Why Animal Health Earns 33.5%Narrow moat

Merck & Co. (MRK) — moat facet

Animal Health's 33.5% margin looks poor beside Pharma's 78.7% only because it pays for its own research and Pharma does not.

Animal Health looks far less profitable than Pharma, and most of the gap is accounting. Animal Health segment profit was $2,131 million on sales of $6,354 million in 2025, about 33.5%12, against about 78.7% for Pharma3.

Animal Health segment margin (%)35.0%202135.4%202230.9%202333.0%202433.5%2025Calculated from Merck Forms 10-K segment profit and sales
Steady in the low to mid thirties.

The definitions differ. Pharma's segment profit deducts standard costs and the selling expenses directly incurred, while Animal Health's deducts all cost of sales and its own research and development4. Merck's human-health research, amortisation and restructuring are left unallocated5. In 2025 Animal Health bore $2,649 million of cost of sales, $1,125 million of selling costs and $448 million of research6.

Measured the same way, the two businesses would be closer. Unallocated research was $14,987 million in 20257, about a quarter of Pharma's sales8; Animal Health spends about 7% of its sales on research9.

The margin has been stable. It was about 35.0% in 2021 and 30.9% in 202310, and in the second quarter of 2026 segment profit was $636 million on $1,775 million of sales, about 35.8%1112.

The Pharmaceutical margin, by contrast, has risen as Keytruda grew. Pharmaceutical segment profit was $30,977 million on $42,754 million of sales in 2021 and $45,754 million on $58,142 million in 20251314, from about 72.5% to about 78.7%15. Animal Health's margin moved in a narrow band over the same years.

Animal Health earns a solid, steady return and is not the weak cousin its margin suggests. Its segment margin is the figure to hold it to; a fall below 30% would mean acquisitions or pricing are costing more than the segment's growth is worth.

Moat trajectory: Holding steady

Segment margin between about 31% and 36% since 2021.

The number that tests this moat
Moat Explorer calc
Animal Health segment profit margin, latest quarter
About 35.8% (Q2 2026: $636M on $1,775M)

The segment's steady return; a fall below 30% would mean acquisitions or pricing cost more than growth.

How it's calculated: Animal Health segment profit divided by Animal Health sales, Q2 2026 10-Q and release.
Source: Moat Explorer calculation from Merck filings ↗
⚠ Threats to the moat
⚠ THREAT 01
Lower Margins on the Newer Products
Merck is adding tags, monitors and poultry biodevices to Animal Health, and nobody outside the company knows what they earn.
References
  1. ReportedAnimal Health segment profit was $2,131 million on sales of $6,354 million in 2025, about 33.5%, against about 78.7% for Pharma.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  2. Moat Explorer calcAnimal Health segment profit was $2,131 million on sales of $6,354 million in 2025, about 33.5%, against about 78.7% for Pharma.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ millions unless stated). Lines 2025: Keytruda 31,641 + Keytruda Qlex 40 = 31,681; other pharmaceutical 58,142 - 31,681 - 5,233 = 21,228; Animal Health 6,354; other revenue 515; total 31,681 + 5,233 + 21,228 + 6,354 + 515 = 65,011. 2024: 29,482; 57,400 - 29,482 - 8,583 = 19,335. 2023: 53,583 - 25,011 - 8,886 = 19,686. 2022: 52,005 - 20,937 - 6,897 = 24,171. 