China’s First-in-Class TGCT Drug Approval Might Change The Case For Investing In Merck (XTRA:MRK)

• Merck KGaA, Darmstadt, Germany recently reported that China’s NMPA has granted Priority Review approval for pimicotinib, a CSF-1R inhibitor, to treat adult patients with symptomatic tenosynovial giant cell tumor where surgery risks functional limitation or relatively severe morbidity.
• This first Chemical Drug Class 1 approval in China for TGCT, backed by strong Phase 3 MANEUVER data, adds a differentiated rare-disease therapy to Merck KGaA’s healthcare portfolio in a major market.
• We’ll now examine how pimicotinib’s first-in-class approval in China could influence Merck KGaA’s healthcare growth narrative and portfolio mix.

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Merck KGaA Investment Narrative Recap

To own Merck KGaA, you need to believe in its diversified model and the gradual shift toward higher-margin healthcare and life science assets, while Electronics and FX remain pressure points. The China approval of pimicotinib reinforces the healthcare growth story but does not materially change the near term focus on Electronics weakness and upcoming loss of exclusivity risks in the portfolio.

The earlier update that management reaffirmed its 2025 guidance, including a net sales midpoint of €21.1 billion and slightly higher EPS pre guidance, now sits alongside pimicotinib’s approval as part of a broader effort to tilt the mix toward differentiated therapies. Together, they frame healthcare as an increasingly important counterweight to softer trends in Electronics and more cyclical parts of the group.

But investors should also be aware that overreliance on a handful of high-margin drugs leaves Merck exposed if...

Read the full narrative on Merck KGaA (it's free!)

Merck KGaA's narrative projects €23.2 billion revenue and €3.5 billion earnings by 2028. This requires 3.1% yearly revenue growth and about a €0.6 billion earnings increase from €2.9 billion today.

Uncover how Merck KGaA's forecasts yield a €143.88 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community range from €99.85 to €294.89 per share, showing how far apart individual views can be. You can set those against the current focus on healthcare growth catalysts like pimicotinib, which could gradually reshape Merck KGaA’s earnings mix and risk profile over time.

Explore 5 other fair value estimates on Merck KGaA - why the stock might be worth 19% less than the current price!

Build Your Own Merck KGaA Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Merck KGaA research is our analysis highlighting 5 key rewards that could impact your investment decision.
• Our free Merck KGaA research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Merck KGaA's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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