Merck’s Fight for Self-Rescue
Update time:
2026-03-20 08:23
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The boom of combining IO and ADC kicks off its first chapter in 2026.
Recently, the combination of the PD-1 inhibitor Keytruda and the ADC drug Padcev nearly halved the risk of tumor recurrence, progression and death in patients with early-stage muscle-invasive bladder cancer, with a 2-year event-free survival rate of over 79%—significantly higher than that of the chemotherapy group.
This has somewhat eased Merck’s anxiety in the “post-blockbuster drug” era.
On its 2025 earnings call, the oncology giant had to face analysts’ skepticism: Is Merck a company that grows slowly when the economy is strong, yet faces enormous pressure when it is weak? In 2025, it generated $65 billion in revenue, barely meeting its target. However, sales of Gardasil, its former growth engine HPV vaccine, plummeted 35% due to weak demand in the Chinese and Japanese markets.
Merck CEO Robert Davis repeatedly emphasized that the company is in “the broadest and most diverse product pipeline cycle in years.” His confidence stems from a strategic shift underway with Keytruda, which has long been tied to the company’s fortunes.
Around the same time, Merck announced plans to split its core human health business into two independent divisions: an oncology division, and a specialty care, primary care and infectious diseases division.
This marks the largest organizational restructuring at Merck since the launch of Keytruda. External interpretations view the move as a defensive measure to prepare for Keytruda’s patent cliff in 2028. But what Davis sees may well be the foundation-laying ceremony of a new empire.
To a certain extent, Merck’s oncology portfolio—busy with self-rescue—has never been as complex and dynamic as it is today, with full-scale offensives across immune modulation, tissue targeting, and intrinsic tumor mechanisms.
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Tumor Immunology: A New Revolution
In 2025, Keytruda generated $31.68 billion in revenue for Merck, a 7% year-on-year increase. Yet compared with the 19% growth rate in 2023, the slowdown in its growth curve is plainly visible.
More importantly, in the first-line treatment of non-small cell lung cancer (NSCLC), ivonescimab from Akeso Biopharma extended median progression-free survival from 5.82 months with Keytruda to 11.14 months in a head-to-head Phase III trial. It is the world’s first PD-1/VEGF bispecific antibody to directly outperform Keytruda in a Phase III study.
Summit Therapeutics, Akeso’s partner, submitted ivonescimab for FDA approval in Q4 2025, and the application was recently formally accepted.
In Merck’s narrative, immunotherapy is not backing down.
In response to the challenge, Merck initiated the Phase III KANDLELIT-007 trial in January this year, combining the oral KRAS G12C inhibitor calderasib with the subcutaneous formulation KEYTRUDA QLEX for first-line NSCLC treatment.
This represents, first and foremost, a formulation revolution. Compared with the original 30-minute intravenous infusion, KEYTRUDA QLEX reduces administration time to approximately 2 minutes. Beyond improving patient experience, KEYTRUDA QLEX also helps delay the patent cliff—patents related to the subcutaneous formulation are expected to extend market exclusivity to 2042.
Second, Merck has shifted to a combination strategy.
PD-1 inhibitors are evolving from “protagonists” to “backbone therapies,” while next-generation combination therapies are rapidly moving toward “chemotherapy-free” regimens. Merck is attempting to prove that, even amid the impact of PD-1/VEGF bispecific antibodies, Keytruda can still form an impregnable moat when combined with therapies of other mechanisms.
Its heavy bet on personalized mRNA cancer vaccines is another testament to this combination logic.
In January, Merck and Moderna released 5-year follow-up data from the Phase IIb KEYNOTE-942 study, with encouraging results. In the median 5-year follow-up analysis, mRNA-4157 (intismeran autogene) plus Keytruda reduced the risk of recurrence or death by 49% compared with Keytruda monotherapy in patients with high-risk melanoma after complete resection.
These results were highly consistent with the interim analysis three years earlier, strongly validating the therapy’s ability to establish durable anti-tumor immune memory. Moderna’s stock rose more than 15% on the day of the announcement.