2021: 42,754 - 17,186 - 5,673 = 19,895. Everything else 2025: 65,011 - 31,681 = 33,330. Keytruda share of sales: 11,084 / 39,121 = 28.3% (2019, continuing basis); 17,186 / 48,704 = 35.3% (2021); 25,011 / 60,115 = 41.6% (2023); 31,681 / 65,011 = 48.7% (2025); Q2 2026 8,366 / 16,607 = 50.4%. Keytruda and Gardasil Q2 2026 (8,366 + 1,169) / 16,607 = 9,535 / 16,607 = 57.4%. Qlex 463 / 8,366 = 5.5%. Keytruda growth: 31,641 / 29,482 - 1 = 7.3% (2025); 29,482 / 25,011 - 1 = 17.9% (2024); 31,641 / 17,186 = 1.84, compound (1.84)^(1/4) - 1 = 16.5% a year; 31,641 / 11,084 = 2.85 (2019-2025). US share of Keytruda 18,829 / 31,641 = 59.5%. International Keytruda 12,812 / 11,610 - 1 = 10.4%; US Keytruda 18,829 / 17,872 - 1 = 5.4%. US Keytruda share of total sales 18,829 / 65,011 = 29.0%. Royalty: 2.5% x 31,681 = 792; 6.5% x 31,681 = 2,059. Gardasil US royalty 7% x 2,641 = 185. Winrevair royalty 22% x 1,443 = 317; 22% x 419 = 92; Winrevair Q2 2026 588 x 4 = 2,352, 22% x 2,352 = 517. Segment margins: Pharmaceutical 45,754 / 58,142 = 78.7% (2025); Q2 2026 11,612 / 14,760 = 78.7% (recast basis). Animal Health 2,131 / 6,354 = 33.5% (2025); 1,938 / 5,877 = 33.0% (2024); 1,737 / 5,625 = 30.9% (2023); 1,963 / 5,550 = 35.4% (2022); 1,950 / 5,568 = 35.0% (2021); Q2 2026 636 / 1,775 = 35.8%. Unallocated research 14,987 / 58,142 = 25.8%; Animal Health research 448 / 6,354 = 7.1%. Animal Health segment profit 2,131 / 45,754 = 4.7% of Pharmaceutical. Gardasil: international 2,592 / 6,158 - 1 = -57.9%; US 2,641 / 2,083 - 1 = 26.8%; share 5,233 / 65,011 = 8.0%; share of sales 2021 5,673 / 48,704 = 11.6%, 2022 6,897 / 59,283 = 11.6%, 2023 8,886 / 60,115 = 14.8%, 2024 8,583 / 64,168 = 13.4%; Q2 2026 1,169 x 4 = 4,676. Vaccines H1 2026 2,314 + 2,361 = 4,675; H1 2025 2,607 + 2,370 = 4,977; 4,675 / 4,977 - 1 = -6.1%. Childhood vaccines growth 2,368 / 2,241 - 1 = 5.7%; 2,485 / 2,368 - 1 = 4.9%; 2,451 / 2,485 - 1 = -1.4%. Pneumococcal: Pneumovax 166 / 893 - 1 = -81%; 825 + 759 + 166 = 1,750; 1,750 / 893 = 2.0; (825 + 759) / 166 = 9.5; Capvaxive + Vaxneuvance 759 + 825 = 1,584; 1,584 / 6,494 = 24.4% of Prevnar. Animal Health: livestock 3,896 / 6,354 = 61.3%; livestock growth 3,300 / 3,295 - 1 = 0.2%, 3,337 / 3,300 - 1 = 1.1%, 3,462 / 3,337 - 1 = 3.7%, 3,896 / 3,462 - 1 = 12.5%; companion 2,458 / 2,415 - 1 = 1.8%, 2,458 / 2,273 - 1 = 8.1%; companion excluding Bravecto 2,458 - 1,100 = 1,358; rest of Animal Health 6,354 - 1,100 = 5,254; Bravecto 359 / 335 - 1 = 7%. Segment 6,354 / 5,877 - 1 = 8.1%; 5,625 / 5,568 - 1 = 1.0%; Q2 2026 1,775 / 1,646 - 1 = 7.8%; compound (6,354 / 5,568)^(1/4) - 1 = 3.4% a year; share 6,354 / 65,011 = 9.8%; 6,354 / 31,681 = 0.20 of Keytruda; 6,354 / 9,467 = 67% of Zoetis; Zoetis 9,467 / 9,256 - 1 = 2.3%. Competitors: Keytruda 31,641 / Opdivo 10,049 = 3.1. Geography: US 36,510 / 65,011 = 56.2%; China 1,939 / 6,802 - 1 = -71%; China share 4,378 / 48,704 = 9.0% (2021), 6,802 / 60,115 = 11.3% (2023), 5,494 / 64,168 = 8.6% (2024), 1,939 / 65,011 = 3.0% (2025); other regions 65,011 - 36,510 - 14,580 - 2,711 - 1,939 = 9,271. Wholesaler receivables 22% + 21% + 13% = 56% (2025); 21 + 21 + 13 = 55 (2024); 21 + 20 + 14 = 55 (2023). Januvia and Janumet: 3,324 + 1,964 = 5,288 (2021); 2,189 + 1,177 = 3,366 (2023); 1,334 + 935 = 2,269 (2024); 1,604 + 940 = 2,544 (2025). Newer products Q2 2026: 588 + 271 + 204 + 184 = 1,247; 1,247 / 8,366 = 14.9%. Bridion 1,841 / 4 = 460 a quarter. Other