BMO most bullish on Merck’s, bearish on BMS’ plans to contend with patent cliffs
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BMO Capital Markets expressed a bullish outlook on Merck’s pipeline readiness to handle patent cliffs, favoring their strategy over Bristol Myers Squibb's.
BMO Capital Markets is more impressed by Merck’s plans to replace lost Keytruda revenue than on Bristol Myers Squibb’s efforts to fill the expected void that will come from loss of exclusivity for both Opdivo and Eliquis. Almost all big pharmas are contending with patent cliffs right now, putting pressure on pipeline programs and next-gen plans. While Merck and Bristol Myers Squibb both face some of the greatest exposure—for PD-1 blockbusters Keytruda and Opdivo, respectively—BMO Capital Markets believes Merck has done a better job putting sufficiently large, derisked growth products in place before erosion begins.
Of the pharma companies BMO covers, the firm is most bullish on Merck right now. Merck faces the largest single-product replacement challenge with Keytruda. The New Jersey pharma faces loss of exclusivity for its blockbuster immunotherapy beginning at the end of 2028, putting $33 billion in revenue at risk, according to a Sept. 9 report from BMO. That being said, the first half of 2026 was a continuation of “sentiment reversal for Merck,” the analysts wrote. As of Sept. 9, Merck’s shares had risen 43% since the beginning of the year, making the company the largest gainer in BMO’s large pharma coverage.
Some of Merck’s strongest growth products include the Moderna-partnered mRNA cancer vaccine intismeran autogene, the high blood pressure medicine Winrevair and the TROP2 antibody drug conjugate sac-TMT, Evan Seigerman, BMO managing director, head of healthcare research and senior biopharma analyst, told BioSpace.
The recent success of intismeran autogene demonstrates additional opportunity for oncology expansion, Seigerman said. Meanwhile, Winrevair has shown continued commercial strength, with BMO modeling $9.1 billion in peak sales.
Then there’s the late-stage sac-TMT, discovered by China’s Kelun-Biotech, “which appears to be an increasingly meaningful part of the Keytruda solution,” according to BMO’s report. Recently, the asset improved progression-free survival compared to a Keytruda and chemotherapy combination in the Phase 3 OptiTROP-Lung06 trial. BMO projects peak sales of $4.3 billion for sac-TMT, which has secured breakthrough status and a Commissioner’s National Priority Voucher from the FDA.
Seigerman also highlighted Merck’s anti-TL1A antibody tulisokibart, gained in the company’s $10.8 billion Prometheus Biosciences buy in 2023. Just this week, Merck shared data behind a mid-stage win in hidradenitis suppurativa that the analysts say could help carve out a place in a crowded market that already includes AbbVie’s Humira and UCB’s Bimzelx. “They actually probably have a credible foray into I&I [immunology and inflammation],” Seigerman said. “Beyond that, they’re still always the leader in oncology, whether it’s their TROP2, what they’re doing in PD-L1/VEGF or their collaboration with Moderna on a personalized cancer vaccine. So, they’re pretty solid there.”
