We recently published a list of the 10 Best Cancer Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Merck & Co., Inc. (NYSE:MRK) stands against other best cancer stocks to buy.
Overview of the Global Oncology Sector
Cancer is the second leading cause of death across the globe, second to cardiovascular disease. According to data by the American Cancer Society released in January 2023, the United States was expected to have around 1,958,310 cancer patients by the end of 2023 alone. This reflects a 28% increase from 2010. More than 2 million new cases of cancer were likely to be diagnosed in the US in 2024, with more than 600,000 deaths from the ailment expected in the same year. Like the increasing number of cancer patients, the cost of treating cancer is on an upward trajectory as well. While it cost around $200 billion to treat cancer in the US in 2020, the total expense is anticipated to exceed $245 billion by 2030.
According to the “Oncology Pharmaceuticals Market 2024” report, global funding for cancer research has grown exponentially over the past two decades. The FDA approved 161 new cancer therapies between 2017 and 2022, which reflects the fast pace with which treatment in the field is advancing. These statistics make oncology one of the most comprehensive sectors of the life science space. The oncology sector covers the entire cancer care process, from diagnosis to treatment.
Pharmaceutical and biotech companies around the world are continuously striving to develop more effective cancer treatments. According to Fortune Business Insights, this endeavor is expected to continue increasing in magnitude in the coming future. The global oncology drugs market was valued at around $201.75 billion in 2023. It is anticipated to grow at a compound annual growth rate (CAGR) of 11.3%, going from $220.80 billion in 2024 to $518.25 billion by 2032.
Some of the primary factors driving the growth of the oncology drugs market include the advancements in targeted immunotherapies for cancer care and the increasing prevalence of cancer across the globe. This growth rate makes investment in oncology-related companies a lucrative bet. North America is the most dominant geographical region in the global oncology drugs market. It held a 45.92% market share in 2023.
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Trends in Precision Oncology
The precision oncology market reflects similar trends. The National Institutes of Health (NIH) defines precision oncology as a form of treatment where medical professionals choose treatments by keeping the DNA signature of an individual patient’s tumor in view. Statistics from Grand View Research show that the global precision oncology market size was valued at $115.8 billion in 2024.
It is anticipated to grow at a CAGR of 8.05% between 2025 and 2030. This growth is attributed to the increasing demand for diagnostics products, technological advances, avoiding particular drug resistance, and the increasing minimizing of the side effects of therapies in cancer patients.
AI and Cancer: What’s the Connection?
The adoption of AI in the oncology sector is increasing dramatically. According to a report by Mordor Intelligence, the AI in oncology market size is expected to be around $1.98 billion in 2025, and is anticipated to reach around $9.04 billion by 2030. This reflects growth at a CAGR of 35.51% between 2025 and 2030.
The increasing adoption of AI to diagnose, analyze, and treat complex datasets related to oncology is helping reduce the burden on physicians and hospital infrastructure, streamlining the process. While the largest market for AI in oncology is North America, the fastest-growing sector market is the Asia-Pacific region.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 30 cancer stocks. We then selected the top 10 stocks most popular among elite hedge funds. We sourced hedge fund data from Insider Monkey’s database. The stocks are sorted in ascending order of the number of hedge fund holders that have stakes in them as of Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a person’s hand holding a bottle of pharmaceuticals.
Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 86
Merck & Co., Inc. (NYSE:MRK) is a biopharmaceutical company that delivers health solutions that prevent and treat diseases in humans and animals. Its Pharmaceutical segment provides human vaccines and pharmaceutical products consisting of therapeutic and preventive agents. The company boasts over a decade of progress in cancer care and has three primary areas of focus in oncology research: immuno-oncology, tissue targeting, and precision molecular targeting.
Merck & Co., Inc.’s (NYSE:MRK) cancer immunotherapy drug Keytruda has been its most significant revenue driver over the past few years. It is on the path to reaching $30 billion in sales by 2026 and is seeing growth due to its use for additional cancer types and improved patient demand.
The drug is presently approved for different oncology indications in the US, and the company is in the process of seeking approval for most of the indications in other major international markets as well, such as Japan and the EU. Merck & Co., Inc. (NYSE:MRK) takes the fourth spot on our list of the 10 best cancer stocks to buy according to hedge funds.
GreensKeeper Asset Management, an investment management company, released its third-quarter investor letter. Here is what the fund said:
“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”
Overall, MRK ranks 4th on our list of the best cancer stocks to buy according to hedge funds. While we acknowledge the potential of MRK, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MRK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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