pharmaceutical Q2 2026 14,760 - 8,366 - 1,169 = 5,225; Q2 2025 14,050 - 7,956 - 1,126 = 4,968; 5,225 / 4,968 - 1 = 5.2%; 2025 share 21,228 / 65,011 = 32.7%. Research: 30,531 / 60,115 = 50.8% of sales (2023). Charges 2026 9.0 + 5.7 = 14.7 bn; per share 3.62 + 2.31 = 5.93. Ohtuvayre 204 x 4 = 816; 12,100 / 816 = 14.8. Tax guidance midpoints (23.5 + 24.5) / 2 = 24.0; (35.0 + 36.0) / 2 = 35.5. Balance sheet: net debt end-2025 2,589 + 46,750 - 14,565 = 34,774; end-2024 2,649 + 34,462 - 13,242 - 447 = 23,422; end-2023 1,372 + 33,683 - 6,841 - 252 = 27,962; 30 June 2026 2,825 + 51,081 - 6,849 - 292 = 46,765, cash and short-term investments 6,849 + 292 = 7,141; net debt to equity 34,774 / 52,606 = 0.66; 46,765 / 41,933 = 1.1. Net income 2023-2025 365 + 17,117 + 18,254 = 35,736. Valuation: year-end 2025 market value 261.26 bn / net income 18.254 bn = 14.3; free cash flow 2025 16,472 - 4,112 = 12,360; 12,360 / 365,090 = 3.4%. Trailing twelve months to June 2026: sales 65,011 - 31,335 + 32,893 = 66,569; net income 18,254 - 9,506 - 5,575 = 3,173. EPS guidance midpoints (5.00 + 5.15) / 2 = 5.075; (5.04 + 5.16) / 2 = 5.10; (2.66 + 2.76) / 2 = 2.71. Protection from 2026: 2043 - 2026 = 17 years; 2028 - 2026 = 2 years. Year-end P/E = market value / net income: 147.55 / 4.442 = 33.2 (2015); 162.31 / 3.920 = 41.4 (2016); 153.30 / 2.394 = 64.0 (2017); 198.69 / 6.220 = 31.9 (2018); 231.56 / 9.843 = 23.5 (2019); 206.96 / 7.067 = 29.3 (2020); 193.59 / 13.049 = 14.8 (2021); 281.30 / 14.519 = 19.4 (2022); 276.26 / 0.365 = 757 (2023); 251.65 / 17.117 = 14.7 (2024); 261.26 / 18.254 = 14.3 (2025); 365.09 / 3.173 = 115.1 (TTM). Return on average equity 2025: 18,254 / ((52,606 + 46,313) / 2) = 18,254 / 49,460 = 36.9%. Gross profit 2025 65,011 - 16,382 = 48,629; 48,629 / 65,011 = 74.8%; royalty 792 / 16,382 = 4.8% of cost of sales. Keytruda increase 2021-2025 31,681 - 17,186 = 14,495; sales increase 65,011 - 48,704 = 16,307. US sales 36,510 / 28,480 - 1 = 28%. Pharmaceutical margin 2021 30,977 / 42,754 = 72.5%. Livestock less companion 3,295 - 2,273 = 1,022 (2021); 3,896 - 2,458 = 1,438 (2025). Prevnar 6,494 / Vaxneuvance 825 = 7.9. Animal Health 2025 6,354 against Keytruda franchise Q2 2026 8,366 - product and segment totals, growth and royalties. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Merck's Forms 10-K and 10-Q, results releases, the Bristol Myers Squibb, Pfizer and Zoetis 10-Ks and market data; operands shown in the source line.
  3. Moat Explorer calcAnimal Health segment profit was $2,131 million on sales of $6,354 million in 2025, about 33.5%, against about 78.7% for Pharma.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ millions unless stated). Lines 2025: Keytruda 31,641 + Keytruda Qlex 40 = 31,681; other pharmaceutical 58,142 - 31,681 - 5,233 = 21,228; Animal Health 6,354; other revenue 515; total 31,681 + 5,233 + 21,228 + 6,354 + 515 = 65,011. 2024: 29,482; 57,400 - 29,482 - 8,583 = 19,335. 2023: 53,583 - 25,011 - 8,886 = 19,686. 2022: 52,005 - 20,937 - 6,897 = 24,171. 