Merck & Co., Inc. operates as a healthcare company worldwide. It operates through two segments, Pharmaceutical and Animal Health. The Pharmaceutical segment offers human health pharmaceutical products in the areas of oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, and diabetes under the Keytruda, Bridion, Adempas, Lagevrio, Belsomra, Simponi, and Januvia brands, as well as vaccine products consisting of preventive pediatric, adolescent, and adult vaccines under the Gardasil/Gardasil 9, ProQuad, M-M-R II, Varivax, RotaTeq, Live Oral, Vaxneuvance, Pneumovax 23, and Vaqta names. The Animal Health segment discovers, develops, manufactures, and markets veterinary pharmaceuticals, vaccines, and health management solutions and services, as well as digitally connected identification, traceability, and monitoring products. The company serves drug wholesalers and retailers, hospitals, and government agencies; managed health care providers, such as health maintenance organizations, pharmacy benefit managers, and other institutions; and physicians, wholesalers, government entities, veterinarians, distributors, animal producers, farmers, and pet owners. It has development and commercialization agreement for three of Daiichi Sankyo's deruxtecan ADC candidates, which include patritumab deruxtecan, ifinatamab deruxtecan, and raludotatug deruxtecan for the treatment of multiple solid tumors both as monotherapy and/or in combination with other treatments; and AstraZeneca PLC to co-development and co-commercialize AstraZeneca's Lynparza products for multiple cancer types, and Koselugo for multiple indications. The company also has a collaboration agreement with Eisai Co., Ltd., Bayer AG, and Ridgeback Biotherapeutics LP, as well Moderna, Inc. Merck & Co., Inc. was founded in 1891 and is headquartered in Rahway, New Jersey.

Merck & Company, Inc.

Merck MRK will report its third-quarter 2025 earnings on Oct. 30, before market open. The Zacks Consensus Estimate for third-quarter sales and earnings is pegged at $17.06 billion and $2.36 per share, respectively. Earnings estimates for 2025 have declined from $8.94 to $8.92 per share over the past 30 days.
Image Source: Zacks Investment Research
Earnings Surprise History of Merck
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 3.92%, on average. In the last reported quarter, the company delivered an earnings surprise of 5.97%, as seen in the chart below.
Image Source: Zacks Investment Research
What Does Our Model Say for MRK?
Merck has an Earnings ESP of -0.09% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping MRK’s Upcoming Results
After a weak sales performance in the first half, Merck expects to return to growth in the second half. It expects growth to be driven by oncology drugs, mainly Keytruda, Animal Health and new products, which are likely to have been partially offset by lower sales of Gardasil in China and Japan.
Performance of Merck’s Oncology Drugs
In oncology drugs, Keytruda sales are likely to have been driven by rapid uptake across earlier-stage indications globally, particularly early-stage non-small cell lung cancer. Continued strong momentum in metastatic indications is also expected to have boosted sales growth. The Zacks Consensus Estimate for Keytruda’s sales is $8.4 billion, while our estimate is $8.51 billion.
Higher alliance revenues from Lynparza, driven by increased demand, may have boosted oncology sales. Please note that Merck markets Lynparza in partnership with AstraZeneca AZN.
Merck has a profit-sharing deal with AstraZeneca to co-market Lynparza and Koselugo. AstraZeneca and Merck’s Lynparza is approved for four cancer types: ovarian, breast, prostate and pancreatic. Lynparza is also being evaluated in combination with Keytruda in late-stage studies for lung cancer indications.
Alliance revenues from Lenvima may have also boosted oncology sales.
Sales of the new drug Welireg are likely to have benefited from higher demand in the United States as well as early launch uptake in certain European markets.
MRK’s Vaccines, Animal Health Segment and Other Drugs
With regard to the HPV vaccine, Gardasil, ex-U.S. sales are expected to have been hurt by lower demand in China due to a significant decline in demand and elevated channel inventory. Sales are likely to have declined in Japan, too. The Zacks Consensus Estimate for Gardasil is $1.75 billion, while our estimate is $1.70 billion.
Sales of some other Merck vaccines, like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23, declined in the second quarter, a trend likely to have continued in the third quarter.
In the hospital specialty portfolio, generic competition in certain ex-U.S. markets is likely to have hurt sales of neuromuscular blockade medicine — Bridion injection. However, higher demand and pricing are expected to have benefited U.S. sales. The Zacks Consensus Estimate for Bridion is $436.4 million, while our estimate is $422.0 million.
Lower demand in the United States and China, and generic competition in most international markets, mainly Europe and the Asia Pacific, are likely to have hurt sales of the diabetes franchise (Januvia/Janumet).
New pulmonary arterial hypertension (PAH) drug Winrevair is likely to have contributed to sales growth, with most sales coming from the U.S. market, as the company is steadily adding new patients. Another new vaccine, Capvaxive, is also off to an encouraging start in the United States, gaining from rising demand in the retail pharmacy channel.
The Zacks Consensus Estimate for Merck’s Pharmaceutical unit is $15.3 billion, while our estimate is $15.4 billion.
