Goldman Sachs’ Top Growth Investors: 34 Stocks With The Highest Investment For Growth

14. Merck & Co., Inc. (NYSE:MRK)

Growth Investment Ratio: 114%

Number of Hedge Fund Holders: 96

Merck & Co., Inc. (NYSE:MRK) is a well-known global pharmaceutical company. It primarily targets the specialty drugs market and is one of the world leaders in cancer drugs. Merck & Co., Inc. (NYSE:MRK) is also one of the biggest companies of its kind, as evident through its $7 billion in cash and $10 billion in receivables. The firm’s largest product right now, and one that is central to its hypothesis, is its cancer drug KEYTRUDA. The cancer drug brought Merck & Co., Inc. (NYSE:MRK) a whopping $7.2 billion in sales in Q2, and it is expected to generate an equally remarkable $33 billion in sales in 2027 according to FactSet. Yet, the drug’s spectacular success can also prove to be Merck & Co., Inc. (NYSE:MRK)’s Achilles’ heel. This is because KEYTRUDA’s patent will expire in 2028 and open the way for low-cost biosimilars. To prevent a sizable hit to its sales, the pharma company will have to invest in new drugs and launch other products. On these fronts, it is focusing on the HPV vaccine GARDASIL and has acquired a cancer antibody for $750 million to develop new treatments.

Baron Funds mentioned Merck & Co., Inc. (NYSE:MRK) in its Q1 2024 investor letter. Here is what the fund said:

“Global pharmaceutical company Merck & Co., Inc. contributed on the continued growth of Keytruda, the company’s key asset and the leading immuno-oncology agent used to treat a variety of cancers. The FDA’s late March approval of pulmonary arterial hypertension drug sotatercept, also drove share gains. We retain conviction as Merck has started to transition from prioritizing its Keytruda franchise to building a more diversified business, with a focus on the Gardasil vaccine, pneumococcal vaccine development, and cardiovascular drug development, well in advance of the scheduled expiration of patent protection/exclusivity rights.”