2021: 42,754 - 17,186 - 5,673 = 19,895. Everything else 2025: 65,011 - 31,681 = 33,330. Keytruda share of sales: 11,084 / 39,121 = 28.3% (2019, continuing basis); 17,186 / 48,704 = 35.3% (2021); 25,011 / 60,115 = 41.6% (2023); 31,681 / 65,011 = 48.7% (2025); Q2 2026 8,366 / 16,607 = 50.4%. Keytruda and Gardasil Q2 2026 (8,366 + 1,169) / 16,607 = 9,535 / 16,607 = 57.4%. Qlex 463 / 8,366 = 5.5%. Keytruda growth: 31,641 / 29,482 - 1 = 7.3% (2025); 29,482 / 25,011 - 1 = 17.9% (2024); 31,641 / 17,186 = 1.84, compound (1.84)^(1/4) - 1 = 16.5% a year; 31,641 / 11,084 = 2.85 (2019-2025). US share of Keytruda 18,829 / 31,641 = 59.5%. International Keytruda 12,812 / 11,610 - 1 = 10.4%; US Keytruda 18,829 / 17,872 - 1 = 5.4%. US Keytruda share of total sales 18,829 / 65,011 = 29.0%. Royalty: 2.5% x 31,681 = 792; 6.5% x 31,681 = 2,059. Gardasil US royalty 7% x 2,641 = 185. Winrevair royalty 22% x 1,443 = 317; 22% x 419 = 92; Winrevair Q2 2026 588 x 4 = 2,352, 22% x 2,352 = 517. Segment margins: Pharmaceutical 45,754 / 58,142 = 78.7% (2025); Q2 2026 11,612 / 14,760 = 78.7% (recast basis). Animal Health 2,131 / 6,354 = 33.5% (2025); 1,938 / 5,877 = 33.0% (2024); 1,737 / 5,625 = 30.9% (2023); 1,963 / 5,550 = 35.4% (2022); 1,950 / 5,568 = 35.0% (2021); Q2 2026 636 / 1,775 = 35.8%. Unallocated research 14,987 / 58,142 = 25.8%; Animal Health research 448 / 6,354 = 7.1%. Animal Health segment profit 2,131 / 45,754 = 4.7% of Pharmaceutical. Gardasil: international 2,592 / 6,158 - 1 = -57.9%; US 2,641 / 2,083 - 1 = 26.8%; share 5,233 / 65,011 = 8.0%; share of sales 2021 5,673 / 48,704 = 11.6%, 2022 6,897 / 59,283 = 11.6%, 2023 8,886 / 60,115 = 14.8%, 2024 8,583 / 64,168 = 13.4%; Q2 2026 1,169 x 4 = 4,676. Vaccines H1 2026 2,314 + 2,361 = 4,675; H1 2025 2,607 + 2,370 = 4,977; 4,675 / 4,977 - 1 = -6.1%. Childhood vaccines growth 2,368 / 2,241 - 1 = 5.7%; 2,485 / 2,368 - 1 = 4.9%; 2,451 / 2,485 - 1 = -1.4%. Pneumococcal: Pneumovax 166 / 893 - 1 = -81%; 825 + 759 + 166 = 1,750; 1,750 / 893 = 2.0; (825 + 759) / 166 = 9.5; Capvaxive + Vaxneuvance 759 + 825 = 1,584; 1,584 / 6,494 = 24.4% of Prevnar. Animal Health: livestock 3,896 / 6,354 = 61.3%; livestock growth 3,300 / 3,295 - 1 = 0.2%, 3,337 / 3,300 - 1 = 1.1%, 3,462 / 3,337 - 1 = 3.7%, 3,896 / 3,462 - 1 = 12.5%; companion 2,458 / 2,415 - 1 = 1.8%, 2,458 / 2,273 - 1 = 8.1%; companion excluding Bravecto 2,458 - 1,100 = 1,358; rest of Animal Health 6,354 - 1,100 = 5,254; Bravecto 359 / 335 - 1 = 7%. Segment 6,354 / 5,877 - 1 = 8.1%; 5,625 / 5,568 - 1 = 1.0%; Q2 2026 1,775 / 1,646 - 1 = 7.8%; compound (6,354 / 5,568)^(1/4) - 1 = 3.4% a year; share 6,354 / 65,011 = 9.8%; 6,354 / 31,681 = 0.20 of Keytruda; 6,354 / 9,467 = 67% of Zoetis; Zoetis 9,467 / 9,256 - 1 = 2.3%. Competitors: Keytruda 31,641 / Opdivo 10,049 = 3.1. Geography: US 36,510 / 65,011 = 56.2%; China 1,939 / 6,802 - 1 = -71%; China share 4,378 / 48,704 = 9.0% (2021), 6,802 / 60,115 = 11.3% (2023), 5,494 / 64,168 = 8.6% (2024), 1,939 / 65,011 = 3.0% (2025); other regions 65,011 - 36,510 - 14,580 - 2,711 - 1,939 = 9,271. Wholesaler receivables 22% + 21% + 13% = 56% (2025); 21 + 21 + 13 = 55 (2024); 21 + 20 + 14 = 55 (2023). Januvia and Janumet: 3,324 + 1,964 = 5,288 (2021); 2,189 + 1,177 = 3,366 (2023); 1,334 + 935 = 2,269 (2024); 1,604 + 940 = 2,544 (2025). Newer products Q2 2026: 588 + 271 + 204 + 184 = 1,247; 1,247 / 8,366 = 14.9%. Bridion 1,841 / 4 = 460 a quarter. Other pharmaceutical Q2 2026 14,760 - 8,366 - 1,169 = 5,225; Q2 2025 14,050 - 7,956 - 1,126 = 4,968; 5,225 / 4,968 - 1 = 5.2%; 2025 share 21,228 / 65,011 = 32.7%. Research: 30,531 / 60,115 = 50.8% of sales (2023). Charges 2026 9.0 + 5.7 = 14.7 bn; per share 3.62 + 2.31 = 5.93. Ohtuvayre 204 x 4 = 816; 12,100 / 816 = 14.8. Tax guidance midpoints (23.5 + 24.5) / 2 = 24.0; (35.0 + 