Merck & Company (MRK)

He hopes the good news (melanoma treatment) is the start of a wave of drugs to tackle cancer. Keytruda could be extended beyond 2028 (when it goes off patent) if it holds other uses. This is a huge day for society.

Over the last 3 years there's been only low-single digit revenue growth, but the cancer trial breakthrough today is great news for the stock and society. However, the valuation is historically rich.

Keytruda makes up half of sales, which makes the market nervous, because the drug faces a patent cliff in a few years. Their pipeline is deep, and the acquisitions they made will replenish that pipeline. Even when it goes off-patent, Keytruda will remain a preferred drug by doctors.

Many drugs in the pipeline, and this compensates for older drugs going off patent. For example, it's blockbuster Keytruda is going off. You want companies that deliver double-digit revenue growth on offerings.

Today's downward move isn't all that outsized. There's been more clarity on US drug pricing. Seeing a bit of market exhaustion, as US pharma is trading at huge premiums relative to their own history.

Rerating from pricing clarity has already been baked in. R&D pipeline in the sector is a mixed bag, doesn't trust it.

He bought it for their strong drug pipeline and is happy to stay here.

One of her holdings in the space. This higher-quality name has both growth and less execution risk.

Erratic and bumpy name. Concerns about Keytruda falling off. Pipeline (looking pretty good), execution, and valuation story. Trades at 12x PE. Just beat Q4, revenue beat. All things considered, you can own this.

Pharmas are coming back. Political policy is improving. Keytruda makes up a lot of revenues but faces a patent cliff in 2028. But MRK has invested a lot in new drugs and been buying companies strategically.