Imbruvica vs Keytruda Analysis Shows Why Merck (NYSE:MRK) Stock Is Worth Buying Now

- September 7, 2017

Imbruvica and Keytruda are two of the biggest breakthrough cancer drugs in history. Both are expected to have broad usage with Imbruvica for various types of blood cancer and Keytruda as the superior drug in a class known as anti PD-1 and PD-L1. Merck & Co (NYSE:MRK) is the manufacturer of Keytruda whereas Johnson & Johnson (NYSE:JNJ) and AbbVie Inc (NYSE:ABBV) share in Imbruvica’s costs and revenue.

Back in 2015, AbbVie purchased Imbruvica with its acquisition of Pharmacyclics for $21 billion. That massive purchase price entitled AbbVie (NYSE:ABBV) to 50% of Imbruvica’s revenue, while only being responsible for 40% of the costs. Johnson & Johnson (NYSE:JNJ) maintained its remaining share.

Clearly, the massive purchase price for just half of a drug implies both incredibly high expectations and an equally massive valuation for the drug as a whole. This realization is what makes Merck & Co (NYSE:MRK) look so attractive.

I created the above chart while playing around on the HADE Platform, accessing and visualizing various data points. I started comparing and contrasting the performance of drugs. I noticed that Keytruda and Imbruvica launched around the same time, and that Imbruvica had higher revenues in the first quarter of last year. As of Q2, Keytruda’s sales were nearly twice that of Imbruvica, from J&J.

Furthermore, check out the difference in growth rate below! That’s 52% growth for Imbruvica vs 180% growth for Keytruda!

With that said, Imbruvica is still one hell of a drug, one with mega blockbuster potential. However, if this data illustrates anything it is that the potential for Keytruda is simply ridiculous. This brings up a very important question, one to ask ourselves: If half of Imbruvica is worth $21 billion, then what is all of Keytruda worth? I think the answer could be mind boggling over time, for Merck stock owners.

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