36.0) / 2 = 35.5. Balance sheet: net debt end-2025 2,589 + 46,750 - 14,565 = 34,774; end-2024 2,649 + 34,462 - 13,242 - 447 = 23,422; end-2023 1,372 + 33,683 - 6,841 - 252 = 27,962; 30 June 2026 2,825 + 51,081 - 6,849 - 292 = 46,765, cash and short-term investments 6,849 + 292 = 7,141; net debt to equity 34,774 / 52,606 = 0.66; 46,765 / 41,933 = 1.1. Net income 2023-2025 365 + 17,117 + 18,254 = 35,736. Valuation: year-end 2025 market value 261.26 bn / net income 18.254 bn = 14.3; free cash flow 2025 16,472 - 4,112 = 12,360; 12,360 / 365,090 = 3.4%. Trailing twelve months to June 2026: sales 65,011 - 31,335 + 32,893 = 66,569; net income 18,254 - 9,506 - 5,575 = 3,173. EPS guidance midpoints (5.00 + 5.15) / 2 = 5.075; (5.04 + 5.16) / 2 = 5.10; (2.66 + 2.76) / 2 = 2.71. Protection from 2026: 2043 - 2026 = 17 years; 2028 - 2026 = 2 years. Year-end P/E = market value / net income: 147.55 / 4.442 = 33.2 (2015); 162.31 / 3.920 = 41.4 (2016); 153.30 / 2.394 = 64.0 (2017); 198.69 / 6.220 = 31.9 (2018); 231.56 / 9.843 = 23.5 (2019); 206.96 / 7.067 = 29.3 (2020); 193.59 / 13.049 = 14.8 (2021); 281.30 / 14.519 = 19.4 (2022); 276.26 / 0.365 = 757 (2023); 251.65 / 17.117 = 14.7 (2024); 261.26 / 18.254 = 14.3 (2025); 365.09 / 3.173 = 115.1 (TTM). Return on average equity 2025: 18,254 / ((52,606 + 46,313) / 2) = 18,254 / 49,460 = 36.9%. Gross profit 2025 65,011 - 16,382 = 48,629; 48,629 / 65,011 = 74.8%; royalty 792 / 16,382 = 4.8% of cost of sales. Keytruda increase 2021-2025 31,681 - 17,186 = 14,495; sales increase 65,011 - 48,704 = 16,307. US sales 36,510 / 28,480 - 1 = 28%. Pharmaceutical margin 2021 30,977 / 42,754 = 72.5%. Livestock less companion 3,295 - 2,273 = 1,022 (2021); 3,896 - 2,458 = 1,438 (2025). Prevnar 6,494 / Vaxneuvance 825 = 7.9. Animal Health 2025 6,354 against Keytruda franchise Q2 2026 8,366 - product and segment totals, growth and royalties. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Merck's Forms 10-K and 10-Q, results releases, the Bristol Myers Squibb, Pfizer and Zoetis 10-Ks and market data; operands shown in the source line.
  4. ReportedPharma's segment profit deducts standard costs and the selling expenses directly incurred, while Animal Health's deducts all cost of sales and its own research and development.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  5. ReportedMerck's human-health research, amortisation and restructuring are left unallocated.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  6. ReportedIn 2025 Animal Health bore $2,649 million of cost of sales, $1,125 million of selling costs and $448 million of research.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  7. ReportedUnallocated research was $14,987 million in 2025, about a quarter of Pharma's sales; Animal Health spends about 7% of its sales on research.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  8. Moat Explorer calcUnallocated research was $14,987 million in 2025, about a quarter of Pharma's sales; Animal Health spends about 7% of its sales on research.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ millions unless stated). Lines 2025: Keytruda 31,641 + Keytruda Qlex 40 = 31,681; other pharmaceutical 58,142 - 31,681 - 5,233 = 21,228; Animal Health 6,354; other revenue 515; total 31,681 + 5,233 + 21,228 + 6,354 + 515 = 65,011. 2024: 29,482; 57,400 - 29,482 - 8,583 = 19,335. 2023: 53,583 - 25,011 - 8,886 = 19,686. 