric extension, pushing exclusivity to January 2031 Keytruda: The drug that makes as much money as …^[7]. This temporal buffer, combined with the SC formulation's administrative advantages, creates a moat against generic competitors.

Competitively, KEYTRUDA now outpaces rivals like Bristol-Myers Squibb's Opdivo and Roche's Tecentriq. While these drugs remain strong in lung and bladder cancers, Merck's dual focus on earlier-stage indications (e.g., LA-HNSCC) and administration innovation provides a unique value proposition. Analysts at Fierce Pharma note that the SC formulation's shorter administration time could reduce healthcare costs by up to 30% compared to IV infusions, a critical factor in cost-conscious EU markets Merck lays out subcutaneous Keytruda data amid …^[8].

Investment Case: High Conviction in Oncology Innovation

Merck's strategic investments in R&D further solidify its long-term prospects. The company has reallocated $3 billion to accelerate pipeline development, including novel antibody-drug conjugates and personalized mRNA vaccines in collaboration with Moderna Merck’s $3 Billion Budget Shift: Preparing for Keytruda’s Postexclusivity Era and New Opportunities^[9]. These initiatives aim to diversify revenue streams post-KEYTRUDA exclusivity and address unmet needs in prostate and gastrointestinal cancers.

From a financial perspective, KEYTRUDA's projected peak sales of $36 billion by 2028 (despite a post-2028 decline) and its current 40% contribution to Merck's revenue underscore its importance. However, the drug's EU market resilience—supported by favorable reimbursement and regulatory approvals—mitigates near-term risks. As stated by a Bloomberg report, Merck's proactive approach to lifecycle management and its leadership in combination therapies position it as a high-conviction play in oncology innovation Merck (MRK) Analysis: Keytruda's Future & Pipeline Strategy^[10].

Conclusion

Merck's recent EU CHMP approvals for KEYTRUDA's subcutaneous administration and LA-HNSCC indication are not merely regulatory wins but strategic masterstrokes. By accelerating market access through convenience-driven delivery and expanding into earlier-stage cancers, Merck is reinforcing KEYTRUDA's role as a cornerstone of immuno-oncology. For investors, the company's lifecycle management, R&D investments, and regulatory agility present a compelling case for long-term growth, even amid looming patent challenges. In a sector where innovation and commercial scalability are paramount, Merck's KEYTRUDA remains a standout.