5. Merck & Co.

Merck's revenues grew to more than $42 billion last year as Keytruda continues to post strong growth. (Merck)

Merck & Co.
2018 revenue: $42.29 billion
2017 revenue: $40.12 billion 
Headquarters: Kenilworth, New Jersey

It’s not hard to see how Merck grew its revenues in 2018, what with Keytruda’s sales swelling by billions. But the PD-1 superstar wasn’t in it alone.

The drugmaker’s vaccines and animal health unit also chipped in last year, helping the New Jersey drugmaker eclipse declining Sanofi to move into the No. 5 spot in Big Pharma. Merck's pharma sales, which comprise drugs and vaccines, expanded to $37.69 billion from $35.39 billion the year prior, and animal health inched to $4.21 billion from $3.88 billion.

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That said, it was Keytruda that made the biggest leap, bringing in $7.17 billion compared with $3.81 billion in 2017. The pharma giant has the drug’s position in the previously untreated lung cancer market to thank for much of that increase; early in the year, it posted a wealth of positive data that helped it take off in the indication, unchallenged by its in-class rivals.

But Keytruda also has a number of smaller approvals working in its favor, too. Last year, Merck picked up a slew of FDA green lights in areas including cervical cancer, primary mediastinal large B-cell lymphoma and Merkel cell carcinoma. And Merck is working to add to that list in 2019; it’s currently waiting for the FDA to sign off on Keytruda as a treatment for esophageal cancer and previously untreated head and neck cancer, to name a couple of potential new indications.

Aside from Keytruda, though, a couple of big factors helped Merck pummel its oncology sales haul from prior years—and those were Lynparza and Eisai, two drugs the company shelled out big money on to gain access to half their revenues. It handed AstraZeneca $8.5 billion in July 2017 for a 50% share of Lynparza, and it followed up with a $5.8 billion Lenvima agreement with Eisai in March of last year. Merck is testing both products as part of combinations in a number of different areas, and so far its Lynparza partnership has proved especially fruitful.

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With all the oncology success, the company has faced recent calls to diversify its business—but as it’s reminded investors, it already boasts other revenue streams. “Unprecedented” Gardasil 9 demand helped the company deliver a big bump in vaccines revenue, with sales of the franchise climbing to $3.15 billion for the year from $2.31 billion in 2017.

And then there’s animal health, which some industry watchers have proposed hiving off. Merck likes the portfolio, though; earlier this year, CEO Ken Frazier called its veterinary business “the market leader” when it comes to growth and profit margins.

“That business has not suffered being a part of Merck,” he said at January’s J.P. Morgan Healthcare Conference.

Meanwhile, not all of Merck’s products turned it up in 2018. The company’s hepatitis C treatment, Zepatier, suffered alongside its rivals, hurt by payer pressure and lowered demand. And shingles vaccine Zostavax took a hit, too, as new GlaxoSmithKline entrant Shingrix made a splash.

5. Merck & Co.