2022: 52,005 - 20,937 - 6,897 = 24,171. 2021: 42,754 - 17,186 - 5,673 = 19,895. Everything else 2025: 65,011 - 31,681 = 33,330. Keytruda share of sales: 11,084 / 39,121 = 28.3% (2019, continuing basis); 17,186 / 48,704 = 35.3% (2021); 25,011 / 60,115 = 41.6% (2023); 31,681 / 65,011 = 48.7% (2025); Q2 2026 8,366 / 16,607 = 50.4%. Keytruda and Gardasil Q2 2026 (8,366 + 1,169) / 16,607 = 9,535 / 16,607 = 57.4%. Qlex 463 / 8,366 = 5.5%. Keytruda growth: 31,641 / 29,482 - 1 = 7.3% (2025); 29,482 / 25,011 - 1 = 17.9% (2024); 31,641 / 17,186 = 1.84, compound (1.84)^(1/4) - 1 = 16.5% a year; 31,641 / 11,084 = 2.85 (2019-2025). US share of Keytruda 18,829 / 31,641 = 59.5%. International Keytruda 12,812 / 11,610 - 1 = 10.4%; US Keytruda 18,829 / 17,872 - 1 = 5.4%. US Keytruda share of total sales 18,829 / 65,011 = 29.0%. Royalty: 2.5% x 31,681 = 792; 6.5% x 31,681 = 2,059. Gardasil US royalty 7% x 2,641 = 185. Winrevair royalty 22% x 1,443 = 317; 22% x 419 = 92; Winrevair Q2 2026 588 x 4 = 2,352, 22% x 2,352 = 517. Segment margins: Pharmaceutical 45,754 / 58,142 = 78.7% (2025); Q2 2026 11,612 / 14,760 = 78.7% (recast basis). Animal Health 2,131 / 6,354 = 33.5% (2025); 1,938 / 5,877 = 33.0% (2024); 1,737 / 5,625 = 30.9% (2023); 1,963 / 5,550 = 35.4% (2022); 1,950 / 5,568 = 35.0% (2021); Q2 2026 636 / 1,775 = 35.8%. Unallocated research 14,987 / 58,142 = 25.8%; Animal Health research 448 / 6,354 = 7.1%. Animal Health segment profit 2,131 / 45,754 = 4.7% of Pharmaceutical. Gardasil: international 2,592 / 6,158 - 1 = -57.9%; US 2,641 / 2,083 - 1 = 26.8%; share 5,233 / 65,011 = 8.0%; share of sales 2021 5,673 / 48,704 = 11.6%, 2022 6,897 / 59,283 = 11.6%, 2023 8,886 / 60,115 = 14.8%, 2024 8,583 / 64,168 = 13.4%; Q2 2026 1,169 x 4 = 4,676. Vaccines H1 2026 2,314 + 2,361 = 4,675; H1 2025 2,607 + 2,370 = 4,977; 4,675 / 4,977 - 1 = -6.1%. Childhood vaccines growth 2,368 / 2,241 - 1 = 5.7%; 2,485 / 2,368 - 1 = 4.9%; 2,451 / 2,485 - 1 = -1.4%. Pneumococcal: Pneumovax 166 / 893 - 1 = -81%; 825 + 759 + 166 = 1,750; 1,750 / 893 = 2.0; (825 + 759) / 166 = 9.5; Capvaxive + Vaxneuvance 759 + 825 = 1,584; 1,584 / 6,494 = 24.4% of Prevnar. Animal Health: livestock 3,896 / 6,354 = 61.3%; livestock growth 3,300 / 3,295 - 1 = 0.2%, 3,337 / 3,300 - 1 = 1.1%, 3,462 / 3,337 - 1 = 3.7%, 3,896 / 3,462 - 1 = 12.5%; companion 2,458 / 2,415 - 1 = 1.8%, 2,458 / 2,273 - 1 = 8.1%; companion excluding Bravecto 2,458 - 1,100 = 1,358; rest of Animal Health 6,354 - 1,100 = 5,254; Bravecto 359 / 335 - 1 = 7%. Segment 6,354 / 5,877 - 1 = 8.1%; 5,625 / 5,568 - 1 = 1.0%; Q2 2026 1,775 / 1,646 - 1 = 7.8%; compound (6,354 / 5,568)^(1/4) - 1 = 3.4% a year; share 6,354 / 65,011 = 9.8%; 6,354 / 31,681 = 0.20 of Keytruda; 6,354 / 9,467 = 67% of Zoetis; Zoetis 9,467 / 9,256 - 1 = 2.3%. Competitors: Keytruda 31,641 / Opdivo 10,049 = 3.1. Geography: US 36,510 / 65,011 = 56.2%; China 1,939 / 6,802 - 1 = -71%; China share 4,378 / 48,704 = 9.0% (2021), 6,802 / 60,115 = 11.3% (2023), 5,494 / 64,168 = 8.6% (2024), 1,939 / 65,011 = 3.0% (2025); other regions 65,011 - 36,510 - 14,580 - 2,711 - 1,939 = 9,271. Wholesaler receivables 22% + 21% + 13% = 56% (2025); 21 + 21 + 13 = 55 (2024); 21 + 20 + 14 = 55 (2023). Januvia and Janumet: 3,324 + 1,964 = 5,288 (2021); 2,189 + 1,177 = 3,366 (2023); 1,334 + 935 = 2,269 (2024); 1,604 + 940 = 2,544 (2025). Newer products Q2 2026: 588 + 271 + 204 + 184 = 1,247; 1,247 / 8,366 = 14.9%. Bridion 