Analysts at William Blair noted that this is the first therapy to demonstrate superior benefit over Keytruda monotherapy in the adjuvant postoperative setting. Jefferies analysts project the regimen could launch as early as 2027 and contribute meaningful sales to Merck by 2028.
Currently, Merck and Moderna have expanded the combination to eight Phase II/III trials covering multiple tumor types, including NSCLC, renal cell carcinoma, and bladder cancer.
Additionally, Merck is investing heavily in T-cell engagers (TCEs). In 2024, the giant acquired Harpoon Therapeutics for $680 million, gaining HPN328, a DLL3-targeted TCE. Renamed MK-6070, the agent is being evaluated in clinical trials for small cell lung cancer.
Merck has also entered an agreement with Daiichi Sankyo to co-develop MK-6070 and explore synergies with ADC drugs.
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ADCs: A Latecomer Surpasses the Pioneers
From PD-1 and mRNA to TCEs, Merck has spared no effort in exploring combinations with ADCs. To understand why Merck is betting big on ADCs, one must look at the paradigm shift across the entire industry.
In 2013, Roche’s T-DM1 became the first ADC approved for solid tumors, opening a new era of targeted therapy for breast cancer. In 2019, Daiichi Sankyo made a stunning debut with T-DXd, which not only demonstrated superior efficacy in later-line HER2-positive therapy but also proved for the first time that patients with low HER2 expression could benefit, completely reshaping the treatment landscape for HER2-driven breast cancer.
Since then, the ADC race has fully ignited, with giants including AstraZeneca and Pfizer placing heavy bets, all positioning ADCs as cornerstones of their oncology strategies.
Merck entered the field half a step late, but it has made up ground with remarkable speed and determination.
In 2022, Merck partnered with Kelun-Biotech, securing exclusive global development, manufacturing, and commercialization rights outside Greater China to the TROP2 ADC sacituzumab govitecan (sac-TMT) for a total transaction value of nearly $1.4 billion.
The following year saw an even larger deal: Merck in-licensed three ADC pipelines from Daiichi Sankyo for a total of $22 billion—HER3-DXd targeting HER3, I-DXd targeting B7-H3, and DS-6000a targeting CDH6. This marked the full acceleration of its ADC portfolio.
In 2025, Merck struck a research funding collaboration with Blackstone Life Sciences, exchanging a portion of sac-TMT’s future revenue rights for $700 million to support the global development of sac-TMT.
At the JPMorgan Healthcare Conference in early 2026, Merck revealed that sac-TMT, a key focus of its oncology growth, was being studied in 16 Phase III trials across NSCLC, endometrial cancer, breast cancer, gastric cancer, cervical cancer, ovarian cancer, urothelial cancer, and other tumor types. Merck later launched an additional Phase III trial exploring sac-TMT in metastatic urothelial cancer.
Meanwhile, label expansions for sac-TMT are also accelerating.
In February, sac-TMT gained a new indication approval from China’s NMPA for the treatment of HR+/HER2− breast cancer in patients who had received at least one line of chemotherapy, becoming its fourth approved indication.
Shortly before that, in late 2025, sac-TMT plus Keytruda met its primary endpoint in PD-L1-positive NSCLC. Notably, this represents the world’s first Phase III study of an ADC combined with an immune checkpoint inhibitor to yield positive results for first-line NSCLC.
The role of sac-TMT combination regimens is growing increasingly prominent. According to Orient Securities, Merck has initiated nine Phase III trials combining sac-TMT with Keytruda. This “IO+ADC” combo is being positioned by Merck as the next-generation cornerstone therapy following “IO+chemotherapy.”
In 2026, as multiple key data readouts emerge, the clinical certainty of IO+ADC combinations is expected to improve significantly.
Notably, Merck is not simply waging a “scale war.” It is also gaining a foothold in cutting-edge ADC frontiers, exemplified by DS-6000a. To date, no CDH6-targeted drug has been approved globally, and DS-6000a is the most advanced CDH6-targeted ADC, having entered Phase II/III development.