In the Animal Health franchise, growth in both companion animal and livestock products is likely to have contributed to sales. Sales will also benefit from the inclusion of sales from the newly acquired Elanco’s aqua portfolio. The Zacks Consensus Estimate, as well as our estimate for the Animal Health unit, is $1.56 billion.
EPS in the third quarter will include a one-time charge of $300 million related to a payment made to LaNova for the technology transfer for MK-2010
Nonetheless, a single quarter’s results are not important for long-term investors. Let's delve deeper to understand whether to buy, sell or hold Merck stock.
MRK’s Price Performance & Valuation
Merck’s shares have lost 11.5% so far this year against an increase of 5.7% for the industry. The stock has also underperformed the sector and the S&P 500, as seen in the chart below.
Merck Stock Underperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
From a valuation standpoint, Merck appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 9.42 forward earnings, lower than 15.58 for the industry as well as its 5-year mean of 12.63.
MRK Stock Valuation
Image Source: Zacks Investment Research
Investment Thesis on MRK’s Stock
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda has played an instrumental role in driving Merck’s steady revenue growth in the past few years. Last month, the FDA approved a subcutaneous formulation of Keytruda, known as Keytruda Qlex, which can enhance patient convenience.
MRK’s phase III pipeline has almost tripled since 2021, supported by in-house pipeline progress as well as the addition of candidates through M&A deals. This has positioned Merck to launch around 20 new vaccines and drugs over the next few years, with many having blockbuster potential. These include Capvaxive and Winrevair, which have the potential to generate significant revenues over the long term. Both products are off to a strong start.
Merck acquired Verona Pharma this year, which added the latter’s chronic obstructive pulmonary disease or COPD drug, Ohtuvayre, to its portfolio. This addition strengthens Merck’s cardio-pulmonary pipeline and portfolio as the drug’s differentiated profile provides a significant edge over its competitors. Ohtuvayre's commercial launch is off to a solid start. Investors will look for updates on Ohtuvayre's sales numbers on the third-quarter conference call.
Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, it can also be argued that the company is excessively dependent on the drug, and it should look for ways to diversify its product lineup.
There are rising concerns about the firm’s ability to grow its non-oncology business ahead of the upcoming loss of exclusivity of Keytruda in 2028.
Also, competitive pressure might increase for Keytruda in the near future from dual PD-1/VEGF inhibitors like Summit Therapeutics’ SMMT ivonescimab that inhibit both the PD-1 pathway and the VEGF pathway at once. They are designed to overcome the limitations of single-target therapies like Keytruda. Pfizer PFE also recently acquiredexclusive global ex-China rights to develop, manufacture and commercialize SSGJ-707, a dual PD-1 and VEGF inhibitor, from China’s 3SBio
Merck’s second-largest product, Gardasil, is also seeing grim sales in China. Merck is also seeing weakness in the diabetes franchise and the generic erosion of some drugs.
Long-Term Investors Can Stay Invested in MRK Stock
Merck’s problems are numerous at present, including persistent challenges for Gardasil in China, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs. All these factors have raised doubts about Merck’s ability to navigate the Keytruda loss-of-exclusivity period successfully. Consistently declining estimates and price depreciation reflect analysts’ pessimistic outlook for the stock.
However, Merck has one of the world’s best-selling drugs in its portfolio, generating billions of dollars in revenues. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then.
No matter how the third-quarter results play out, we suggest that investors stay invested in MRK as the company expects to return to growth in the second half.
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Buy, Sell or Hold MRK Stock Ahead of Q3 Earnings? Things to Know

An updated edition of the Sept. 8, 2025, article.
The global cancer treatment market is entering a transformative phase, driven by rising cancer incidence and rapid scientific progress. According to the American Cancer Society, the United States alone is projected to report 2.04 million new cancer cases and over 618,000 deaths in 2025. An aging population and lifestyle-related risks are increasing global cancer prevalence, pushing healthcare systems toward higher oncology spending.
Meanwhile, innovation is transforming the way cancer is managed. Advances in immunotherapies, targeted drugs and personalized vaccines have expanded options well beyond traditional chemotherapy and radiation. Immune-based approaches — such as checkpoint inhibitors, CAR-T therapies, therapeutic vaccines and oncolytic viruses — train the body’s own defenses to fight tumors. Targeted therapies focus on specific genetic mutations, improving precision and reducing side effects, while personalized cancer vaccines represent a major step forward in precision oncology.
Emerging technologies like genomic sequencing, artificial intelligence (AI) and machine learning (ML) are accelerating biomarker discovery, refining patient selection, and improving early detection. Though a universal cure remains elusive, survival rates and the quality of life continue to improve across many cancer types, reflecting both scientific advances and earlier diagnosis.
Pharmaceutical companies are responding with aggressive investment. Global leaders — including Novartis, AstraZeneca, J&J, Pfizer PFE, AbbVie ABBV, Merck MRK, Bristol Myers Squibb and Eli Lilly LLY — are expanding their pipelines in antibody-drug conjugates (ADCs), bispecific antibodies, and next-generation immuno-oncology agents. Smaller biotech firms remain key sources of innovation, driving new collaborations, licensing deals and acquisitions as larger players seek novel assets with best-in-class potential.
