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On Merck’s Q4 earnings call, CEO Rob Davis said Keytruda’s patent estate could extend U.S. market protection beyond the widely modeled December 2028 LOE, citing additional method-of-making (to May 2029) and method-of-use (to November 2029) patents that could delay biosimilar entry. Merck is still modeling 2028 as the “conservative” assumption, even as Keytruda annual sales topped $30B and Q4 Keytruda/Qlex sales were ~ $8.4B (+7% YoY).
Why It Matters To Oncology
If method patents hold, biosimilar timing for the PD-1 backbone of many regimens could shift by ~5–11 months (May/Nov 2029 vs Dec 2028), affecting formulary planning and trial-era assumptions about post-LOE pricing dynamics.
Merck framed its increased confidence as driven by “emerging case law,” underscoring how non-compound IP (manufacturing and use claims) can be decisive for biologic lifecycle strategy.
Subcutaneous Keytruda Qlex is positioned as a utilization and site-of-care lever: Merck expects 30–40% penetration by 2028; Q4 revenue was $35M, with ~40% of clinicians in a recent poll reporting early routine-use integration.
The Financials
Keytruda/Qlex Q4 sales: ~ $8.4B, up 7% YoY; Qlex: $35M.
Merck Q4 2025 total sales: $16.4B (+5% YoY); full-year 2025 sales: $65B (+1%).
2026 guidance: $65.5B–$67B (top end below ~$67.6B analyst expectations); Merck anticipates a $2.5B revenue headwind (generics/IRA for Januvia, plus weaker Lagevrio).
What They're Saying
Rob Davis: Merck has become more confident it can “defend the entire patent estate,” creating “potential” protection through May or November 2029 — but the company still models 2028 LOE as the conservative case.
Davis also flagged IRA pressure: Keytruda faces IRA pricing impact beginning in 2029; Merck has previously suggested selection for negotiation could occur as early as this year, with negotiated prices potentially effective in early 2028 (Keytruda was not on CMS’ latest list).
BMO’s Evan Seigerman: Q4 results provide a “reasonable foundation” heading into 2026, though the revenue outlook could temper expectations.
What's Next
Watch for biosimilar litigation and PTAB/court developments that test whether Keytruda’s method-of-making and method-of-use claims can meaningfully extend exclusivity beyond the compound patent.
Track Qlex uptake versus Merck’s 30–40% by-2028 target, and whether payer/provider workflows accelerate switching ahead of any LOE window.
Monitor IRA timelines: potential selection/negotiation signals and how any negotiated price (if applicable) interacts with the 2028–2029 exclusivity debate.
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