Merck to create separate cancer division as Keytruda patent loss looms

By Padmanabhan Ananthan

Feb 23 (Reuters) - Merck ‌said on ​Monday it ​would create a separate division for its cancer business, anchored by its top-selling drug Keytruda, as the U.S. drugmaker braces for the ‌upcoming patent expiry of the blockbuster treatment.

The company's major growth driver ⁠Keytruda, approved for several forms of cancers, is the best-selling prescription medicine in the world. ‌The treatment generated more than $30 billion ‌in 2025 and accounted for nearly half of the company's total revenue. Key patents on Keytruda will begin to expire in 2028.

"Management must believe that ​having oncology organized as its own unit will help the company drive pipeline successes that can help mitigate Keytruda's loss of exclusivity," said James ⁠Harlow, senior vice president at investment firm Novare Capital Management, which owns more than 100,000 Merck shares.

The split ​also gives Merck more optionality to separate or spin off one of these businesses in the future, Harlow said.

As part of ​the reshuffling, Merck's human-health business will be ‌split into two — one housing its oncology portfolio and the other will include all of its non-cancer medicines. The split does ⁠not involve the company's animal health division.

Citi analysts said the split would help to more clearly distinguish Merck's mature oncology portfolio from its newer, acquisition-driven assets, but warned that ⁠more work is still needed in commercial execution, business development and pipeline delivery to fully ​offset upcoming patent pressures.

Merck has been building up its late-stage drug pipeline since 2021 and signed several deals, including buying of Cidara Therapeutics and Verona Pharma for roughly $10 billion each last ‌year, to broaden its portfolio.

The company had spun off its women's health and biosimilars business in 2021 into a standalone ‌company called Organon.

The latest announcement follows Merck's downbeat 2026 forecast issued earlier this month, ⁠where it warned of lower-than-expected ‌sales and profit as several ​legacy drugs near loss of exclusivity and face generic pressure.

(Reporting by Padmanabhan Ananthan in Bengaluru; Writing by Mrinalika Roy; Editing by ‌Shilpi Majumdar)

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