Merck: Aggressive M&A Efforts To Prepare For A Keytruda Patent Cliff

The Value InvestorInvesting Group LeaderFollow5ShareSavePlay(8min)CommentsSummaryMerck is aggressively expanding its oncology pipeline with the $5.7B acquisition of Terns Pharmaceuticals, targeting chronic myeloid leukemia.Merck remains heavily reliant on Keytruda, now over 50% of sales, with patent expiry risks looming in 2028-2029 despite pipeline efforts.Recent M&A, including Cidara and Terns, increases net debt to ~$50B but maintains leverage at manageable levels given ~$27B EBITDA.I remain cautious at current valuation due to high expectations, increased leverage, and concentration risk, despite reasonable adjusted earnings and solid dividend yield.Looking for a helping hand in the market? Members of Value In Corporate Events get exclusive ideas and guidance to navigate any climate. Learn More » Sundry Photography/iStock Editorial via Getty Images Towards the end of the first quarter, Merck (MRK) announced a larger acquisition to ignite some appeal in its pipeline. This was the second-largest deal announced in recent times, as Merck is spending a combined $15This article was written byThe Value Investor27.72K FollowersFollowThe Value Investor has a Master of Science with specialization in financial markets and a decade of experience tracking companies via catalytic company events. As the leader of the investing group Value In Corporate Events they provide members with opportunities to capitalize on IPOs, mergers & acquisitions, earnings reports and changes in corporate capital allocation. Coverage includes 10 major events a month with an eye towards finding the best opportunities. Learn more.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.