Continued innovation, favorable reimbursement trends and expanding treatment options position the oncology segment as one of the most attractive and resilient areas for long-term investors.
With our thematic screens, you can easily spot stocks tied to trends shaping the future of investing. If the cancer space appeals to you and you’re looking to align your portfolio with this rising trend, now might be the time to consider stocks like Relay Therapeutics RLAY, Fate Therapeutics FATE and Verastem Oncology VSTM.
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3 Cancer Stocks in Focus
Relay Therapeutics is developing RLY-2608, its lead investigational candidate and a mutant-selective PI3Kα inhibitor, as a novel medicine for CDK4/6-experienced patients with PI3Kα mutations, where there is a large unmet medical need. In clinical studies, RLY-2608 has shown the potential benefit in improving both the tolerability profile and progression-free survival compared to standard-of-care drugs in this setting. Relay initiated a pivotal phase III study called ReDiscover-2 on RLY-260, in combination with AstraZeneca’s Faslodex for second-line PI3Kα-mutated, HR+/HER2- advanced breast cancer in the second quarter.
The company is also making progress in its development plans for investigational triplet combinations, which it believes can allow RLY-2608 to address patients in earlier settings.
Relay Therapeutics is also rapidly progressing with the development of other front-line breast cancer regimens while planning for the development of future oral endocrine therapy combinations.
Relay Therapeutics has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fate Therapeutics is focused on developing and manufacturing universal, off-the-shelf cell products using its proprietary induced pluripotent stem cell (iPSC) product platform. Its immuno-oncology pipeline includes iPSC-derived natural killer cells and T-cell product candidates.
Fate Therapeutics is co-developing FT825/ONO-8250, a multiplexed-engineered, iPSC-derived CAR T-cell product candidate, with ONO Pharmaceutical. It is conducting a phase I study to assess the safety, pharmacokinetics and activity of FT825/ONO-8250 in patients with advanced solid tumors.
To date, treatment with FT825/ONO-8250 has shown a favorable safety profile with no dose-limiting toxicities. Fate Therapeutics also has some next-generation iPSC-derived CAR T-cell programs in pre-clinical development. In July, the FDA allowed the company’s investigational new drug (IND) application to begin phase I clinical studies on FT836, its MICA/B-targeted CAR T-cell program. Fate has a Zacks Rank of 2.
Verastem Oncology’s novel combination regimen of avutometinib plus defactinib was approved by the FDA in early May for treating KRAS mutant recurrent low-grade serous ovarian cancer (LGSOC), a rare and distinct type of ovarian cancer. The approval was granted under the FDA’s accelerated approval pathway and is commercialized in the U.S. market as an oral combination co-pack with the two prescription products, known as “Avmapki Fakzynja Co-Pack.” The innovative combination therapy generated $2.1 million in sales in the first six weeks of launch.
Following the FDA approval, Avmapki Fakzynja Co-Pack is the first and only FDA-approved treatment for the LGSOC indication. Per Verastem Oncology, the combo sets a new standard of care for women with recurrent LGSOC with a KRAS mutation.
The company is also evaluating avutometinib plus defactinib in combination studies in first-line metastatic pancreatic cancer as well as non-small cell lung cancer in early to mid-stage studies. In May, VSTM reported strong overall response rates from a phase I/II study evaluating avutometinib plus defactinib in combination with chemotherapy for the first-line treatment of metastatic pancreatic ductal adenocarcinoma (PDAC). Based on the positive data, VSTM plans to initiate a registrational phase III study in front-line metastatic PDAC in 2026.
This Zacks Rank #2 company also recently announced positive preliminary data from an early-stage study for VS-7375, its KRAS G12D (ON/OFF) inhibitor in patients with KRAS G12D mutant solid tumors.
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3 Cancer-Focused Stocks Showing Strong Pipeline Progress

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Schwab US Dividend Equity ETF (Symbol: SCHD) where we have detected an approximate $259.0 million dollar outflow -- that's a 0.4% decrease week over week (from 2,599,000,000 to 2,589,450,000). Among the largest underlying components of SCHD, in trading today Lockheed Martin Corp (Symbol: LMT) is up about 0.1%, PepsiCo Inc (Symbol: PEP) is up about 0.2%, and Merck & Co Inc (Symbol: MRK) is lower by about 0.4%. For a complete list of holdings, visit the SCHD Holdings page » The chart below shows the one year price performance of SCHD, versus its 200 day moving average:
Looking at the chart above, SCHD's low point in its 52 week range is $23.87 per share, with $29.72 as the 52 week high point — that compares with a last trade of $27.11. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Also see:
Preferred Stocks By Industry
MS Options Chain
FDX RSI
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Notable ETF Outflow Detected - SCHD, LMT, PEP, MRK

(RTTNews) - Merck & Co Inc. (MRK) and Eisai oCo. Ltd (ESALY.PK) on Tuesday said that the Phase 3 LITESPARK-011 trial evaluating Merck's WELIREG in combination with Eisai's LENVIMA met one of its primary endpoints of progression-free survival (PFS) in patients with advanced renal cell carcinoma (RCC) whose disease had progressed on or after treatment with anti-PD-1/L1 therapy.