1,841 / 4 = 460 a quarter. Other pharmaceutical Q2 2026 14,760 - 8,366 - 1,169 = 5,225; Q2 2025 14,050 - 7,956 - 1,126 = 4,968; 5,225 / 4,968 - 1 = 5.2%; 2025 share 21,228 / 65,011 = 32.7%. Research: 30,531 / 60,115 = 50.8% of sales (2023). Charges 2026 9.0 + 5.7 = 14.7 bn; per share 3.62 + 2.31 = 5.93. Ohtuvayre 204 x 4 = 816; 12,100 / 816 = 14.8. Tax guidance midpoints (23.5 + 24.5) / 2 = 24.0; (35.0 + 36.0) / 2 = 35.5. Balance sheet: net debt end-2025 2,589 + 46,750 - 14,565 = 34,774; end-2024 2,649 + 34,462 - 13,242 - 447 = 23,422; end-2023 1,372 + 33,683 - 6,841 - 252 = 27,962; 30 June 2026 2,825 + 51,081 - 6,849 - 292 = 46,765, cash and short-term investments 6,849 + 292 = 7,141; net debt to equity 34,774 / 52,606 = 0.66; 46,765 / 41,933 = 1.1. Net income 2023-2025 365 + 17,117 + 18,254 = 35,736. Valuation: year-end 2025 market value 261.26 bn / net income 18.254 bn = 14.3; free cash flow 2025 16,472 - 4,112 = 12,360; 12,360 / 365,090 = 3.4%. Trailing twelve months to June 2026: sales 65,011 - 31,335 + 32,893 = 66,569; net income 18,254 - 9,506 - 5,575 = 3,173. EPS guidance midpoints (5.00 + 5.15) / 2 = 5.075; (5.04 + 5.16) / 2 = 5.10; (2.66 + 2.76) / 2 = 2.71. Protection from 2026: 2043 - 2026 = 17 years; 2028 - 2026 = 2 years. Year-end P/E = market value / net income: 147.55 / 4.442 = 33.2 (2015); 162.31 / 3.920 = 41.4 (2016); 153.30 / 2.394 = 64.0 (2017); 198.69 / 6.220 = 31.9 (2018); 231.56 / 9.843 = 23.5 (2019); 206.96 / 7.067 = 29.3 (2020); 193.59 / 13.049 = 14.8 (2021); 281.30 / 14.519 = 19.4 (2022); 276.26 / 0.365 = 757 (2023); 251.65 / 17.117 = 14.7 (2024); 261.26 / 18.254 = 14.3 (2025); 365.09 / 3.173 = 115.1 (TTM). Return on average equity 2025: 18,254 / ((52,606 + 46,313) / 2) = 18,254 / 49,460 = 36.9%. Gross profit 2025 65,011 - 16,382 = 48,629; 48,629 / 65,011 = 74.8%; royalty 792 / 16,382 = 4.8% of cost of sales. Keytruda increase 2021-2025 31,681 - 17,186 = 14,495; sales increase 65,011 - 48,704 = 16,307. US sales 36,510 / 28,480 - 1 = 28%. Pharmaceutical margin 2021 30,977 / 42,754 = 72.5%. Livestock less companion 3,295 - 2,273 = 1,022 (2021); 3,896 - 2,458 = 1,438 (2025). Prevnar 6,494 / Vaxneuvance 825 = 7.9. Animal Health 2025 6,354 against Keytruda franchise Q2 2026 8,366 - revenue mix, concentration and geography. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Merck's Forms 10-K and 10-Q, results releases, the Bristol Myers Squibb, Pfizer and Zoetis 10-Ks and market data; operands shown in the source line.
  9. Moat Explorer calcUnallocated research was $14,987 million in 2025, about a quarter of Pharma's sales; Animal Health spends about 7% of its sales on research.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ millions unless stated). Lines 2025: Keytruda 31,641 + Keytruda Qlex 40 = 31,681; other pharmaceutical 58,142 - 31,681 - 5,233 = 21,228; Animal Health 6,354; other revenue 515; total 31,681 + 5,233 + 21,228 + 6,354 + 515 = 65,011. 2024: 29,482; 57,400 - 29,482 - 8,583 = 19,335. 2023: 53,583 - 25,011 - 8,886 = 19,686. 2022: 52,005 - 20,937 - 6,897 = 24,171. 