New York, Jan 9, 2026, 20:01 (EST) — Market closed.
- Merck shares slipped 0.4% following reports that the company is negotiating to acquire Revolution Medicines in a deal that could reach $32 billion
- Changes in U.S. vaccine policies have brought increased scrutiny to Merck’s Gardasil and RotaTeq franchises
- Wolfe Research upgraded Merck, citing a move toward an under-the-skin alternative to Keytruda
Merck & Co (MRK.N) shares slipped on Friday following reports that the pharma giant is in talks to acquire cancer-focused biotech Revolution Medicines (RVMD.O) for as much as $32 billion. Merck ended the day down 0.4% at $110.53, after swinging between $110.26 and $112.46. (Reuters)
The possible bid comes as Merck looks to bolster its oncology portfolio ahead of patent cliffs on its blockbuster Keytruda later this decade. Such a deal would arrive amid investor pressure on big pharma to weigh pipeline investments against buybacks and dividends, especially with interest rates continuing to bite.
The Financial Times report warned the talks might still collapse, with other major drugmakers also eyeing Revolution. The biotech is working on drugs targeting RAS mutations linked to cancers like pancreatic, lung, and colorectal. If the deal goes through, Merck would gain access to Revolution’s late-stage daraxonrasib, currently under FDA fast-track review, according to Reuters. Mizuho analysts project Revolution’s RAS portfolio could generate over $10 billion in risk-adjusted sales by 2035.
Merck has found itself on the defensive over vaccines. The company pushed U.S. health officials to ground any changes to the childhood and adolescent immunization schedule in “comprehensive data” after several vaccines were downgraded from “universally recommended” to “shared clinical decision-making.” That means parents are now advised to consult healthcare providers rather than follow a set schedule. Bernstein analysts put the potential hit to Merck’s revenue at around $2 billion annually, mainly due to its RotaTeq and Gardasil franchises. (Reuters)
On Thursday, the Vaccine Integrity Project at the University of Minnesota announced it will conduct its own review of the new single-dose HPV vaccine recommendation, which conflicts with Gardasil’s current U.S. label. “Our goal is to ensure that policymakers, clinicians, and the public have an accurate understanding of what the data actually show,” said the group’s director, Michael Osterholm. Merck noted regulators had previously expressed concerns that a one-dose schedule might be less effective or durable. Reuters reported that Merck posted $2.4 billion in U.S. Gardasil sales in 2024. (Reuters)
Wolfe Research upgraded Merck to “Outperform,” setting a $135 price target. The firm highlighted Merck’s shift with Keytruda toward KEYTRUDA QLEX, a subcutaneous version meant to replace IV infusions. Analyst Alexandria Hammond predicts 41% of Keytruda’s revenue will come from this new format by 2029, boosting the franchise’s revenue by $6 billion by 2030. (GuruFocus)
That said, the “ifs” stack up. Revolution’s top candidates remain in trials, and any bidding war would drive up costs for Merck, sparking debate on how soon a pipeline success might offset Keytruda’s pressure. Meanwhile, vaccine policies are shifting rapidly, making short-term demand tough to predict.
Traders kept an eye on the $110 level following Friday’s range, aiming next for a move toward $112-$113. Ahead on the calendar: Merck’s presentation at the J.P. Morgan Healthcare Conference on Jan. 12, the U.S. consumer price report due Jan. 13, and Merck’s quarterly earnings release on Feb. 3. (Merck)