The combination demonstrated a statistically significant and clinically meaningful improvement in PFS compared with cabozantinib at an interim analysis. Overall survival (OS), the study's other primary endpoint, will be evaluated at a future analysis.
Merck and Eisai said the safety profiles of WELIREG and LENVIMA were consistent with previous studies of the individual therapies, and no new safety signals were observed.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Merck Says WELIREG,LENVIMA Combination Therapy Meets PFS Goal In Phase 3 Kidney Cancer Trial

Key Points
Pfizer currently has a 7% yield, and the company is making important business moves.
Bristol Myers Squibb has a 5.6% yield and has been building its drug pipeline with acquisitions.
Merck has a 3.7% yield and a lot of leeway to protect its dividend.
The S&P 500 index was recently offering a tiny dividend yield of 1.2%. You can get as much as 7% from some of the world's largest drugmakers. But sometimes, a high yield is a sign of risk.
What does the risk-return profile look like for iconic pharmaceutical giants Pfizer (NYSE: PFE), Bristol Myers Squibb (NYSE: BMY), and Merck (NYSE: MRK)? Working from highest yield to lowest, here's a quick look.
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1. Pfizer has a 7% yield and is making big moves
Pfizer has increased its dividend annually for 15 years. The current dividend yield is roughly 7%, which is well above the market's yield and the 1.1% yield of the average pharmaceutical company. The big worry among investors with Pfizer is likely the trailing-12-month dividend payout ratio of 90% -- that and the fact that Pfizer cut its dividend when it acquired Wyeth in 2009 for $68 billion.
That's important because Pfizer recently announced plans to acquire Metsera for $4.9 billion (plus potential earnouts) to bolster its drug pipeline. It's a smaller deal than Wyeth was. But even if all of the earnouts are triggered (adding another $22.50 to the upfront price of $47.50 per share), the high dividend payout ratio here increases the risk that the board resets the dividend lower.
The Metsera deal does show that Pfizer is doing what it needs to do to ensure it survives and thrives over the long term. Still, it's probably best to look at Pfizer as a value or turnaround play rather than a high-yield stock. On the valuation front, its price-to-sales (P/S), price-to-earnings (P/E), and price-to-book (P/B) ratios are all below their five-year averages. If the dividend holds, it will be icing on the cake.
2. Bristol Myers Squibb yields 5.6% and it's buy, buy, buying
One of the issues Pfizer is trying to avoid is a patent cliff, which is when older drugs lose patent protection, making revenue fall. The hope is that new drugs can be brought to market before that happens (or at least shortly thereafter). All major drugmakers have to deal with this, including 5.6%-yielding Bristol Myers Squibb. Although the company has 19 years of annual dividend increases behind it, its payout ratio is an even higher 99% right now.
But BMS has been particularly active on the acquisition front. In 2024 it bought oncology-focused Mirati Therapeutics and RayzeBio; it also added neurology-focused Karuna Therapeutics to the fold. Basically, the company has bulked up its drug pipeline, and that should help carry it through upcoming patent losses (which start next year), even though the exact timing of new products may not line up as perfectly as hoped.
From a valuation perspective, only the price-to-sales ratio is below its five-year average. The P/E isn't overly useful because recent losses mean there's no five-year average. And the P/B ratio is above the longer-term average. As with Pfizer there's some risk of a dividend cut here, but unlike Pfizer, Bristol Myers Squibb doesn't have a dividend cut in its history over the past three decades. If history is any guide, the dividend is more likely to be held steady for a spell than it is to be cut.
3. Merck has a 3.7% yield and a reasonable payout ratio
Merck is dealing with the same basic issues as both Pfizer and Bristol Myers Squibb -- they're all drug companies, after all. But there's an important difference. Merck's 3.7% yield is lower and a reflection of a more attractive risk-reward profile. Specifically, Merck's dividend payout ratio is fairly reasonable at around 50%. There's a lot more room for adversity here.
On the valuation front, Merck's P/S, P/E, and P/B ratios are all below their five-year averages. To be fair, 2029 and 2030 are likely to see patent cliffs, but Merck has a solid pipeline that should start to kick in pretty quickly thereafter. And it has some opportunities to protect its most important patent, Keytruda, for a little longer, using international patents and different delivery methods. So the hit could be less of a concern than it seems. The lower yield here is an indication that the risk-reward profile is not nearly as worrisome.
All three will survive, but the investment risks are different
It is highly unlikely that Pfizer, Bristol Myers Squibb, or Merck will suddenly go out of business. The worst-case scenario for dividend investors in each case is likely a dividend cut. But if you're trying to live off of your dividend income, that could be a pretty big risk.
