Merck’s Cancer-Vaccine Trial Results Surpassed Expectations – So, Why Did RBC Downgrade MRK Stock?

• Patents covering Keytruda, Merck’s best-selling cancer drug, will begin to expire in 2028.
• RBC said that for MRK stock to gain further, Merck’s pipeline would need to exceed its already elevated expectations.
• BofA believes the melanoma trial results strengthened confidence that Merck can offset Keytruda’s patent expiration challenges.

Despite Wall Street’s largely positive response to promising Phase 3 melanoma data from Merck (MRK) and Moderna (MRNA), one analyst flagged concerns over Merck’s valuation,  describing it as ‘unprecedented.’

RBC Capital analyst Trung Huynh downgraded Merck to ‘Sector Perform’ from ‘Outperform,’ while raising the price target to $150 from $142, according to The Fly. MRK shares are currently trading around the target price.

At the time of writing, MRK stock was down 1.7%.

RBC Flags Keytruda Expiration Concerns

Huynh said that while the cancer vaccine results exceeded expectations, he called the stock’s $150 valuation “unprecedented” for a company facing a major loss of exclusivity in two years and “modest” growth until then.

Key patents covering Keytruda, Merck’s best-selling cancer drug, begin expiring in 2028, potentially opening the door to cheaper competition. The drug generated more than $30 billion in 2025 and accounted for nearly half of Merck’s overall revenue, according to a Reuters report.

RBC said that for the stock to gain further, Merck’s pipeline would need to exceed its already elevated expectations.

BofA Says Merck Can Offset Keytruda Concerns

However, BofA believes the melanoma trial results have strengthened confidence that Merck can offset the potential challenges posed by Keytruda’s patent expiration. The firm sees roughly $3 billion in additional peak pipeline sales. It raised MRK’s price target to $166 from $141, and kept a ‘Buy’ rating.

BMO Capital raised its price target on Merck to $170 from $142 and maintained an ‘Outperform’ rating. The firm said the INTerpath-001 trial creates a significant opportunity in skin cancer and could support expansion into other solid tumors, representing an estimated $5.6 billion in potential peak revenue.

The INTerpath-001 trial tested personalized therapy Intismeran Autogene with Keytruda in patients whose high-risk melanoma had been surgically removed. The combination significantly extended the time patients lived without cancer recurrence or spread to other parts of the body, compared with Keytruda alone.

Merck and Moderna are now studying the approach across nine Phase 2 and Phase 3 trials involving melanoma, lung, bladder and kidney cancers.

MRK Bulls Eye $200

Retail sentiment surrounding MRK on Stocktwits remained ‘bullish’ over the past 24 hours, amid ‘extremely high’ message volumes.

One user believes MRK shares could reach $200 by the end of the year.

 MRK shares have gained more than 40% so far in 2026.

Also read: Ultragenyx’s Gene-Therapy Win Could Unlock A ‘Long Revenue Tailwind,’ Says Wells Fargo — This Analyst Sees 265% Upside For RARE Stock

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