2. Keytruda

As Merck leans more heavily on Keytruda, investors have started to question business beyond the PD-1 inhibitor. (Merck & Co.)

Company: Merck & Co.
2020 sales: $14.38 billion
Key patent expiration: 2028

First approved by the FDA in 2014, Keytruda is still very much on a growth trajectory. Even amidst a pandemic, the drug pulled off a year-over-year sales increase of 30% in 2020 with a total haul of $14.4 billion.

Multiple indications are fueling the performance, including metastatic non-small cell lung cancer—where it’s established as the standard of care for newly diagnosed patients—plus kidney cancer, post-surgery melanoma and bladder cancer, among others.

RELATED: The top 20 drugs by worldwide sales in 2020 | 2. Keytruda

The list is only getting longer, too. As of the end of March, more than 1,450 clinical trials were testing the PD-1 inhibitor in 30-plus cancer types, with more than 1,050 trials combining it with other cancer treatments, according to a securities filing.

With targeted drugs and other immunotherapies, Merck and partners are building on Keytruda’s known effect on immune checkpoint blockade in hopes of achieving tighter clamps of cancer. One recent success is a cocktail with Eisai-partnered Lenvima, which at least one analyst suggested has the best data for a combination of an immuno-oncology agent and a tyrosine kinase inhibitor in first-line kidney cancer.

Still, Keytruda research in metastatic disease is about evolving to stay ahead of the competition in an increasingly saturated market. The real growth opportunity, as analysts see it, lies in the perioperative settings known as neoadjuvant or adjuvant treatments. Treatment before and after surgical removal of tumors could see Keytruda reach $7.2 billion in sales by 2028, Bernstein analysts said in a recent note. And the number could swell to as much as $17 billion if Keytruda shows best-in-class results, the Bernstein team figured.

RELATED: How can the $23B market for PD-1 blockers grow? 'Pan-adjuvant' use is key: report

As the undoubted king of the PD-1/L1 inhibitor class, Keytruda is expected to dethrone AbbVie’s Humira and become the world’s biggest-selling drug in 2023, Evaluate Pharma predicted in an annual preview report published in December. The drug could hit $24.32 billion in global sales in 2026, according to a separate Evaluate tally in April 2020.

But on the flip side, the more successful Keytruda becomes today, the better Merck needs to prepare before the drug falls off the patent cliff in 2028. Biosimilars are already brewing. A Canadian company called PlantForm Corporation recently unveiled a collaboration with the Brazilian Ministry of Health’s Bio-Manguinhos/Fiocruz to develop a copycat of Keytruda for the Brazilian market. Sydney-based NeuClone Pharmaceuticals teamed with Serum Institute of India on ten biosimilar projects, including one referencing Keytruda.

A few internal R&D programs could help compensate for the biosimilar assault. These include the 15-valent pneumococcal vaccine V114, which could rival Pfizer’s megablockbuster Prevnar 13 and its newly approved follow-up shot Prevnar 20. Merck's P2X3 receptor antagonist gefapixant, currently under FDA review for chronic cough, also has potential applications in a broad range of diseases.

But none of them will likely be enough to fill Keytruda’s revenue shoes, so Merck’s also looking outside for business development opportunities.

RELATED: After $600M sales hit from pandemic, Merck's open to 'all forms' of M&A deals, incoming CEO says

Merck is “open to all forms of deals” and has the capital to go for them, incoming CEO Rob Davis said during a conference call in April. The New Jersey pharma just collected $9 billion in cash by spinning off its women’s health, biosimilar and established drugs into Organon.

“We are open to any opportunity to add a meaningful asset,” David said. When it comes to size, Davis said he’s not looking at a dollar amount but “complexity and the disruption it brings” to the company.

It's laying the groundwork already, though so far mostly with bolt-on deals. The company just bought Pandion Therapeutics for about $1.9 billion and obtained an IL-2 drug for the potential treatment of autoimmune diseases. It also recently shelled out $2.75 billion to take in VelosBio to develop a potential first-in-class ROR1 antibody-drug conjugate for cancer.

2. Keytruda