Pfizer, with the highest yield, comes with the most risk given its dividend history. Bristol Myers Squibb falls in the middle. With Merck it looks like there's little to no risk of a cut, but you'll also have to accept a fairly low yield compared to the other two drug stocks. In the end, that might be the best option for risk-averse dividend investors looking for a discounted drug stock.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Dividend-Paying Drug Stocks to Buy at a Discount

Dr. Reddy's Laboratories Limited RDY reported second-quarter fiscal 2026 earnings of 19 cents per American Depositary Share (ADS), which beat the Zacks Consensus Estimate of 18 cents. The company reported earnings of 17 cents per ADS in the year-ago quarter.
Revenues grew 9.8% year over year to $992 million, surpassing the Zacks Consensus Estimate of $983 million. The year-over-year improvement was primarily driven by growth in global generics revenues.
RDY’s Q2 Results in Detail
Dr. Reddy’s reported revenues under three segments — Global Generics, Pharmaceutical Services & Active Ingredients (PSAI) and Others.
Global Generics revenues totaled INR 78.5 billion, up 10% year over year. The increase was primarily driven by revenues from the acquired Nicotine Replacement Therapy portfolio in the Europe segment and sustained performance in RDY’s branded markets.
Dr. Reddy’s launched seven new products in North America during the reported quarter. However, revenues in the North America segment declined 13% primarily due to increased price erosion in certain key products, including Lenalidomide, partly offset by favorable forex and contribution from new product launches.
As of Sept. 30, 2025, a total of 75 generic filings were pending approval from the FDA, comprising 73 abbreviated new drug applications (ANDAs) and two new drug applications. Of these 73 ANDAs, 45 are Para IVs.
Shares of Dr. Reddy’s have lost 7.6% year to date against the industry’s 0.6% growth.
Image Source: Zacks Investment Research
PSAI revenues amounted to INR 9.5 billion, up 12% year over year. The improvement was driven by the launch of new active pharmaceutical ingredients (APIs) and favorable forex. Growth in the pharmaceutical services business also contributed to the year-over-year increase.
Revenues in the Others segment totaled INR 0.1 billion, down 42% on a year-over-year basis.
Gross margin declined 492 basis points to 54.7% in the second quarter of fiscal 2026 due to higher price erosion in generics and reduced operating leverage.
Research and development (R&D) expenses of $70 million were down 15% year over year as investments in biosimilars tapered following the completion of major funding for the Abatacept biosimilar candidate. R&D spending instead focused on complex generics, biosimilars, APIs and novel biologics, particularly in oncology, peptides, and injectables.
Selling, general and administrative expenses totaled $298 million, up 15% year over year. The rise was primarily driven by increased sales and marketing investments aimed at enhancing existing brands and supporting new consumer healthcare initiatives.
Key Update From RDY
Last month, Dr. Reddy’s announced that the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending marketing authorization for AVT03 (denosumab), a proposed biosimilar to Amgen’s AMGN Prolia and Xgeva. The opinion will now be reviewed by the European Commission, which will make the final decision on marketing authorization across the European Economic Area, including the EU, Norway, Iceland, and Liechtenstein. A separate submission to the regulatory body in the United Kingdom is also planned.
The development of AVT03 stems from a 2024 partnership between Dr. Reddy’s and Alvotech ALVO, under which Alvotech is responsible for development and manufacturing, while Dr. Reddy’s handles regulatory and commercialization activities in key markets. Dr. Reddy’s holds exclusive commercialization rights in the United States and semi-exclusive rights in Europe and the United Kingdom. Once approved, the biosimilar will be marketed as Acvybra (60 mg/mL) and Xbonzy (70 mg/mL). Earlier this year, RDY and ALVO also announced the FDA’s acceptance of a regulatory filing seeking approval of AVT03 in the United States for review. AVT03 is a human monoclonal antibody developed by Alvotech.
Amgen's Prolia treats osteoporosis in postmenopausal women at high risk of fractures, especially when other treatments are ineffective. AMGN’s Xgeva helps prevent fractures, spinal cord compression and the need for bone-related surgery or radiation in patients with multiple myeloma or bone metastases from solid tumors.
RDY and ALVO also have a partnership agreement to co-develop and commercialize a biosimilar candidate to Merck’s MRK blockbuster PD-L1 inhibitor, Keytruda (pembrolizumab), across the world. Per the agreement, RDY and ALVO will jointly share all costs for developing and manufacturing the biosimilar candidate to MRK’s Keytruda, which is approved for treating several types of cancer indications. Each company will hold the right to commercialize the product globally upon successful development.
Dr. Reddy's Laboratories Ltd Price, Consensus and EPS Surprise
Keytruda, Merck’s biggest revenue driver, generated sales worth $29.5 billion in 2024. Sales of the drug grew 6.6% year over year to $15.1 billion in the first half of 2025. Keytruda has played an instrumental role in driving Merck’s steady revenue growth in the past few years.
In September, Dr. Reddy’s signed an agreement to acquire the Stugeron portfolio from Johnson & Johnson, marking its entry into the anti-vertigo market. The deal includes the flagship Stugeron brand and its variants across 18 markets in APAC and EMEA, with India and Vietnam as key focus areas. Stugeron, a leading cinnarizine brand for vertigo treatment, enhances Dr. Reddy’s central nervous system portfolio and expands its presence in a growing therapeutic segment.