In January, China’s CDE proposed DS-6000a for breakthrough therapy designation for platinum-resistant ovarian cancer in patients with CDH6 expression who had previously received bevacizumab.
Last year, the drug was granted breakthrough therapy designation by the FDA. Clinical data showed an objective response rate of 46% and a disease control rate as high as 98% in platinum-resistant ovarian cancer patients, with a median duration of response of 11.2 months—demonstrating efficacy superior to traditional chemotherapy.
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Grabbing a Multi-Billion-Dollar Incremental Market
Taking a longer view, the RAS pipeline is emerging as a major rear guard for Merck.
Following rumors of a potential AbbVie bid, Merck was reported in early January to be pursuing the acquisition of high-profile biotech Revolution Medicines. A source familiar with the matter stated that the parties discussed an acquisition price ranging from $28 billion to $32 billion during negotiations.
The strategic value of the RAS target is becoming increasingly prominent at an unprecedented pace. As the most common oncogenic mutation in human cancers, RAS mutations drive approximately 30% of all human tumors. However, due to the smooth surface of the RAS protein, which lacks traditional “pockets” for small-molecule drug binding, industrial progress had long been stalled.
In 2013, Kevan Shokat’s lab first reported a binding pocket on the KRAS G12C mutant protein accessible to small molecules, breaking through the field and ending the myth that “KRAS is undruggable.”
Notably, Shokat sits on Revolution Medicines’ Scientific Advisory Board.
Leveraging such scientific backing, Revolution is positioned at the forefront of the next wave. Its core asset, daraxonrasib, targets KRAS G12D—the most prevalent and intractable RAS subtype, accounting for up to 40% of pancreatic cancers.
Compared with competitors, doraxonrasib exhibits greater target selectivity and a wider therapeutic window. Preclinical data show significant activity across multiple KRAS G12D-mutant cancer models, while avoiding the liver toxicity commonly seen in peer agents.
In 2025, doraxonrasib was selected for the FDA’s new Breakthrough Therapy Pathway program, accelerating its review and potentially earning accelerated approval as early as late 2026.
Evaluate Pharma forecasts that the global KRAS G12D-targeted drug market will reach $12 billion by 2035. Analysts at Mizuho Securities noted that, if doraxonrasib proves safe and effective in pancreatic cancer, it could dominate the space and achieve $10 billion in global sales by 2035.
Furthermore, Revolution is developing RMC-9805, a next-generation pan-KRAS inhibitor in Phase I clinical development. Designed to address multiple KRAS mutant subtypes—including historically “undruggable” variants such as G12V and G13D—it broadens the company’s RAS footprint.
Yet just as investors envisioned the merger, Merck halted acquisition talks in late January.
Sources indicated negotiations cooled after the parties failed to agree on price. Davis had publicly stated that the company is currently focused on transactions under $15 billion, emphasizing strict financial discipline.
Although the acquisition fell through, Merck’s RAS pipeline expansion has not stopped—and it already has a foothold in this emerging market.
In early 2026, Merck initiated the Phase III KANDLELIT-007 trial of calderasib. An oral KRAS G12C inhibitor, calderasib is being advanced in NSCLC and colorectal cancer, with combinations alongside Keytruda also under investigation.
“If you had asked me 15 to 20 years ago whether we would have approved drugs to treat KRAS-driven cancers, I would have said ‘no way,’” recalled Alex Snyder, Merck’s Senior Vice President and Head of Translational Medicine and Oncology Discovery. “But now the industry has approved drugs, and Merck is working on next-generation therapies and combinations.”
Snyder believes the market has long associated Merck’s story solely with Keytruda. Going forward, the giant aims to prove that, as PD-1’s halo fades, it can open new chapters in areas such as RAS.
The question remains: expanding its oncology footprint does not mean Merck has found its second Keytruda. The success of its diversified transformation will determine whether this once-top oncology revenue generator among multinational pharma companies faces “the twilight of an old king” or “the rise of a new era” in the decade ahead.
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