Merck's Subcutaneous Keytruda: A Strategic Pivot in Oncology Market Leadership and Biopharma Innovation

The U.S. Food and Drug Administration's (FDA) approval of Merck's subcutaneous (SC) formulation of Keytruda on September 19, 2025, marks a pivotal moment in the oncology landscapeUS FDA approves Merck's new injectable version of Keytruda^[1]. This innovation, which allows the drug to be administered under the skin in just two to three minutes—compared to the 30-minute intravenous (IV) infusion—positions Merck to reinforce its dominance in the $180 billion global immuno-oncology marketFDA OKs New Keytruda Shot for Cancer - The New York Times^[4]. For investors, the approval raises critical questions about Merck's ability to extend Keytruda's lifecycle, navigate biosimilar competition, and redefine patient-centric care in an increasingly price-sensitive healthcare environment.

Market Leadership and Financial Implications

Keytruda, already the world's best-selling cancer drug, generated $29.5 billion in global sales in 2024, accounting for nearly half of Merck's total revenueKeytruda represents almost half of Merck’s sales, and …^[3]. Its 41 approved indications across 18 cancer types—led by lung cancer (27.4% of the market)—underscore its versatility and entrenched position in treatment protocolsKeytruda Market Size, Share, Growth | Industry Report^[2]. The subcutaneous formulation, however, introduces a dual-layered strategic advantage.

First, the SC version addresses a key pain point for patients and healthcare providers: administration time. By reducing infusion chair occupancy from 30 minutes to under five, Merck could unlock capacity in clinics and hospitals, particularly in oncology departments facing resource constraintsUS FDA approves Merck's new injectable version of Keytruda^[1]. Second, the convenience of SC delivery may drive adoption in outpatient settings, potentially expanding Keytruda's reach into earlier-line treatments—a move that could delay biosimilar entry by extending the drug's market exclusivityMerck’s New Keytruda Shot Is a Rare Real-Time ‘Product Hop’^[5]. Analysts project that 30–40% of Keytruda's patient base could transition to the SC formulation by 2027FDA OKs New Keytruda Shot for Cancer - The New York Times^[4], mitigating near-term revenue erosion as patent expiry looms.

Strategic Innovation vs. Competitive Backlash

Merck's strategy to innovate Keytruda's delivery mechanism has drawn both praise and scrutiny. On one hand, CEO Rob Davis has framed the SC formulation as a “patient-centered breakthrough,” emphasizing its potential to improve quality of life for cancer patientsFDA OKs New Keytruda Shot for Cancer - The New York Times^[4]. On the other, critics argue that the move constitutes a “product hop”—a tactic to artificially extend market exclusivity by rebranding an existing drugMerck’s New Keytruda Shot Is a Rare Real-Time ‘Product Hop’^[5]. This debate mirrors broader industry tensions between innovation and affordability, particularly as biosimilars for Keytruda are expected to enter the market by 2028Keytruda Market Size, Share, Growth | Industry Report^[2].

Despite the backlash, Merck's approach aligns with broader trends in biopharma. The company is leveraging lifecycle management strategies, including expanding Keytruda's use in earlier-stage cancers and combination therapies, to delay revenue declineKeytruda Market Size, Share, Growth | Industry Report^[2]. For instance, the June 2025 FDA approval of Keytruda for resectable locally advanced head and neck squamous cell carcinoma (PD-L1–positive) further broadens its therapeutic footprintUS FDA approves Merck's new injectable version of Keytruda^[1]. These moves suggest Merck is proactively adapting to a competitive landscape where differentiation through delivery innovation and expanded indications is critical.

Investment Considerations and Future Outlook

For investors, the subcutaneous Keytruda represents both opportunity and risk. On the upside, the formulation's convenience could solidify Merck's leadership in oncology, where Keytruda's market share remains unrivaled. The projected 30–40% adoption rate by 2027FDA OKs New Keytruda Shot for Cancer - The New York Times^[4] could stabilize revenue streams during the transition to biosimilars. However, the long-term sustainability of this strategy hinges on Merck's ability to maintain pricing power in the face of regulatory and payer pushback.

The broader oncology market is also evolving. With Roche's Tecentriq and Bristol Myers Squibb's Opdivo competing for market share, Merck must continue innovating to retain its edge. The SC formulation is a step in that direction, but investors should monitor how payers and providers adopt the new delivery method—and whether Merck can replicate its success in international markets, where pricing pressures are more acute.

Conclusion

Merck's subcutaneous Keytruda is more than a technical upgrade; it is a strategic maneuver to redefine oncology care delivery while safeguarding its market leadership. By prioritizing patient convenience and expanding therapeutic applications, Merck is addressing both clinical and commercial challenges in a sector increasingly focused on value-based care. For investors, the key will be balancing short-term gains from adoption rates with long-term risks posed by biosimilars and regulatory scrutiny. As the oncology market evolves, Merck's ability to innovate beyond delivery mechanisms—into novel combinations and earlier-stage treatments—will determine whether Keytruda remains a cornerstone of its portfolio or becomes a cautionary tale of lifecycle management.