RDY's Zacks Rank
Dr. Reddy’s carries a Zacks Rank #3 (Hold) at present.
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Dr. Reddy's Q2 Earnings Beat Estimates, Generics Sales Boost Revenues

The third-quarter 2025 reporting cycle for the Medical sector is about to pick up pace this week, as most firms are slated to share their earnings results over the next two weeks. The sector mainly comprises pharma/biotech and medical device companies. The earnings season for the drug and biotech sector kicked off around mid-October when bellwether Johnson & Johnson reported strong third-quarter results, beating estimates for earnings and sales. J&J consequently raised its sales expectations for 2025 to reflect a strong operational performance so far this year.
While most of the pharma bigwigs are slated to report their earnings results later this week, Roche posted solid growth in the first nine months of 2025 as high demand for key drugs like Phesgo (breast cancer), Xolair (food allergies), Hemlibra (hemophilia A), Vabysmo (severe eye diseases) and Ocrevus (multiple sclerosis) offset the decline in sales of legacy drugs. Consequently, Roche now expects higher earnings per share growth in 2025.
Per the Earnings Trends report, as of Oct. 22, 13.3% of the companies in the Medical sector — representing 26.8% of the sector’s market capitalization — reported quarterly earnings. Of these, 87.5% exceeded earnings estimates, while an equal share also topped revenue expectations. Earnings increased 7.4% year over year, while revenues increased 9.8%. Overall, third-quarter earnings of the Medical sector are expected to decrease 4.3%, while sales are projected to rise 8.1% from the year-ago quarter.
Eli Lilly LLY, Merck MRK, AbbVie ABBV, Bristol Myers BMY and Gilead Sciences GILD are all slated to release theirquarterly results this week. Let us examine how these biotech/pharma companies are likely to have performed in the soon-to-be-reported quarter.
Eli Lilly
Lilly’s performance has been mixed, with the company exceeding earnings expectations in two of the trailing four quarters and missing the same on the other two occasions. It delivered a four-quarter negative earnings surprise of 2.31%, on average. In the last reported quarter, LLY delivered an earnings surprise of 12.48%.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Lilly has an Earnings ESP of -0.66% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for sales and earnings for the third quarter is pegged at $16.01 billion and $6.02 per share, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lilly is expected to deliver another strong quarter, driven by robust demand for its blockbuster GLP-1 drugs (Mounjaro and Zepbound), improved supply, deeper U.S. market penetration and expanding international launches. Beyond its cardiometabolic portfolio, LLY’s oncology and immunology drugs, including Verzenio, Taltz, and newer launches like Omvoh, Ebglyss and Jaypirca, are also expected to have supported steady top-line expansion in the third quarter.
Lilly is scheduled to release its quarterly earnings results before the opening bell on Oct. 30.
Eli Lilly and Company Price and Consensus
Merck
Merck has an encouraging earnings track record. It beat earnings estimates in each of the last four quarters, delivering an average earnings surprise of 3.92%. In the last reported quarter, MRK beat earnings estimates by 5.97%.
Merck has an Earnings ESP of -0.09% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for sales and earnings for the third quarter is pegged at $17.06 billion and $2.36 per share, respectively.
Merck’s top-line growth in the third quarter is likely to have been driven by higher sales of its blockbuster cancer drug Keytruda, attributable to additional indications and patient demand.
Merck is scheduled to release its quarterly earnings results before the opening bell on Oct. 30.
Merck & Co., Inc. Price and Consensus
AbbVie
AbbVie has an impeccable earnings track record to date. ABBV’s earnings beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 2.46%. In the last reported quarter, AbbVie’s earnings beat estimates by 2.77%.
For the quarter to be reported, AbbVie has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present. The Zacks Consensus Estimate for sales and earnings for the third quarter is pegged at $15.59 billion and $1.80 per share, respectively.
AbbVie’s top line is expected to have been driven by robust sales of key drugs Rinvoq, Skyrizi, Venclexta and Vraylar, coupled with significant contributions from newer drugs, namely Ubrelvy, Epkinly, Qulipta and Vyalev.
ABBV is scheduled to report its quarterly earnings results on Oct. 31, before the opening bell.
AbbVie Inc. Price and Consensus
Bristol Myers
Bristol Myers has an excellent earnings track record. BMY’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 22.71%. In the last reported quarter, Bristol Myers’ earnings surpassed estimates by 36.45%.
Bristol Myers has an Earnings ESP of -1.03% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for sales and earnings for the third quarter is pegged at $11.83 billion and $1.51 per share, respectively.
Bristol Myers’ revenues in the third quarter of 2025 are likely to have been positively impacted by an increase in growth portfolio sales. The growth portfolio primarily comprises Opdivo, Orencia, Yervoy, Reblozyl, Opdualag, Abecma, Zeposia, Breyanzi, Camzyos, Sotyku, Krazati and others. However, total quarterly revenues are likely to have been adversely affected by a decline in sales from the legacy portfolio, which includes Eliquis, Revlimid, Pomalyst, Sprycel and Abraxane, among others.
