Discussing his fantasy roster on the September 8 episode of Mad Money, Jim Cramer turned his focus to pharmaceutical giant Merck & Co., Inc. (NYSE:MRK) to support his defense and special teams unit, as he remarked:
Beyond the offense, there’s a spot on your roster for something called a defense/special teams pick in fantasy football. And for the most part, what you want from your fantasy football defense, it’s very straightforward. You want them to give up as few points as possible. But defense in fantasy is a bit different because you can also get upside from sacks, turnovers, and special teams touchdowns. So for our stock market equivalent, I think that Merck’s a good fit.
As a drug company, Merck’s inherently defensive in nature. It does fine even in a bad economy, good if the Fed chooses to jack up rates, right? At the same time, it can also give you real upside as we saw when Merck’s partner Moderna put up some promising melanoma vaccine results. There’s a reason Merck’s now up 41% year to date. In terms of the NFL, that reminds me of the LA Rams defense. The only concern is age. The Rams have to do well this year because… it’s a ticking clock for them given that the team has so many older players. Merck too is racing against the clock to build a pipeline of new drugs that could offset some big upcoming patent expirations from their fantastic Keytruda oncology platform.
Strong Revenue Drivers and Core Blockbuster Momentum
The bull case for Merck & Co., Inc. rests on heavy-hitting commercial assets that continue to deliver expanding cash flows. In its second-quarter earnings report, the company posted worldwide sales of $16.6 billion. Its flagship oncology franchise, supported by intravenous Keytruda and the newer subcutaneous formulation Keytruda QLEX, generated $8.4 billion in quarterly revenue. Beyond oncology, high-growth products like the pulmonary arterial hypertension treatment Winrevair surged 75% to reach $588 million. Backed by these strong commercial catalysts, management raised its full-year 2026 sales guidance to a range between $66.3 billion and $67.3 billion.
Racing the Patent Clock and Managing Pipeline Risks
The primary challenge is the looming loss of exclusivity for Keytruda toward the end of 2028, forcing management to aggressively fund and acquire new pipeline assets. The urgency explains why the company is pouring capital into promising partnerships, such as its personalized mRNA cancer vaccine collaboration with Moderna. While high-impact biotech catalysts provide the special teams touchdowns Cramer loves, they also introduce clinical, regulatory, manufacturing, and commercialization risks.
Institutional Backing and Bearish Interest
According to Insider Monkey’s database, 101 hedge funds held a stake in the company during Q2, compared to 98 in the prior quarter. Meanwhile, the short interest sits at just 0.99% of the float. As per Insider Monkey’s hedge fund data, Fisher Asset Management maintained the top position in the company with 38.5 million shares. It is worth noting that the firm increased its holdings in the company by 46%.
The scarcity of short interest shows that skeptical market participants see little reason to bet against a company backed by dependable cash generation and consistent dividend distributions. As institutional capital actively cycles toward stability during the changing economic conditions, Merck & Co., Inc.’s combination of steady pharmaceutical revenue and long-term clinical upside makes it a reliable stock for any balanced equity portfolio.
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