Bristol Myers is slated to release its quarterly earnings results before the opening bell on Oct. 30.
Bristol Myers Squibb Company Price and Consensus
Gilead Sciences
Gilead has an encouraging earnings track record so far. It beat earnings estimates in three of the last four quarters, missing the mark on the remaining occasion, delivering an average surprise of 11.04%. In the last reported quarter, GILD beat earnings estimates by 3.08%.
For the third quarter of 2025, Gilead has an Earnings ESP of -1.34% and a Zacks Rank #3. The Zacks Consensus Estimate for sales and earnings for the third quarter is pegged at $7.46 billion and $2.15 per share, respectively.
Gilead’s flagship HIV therapies — Biktarvy and Descovy — are likely to have boosted the company’s top line. However, the company’s revenues are likely to have been impacted by the new Medicare Part D model, which increases manufacturer discount obligations during the initial coverage and catastrophic phases and offers additional discounts for people who qualify for the low-income subsidy program, a group significantly affected by HIV.
Gilead is slated to report its third-quarter 2025 earnings results on Oct. 30, after market close.
Gilead Sciences, Inc. Price and Consensus
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

What's in Store for These 5 Pharma Bigwigs This Earnings Season?

Key Points
Intuitive Surgical just put up a strong quarter, reminding Wall Street that it is a growth stock.
Merck is a drug giant with a yield near the highest levels of the past decade and a reasonable payout ratio.
Johnson & Johnson is a medical device and pharmaceutical company that also happens to be a Dividend King.
If you are looking for a healthcare stock to add to your portfolio as October draws to a close, consider Intuitive Surgical (NASDAQ: ISRG), Merck (NYSE: MRK), and Johnson & Johnson (NYSE: JNJ). Each of them comes with a very different type of appeal. Here's why each one could be worth buying hand over fist, for the right investor.
1. Growth: Intuitive Surgical
Intuitive Surgical is a one-trick pony in that all it does is make surgical robots. That, however, is a pretty exciting medical device technology that is really only getting started. The big benefit is that surgical robots help improve patient outcomes thanks to increased precision and less invasive techniques. But there are two stories to watch here.
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The first issue that's important to monitor is the growth in the company's installed base of surgical robots. In the third quarter of 2025, the company's da Vinci system saw a 13% increase in its installed base. The company's newer Ion endoluminal system benefited from a 30% increase. Overall, this growth resulted in 20% more procedures using Intuitive Surgical's robots in the quarter, year over year. Very clearly, this company is still growing strongly.
The second big issue, however, is a bit more subtle. Roughly 75% of the revenue on Intuitive Surgical's income statement come from services and instruments and accessories. So the growth in the installed base is building a powerful annuity-like income stream. If you are focused on growth, Intuitive Surgical's shares are still down about 15% from their 52-week highs and could be worth a closer look.
2. High yield: Merck
Merck is one of the largest pharmaceutical companies on the planet with a very long history of success behind it. That's no small feat, given that the drug industry is highly technical, ultra competitive, and tightly regulated. The company is dealing with some company-specific and industry-wide issues right now, but it seems highly likely that it will muddle through in fine shape. Most importantly, it is likely to get through while still supporting its historically high 3.7% dividend yield.
There's nothing all that shocking going on here. Merck has some drugs that are set to see their patents expire. This is known as a patent cliff. Investors are worried that it won't find new drugs to offset the hit. The timing of new drugs may not match exactly with the loss of revenue from older drugs, but it seems likely that this is a short-term issue.
The best part here, other than the dividend being near the high end of its 10-year range, is that Merck's dividend payout ratio is a reasonable 50% or so. In other words, yield seekers can get a well-positioned drugmaker with a high yield and a dividend that looks secure.
3. Dividend King: Johnson & Johnson
If what you really want in a healthcare stock is to create an income stream that grows steadily over time, then you'll want to take a gander at Johnson & Johnson. The company is diversified across the drug and medical device sectors and is a major player in each one. While the yield is 2.7%, the real story is that J&J has increased its dividend annually for over six decades.
That streak makes J&J a Dividend King. But it isn't just any old Dividend King, it has the longest dividend streak of any healthcare stock. This clearly sets the company apart from the pack.
Given the company's size and the diversity of its business, there are almost always things to like and things to dislike about J&J. For example, on the negative side of things, it is dealing with lingering class action lawsuits around talcum powder that it sold. On the plus side, the drug business recently launched some new drugs that look like they have blockbuster potential, including Spravato, which helps patients deal with depression.
All in, if you want diverse healthcare exposure and a reliable, growing dividend, J&J will probably be your pick of this trio.
One of these healthcare stocks should fit the bill
October is almost over, but you still have time to buy Intuitive Surgical, Merck, and Johnson & Johnson. You probably won't buy all three, since they each have slightly different appeals. But if you take the time to dig in, you might find that one of them ends up in your portfolio before November gets underway.
Should you invest $1,000 in Merck right now?
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical and Merck. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Healthcare Stocks to Buy Hand Over Fist in October

(RTTNews) - Merck & Co., Inc. (MRK), known as MSD outside the U.S. and Canada, announced Monday that the U.S. Food and Drug Administration (FDA) has approved an update to the U.S. product label based on the Phase 3 ZENITH trial for WINREVAIR (sotatercept-csrk) for injection, 45mg, 60mg.
WINREVAIR, an activin signaling inhibitor, is now FDA-approved for the treatment of adults with pulmonary arterial hypertension to improve exercise capacity and WHO functional class (FC), and reduce the risk of clinical worsening events, including hospitalization for PAH, lung transplantation and death.
WINREVAIR was initially approved based on the pivotal STELLAR study in March 2024. Today's approval expanded the indication of WINREVAIR to include components of the clinical worsening events: hospitalization for PAH, lung transplantation and death.
In ZENITH, adding WINREVAIR to background therapy demonstrated a statistically significant and clinically meaningful 76% reduction in the risk of major morbidity and mortality outcomes in adults with PAH WHO functional class III or IV compared to placebo.
The trial's composite primary efficacy endpoint events — time to first occurrence of all-cause death, lung transplantation or PAH-worsening hospitalization of =24 hours — occurred in 15 WINREVAIR-treated participants (17%) versus 47 placebo-treated participants (55%).
Due to overwhelming efficacy based on the primary endpoint result, the ZENITH trial was stopped early at the interim analysis and patients were offered the opportunity to receive WINREVAIR through an open-label long-term follow-up study.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Merck Says FDA OKs Updated Indication For WINREVAIR In Adults With Pulmonary Arterial Hypertension

Key Points
DaVita's recession-resistant business is growing internationally, but shares continue to trade at a heavily discounted valuation.
Merck could be in for a major move if the pharma can soften the blow of an upcoming patent expiration.
Universal Health Services is undervalued and under the radar, trading at a big discount to peers despite promising growth prospects.
As more uncertainty hits the stock market, defensive sectors like healthcare are starting to look attractive once again. Healthcare stocks are a wide universe, with over 1,100 listed on major U.S. exchanges.
Many healthcare investors focus on faster-growing companies, or those in faster-growing segments of the sector, but it's a great place to find undervalued gems as well. Although plenty of stocks in this category are cheap for a reason, and are at risk of becoming value traps, there are a few where the market has overreacted, creating an ideal situation for contrarian investors.
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That's the situation with the following three undervalued healthcare stocks.
1. DaVita is not the value trap it appears to be at first glance
So far this year, shares in dialysis center operator DaVita (NYSE: DVA) have slumped, falling by around 14% since January. A variety of factors have put pressure on the stock.
These have included disappointing quarterly earnings releases, a ransomware attack, and reports on Warren Buffett's Berkshire Hathaway, a longtime DaVita shareholder, trimming its position.
However, while all of this gives DaVita some serious value-trap vibes, there are silver linings to these perceived negatives. Berkshire's steady selling has to do with a shareholder agreement in which it sells shares back to DaVita when its ownership percentage exceeds 45%. This happens often because DaVita continues to aggressively repurchase shares.
Regarding earnings, DaVita is expanding internationally. This growth, coupled with the stability of its U.S.-based core business, could mean more well-received quarterly earnings releases in the future. The stock, trading at a forward price-to-earnings ratio (P/E) of 11, could experience valuation expansion as well.
2. Merck could surge once its patent expiration issue is resolved
Merck (NYSE: MRK) has yet to release a blockbuster drug for weight loss, but the pharmaceutical giant continues to report strong earnings, namely from its cancer drug Keytruda. The issue, however, is that the drug's patent protection expires in 2028.
When that happens, the release of generic biosimilars will likely lead to a severe reduction in Keytruda sales. So it's not surprising you can buy this stock today for just 9 times forward earnings. However, Merck could find a solution to this big problem.
The launch of Keytruda Qlex, a subcutaneously administered version, may mitigate the impact. Merck also has 20 potential blockbuster drugs in its pipeline, representing $50 billion in potential revenue. If these efforts calm worries about Keytruda, the stock could experience a moderate re-rating to a forward valuation in the low to mid-teens, on par with other pharma stocks.
3. Earnings growth could boost Universal Health Services
Universal Health Services (NYSE: UHS) owns facilities for acute care and behavioral healthcare services. Although it's on the smaller end of large-cap stocks -- valued at $13 billion -- not to mention steadily profitable, shares trade at a discount to similar names.
The stock trades for only 9 times forward earnings estimates, while hospital operators like Tenet Healthcare and HCA Healthcare trade for 13 and 15 times forward earnings, respectively.
Still, assuming Universal Health Services' earnings keep growing in line with sell-side analysts' forecasts, not only could the stock rise in tandem with earnings growth, but there may also be room for shares to experience a moderate re-rating as well.
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The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and DaVita wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
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Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Merck. The Motley Fool recommends HCA Healthcare. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Merck & Company, Inc.

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