2021: 42,754 - 17,186 - 5,673 = 19,895. Everything else 2025: 65,011 - 31,681 = 33,330. Keytruda share of sales: 11,084 / 39,121 = 28.3% (2019, continuing basis); 17,186 / 48,704 = 35.3% (2021); 25,011 / 60,115 = 41.6% (2023); 31,681 / 65,011 = 48.7% (2025); Q2 2026 8,366 / 16,607 = 50.4%. Keytruda and Gardasil Q2 2026 (8,366 + 1,169) / 16,607 = 9,535 / 16,607 = 57.4%. Qlex 463 / 8,366 = 5.5%. Keytruda growth: 31,641 / 29,482 - 1 = 7.3% (2025); 29,482 / 25,011 - 1 = 17.9% (2024); 31,641 / 17,186 = 1.84, compound (1.84)^(1/4) - 1 = 16.5% a year; 31,641 / 11,084 = 2.85 (2019-2025). US share of Keytruda 18,829 / 31,641 = 59.5%. International Keytruda 12,812 / 11,610 - 1 = 10.4%; US Keytruda 18,829 / 17,872 - 1 = 5.4%. US Keytruda share of total sales 18,829 / 65,011 = 29.0%. Royalty: 2.5% x 31,681 = 792; 6.5% x 31,681 = 2,059. Gardasil US royalty 7% x 2,641 = 185. Winrevair royalty 22% x 1,443 = 317; 22% x 419 = 92; Winrevair Q2 2026 588 x 4 = 2,352, 22% x 2,352 = 517. Segment margins: Pharmaceutical 45,754 / 58,142 = 78.7% (2025); Q2 2026 11,612 / 14,760 = 78.7% (recast basis). Animal Health 2,131 / 6,354 = 33.5% (2025); 1,938 / 5,877 = 33.0% (2024); 1,737 / 5,625 = 30.9% (2023); 1,963 / 5,550 = 35.4% (2022); 1,950 / 5,568 = 35.0% (2021); Q2 2026 636 / 1,775 = 35.8%. Unallocated research 14,987 / 58,142 = 25.8%; Animal Health research 448 / 6,354 = 7.1%. Animal Health segment profit 2,131 / 45,754 = 4.7% of Pharmaceutical. Gardasil: international 2,592 / 6,158 - 1 = -57.9%; US 2,641 / 2,083 - 1 = 26.8%; share 5,233 / 65,011 = 8.0%; share of sales 2021 5,673 / 48,704 = 11.6%, 2022 6,897 / 59,283 = 11.6%, 2023 8,886 / 60,115 = 14.8%, 2024 8,583 / 64,168 = 13.4%; Q2 2026 1,169 x 4 = 4,676. Vaccines H1 2026 2,314 + 2,361 = 4,675; H1 2025 2,607 + 2,370 = 4,977; 4,675 / 4,977 - 1 = -6.1%. Childhood vaccines growth 2,368 / 2,241 - 1 = 5.7%; 2,485 / 2,368 - 1 = 4.9%; 2,451 / 2,485 - 1 = -1.4%. Pneumococcal: Pneumovax 166 / 893 - 1 = -81%; 825 + 759 + 166 = 1,750; 1,750 / 893 = 2.0; (825 + 759) / 166 = 9.5; Capvaxive + Vaxneuvance 759 + 825 = 1,584; 1,584 / 6,494 = 24.4% of Prevnar. Animal Health: livestock 3,896 / 6,354 = 61.3%; livestock growth 3,300 / 3,295 - 1 = 0.2%, 3,337 / 3,300 - 1 = 1.1%, 3,462 / 3,337 - 1 = 3.7%, 3,896 / 3,462 - 1 = 12.5%; companion 2,458 / 2,415 - 1 = 1.8%, 2,458 / 2,273 - 1 = 8.1%; companion excluding Bravecto 2,458 - 1,100 = 1,358; rest of Animal Health 6,354 - 1,100 = 5,254; Bravecto 359 / 335 - 1 = 7%. Segment 6,354 / 5,877 - 1 = 8.1%; 5,625 / 5,568 - 1 = 1.0%; Q2 2026 1,775 / 1,646 - 1 = 7.8%; compound (6,354 / 5,568)^(1/4) - 1 = 3.4% a year; share 6,354 / 65,011 = 9.8%; 6,354 / 31,681 = 0.20 of Keytruda; 6,354 / 9,467 = 67% of Zoetis; Zoetis 9,467 / 9,256 - 1 = 2.3%. Competitors: Keytruda 31,641 / Opdivo 10,049 = 3.1. Geography: US 36,510 / 65,011 = 56.2%; China 1,939 / 6,802 - 1 = -71%; China share 4,378 / 48,704 = 9.0% (2021), 6,802 / 60,115 = 11.3% (2023), 5,494 / 64,168 = 8.6% (2024), 1,939 / 65,011 = 3.0% (2025); other regions 65,011 - 36,510 - 14,580 - 2,711 - 1,939 = 9,271. Wholesaler receivables 22% + 21% + 13% = 56% (2025); 21 + 21 + 13 = 55 (2024); 21 + 20 + 14 = 55 (2023). Januvia and Janumet: 3,324 + 1,964 = 5,288 (2021); 2,189 + 1,177 = 3,366 (2023); 1,334 + 935 = 2,269 (2024); 1,604 + 940 = 2,544 (2025). Newer products Q2 2026: 588 + 271 + 204 + 184 = 1,247; 1,247 / 8,366 = 14.9%. Bridion 1,841 / 4 = 460 a quarter. Other pharmaceutical Q2 2026 14,760 - 8,366 - 1,169 = 5,225; Q2 2025 14,050 - 7,956 - 1,126 = 4,968; 5,225 / 4,968 - 1 = 5.2%; 2025 share 21,228 / 65,011 = 32.7%. Research: 30,531 / 60,115 = 50.8% of sales (2023). Charges 2026 9.0 + 5.7 = 14.7 bn; per share 3.62 + 2.31 = 5.93. Ohtuvayre 204 x 4 = 816; 12,100 / 816 = 14.8. Tax guidance midpoints (23.5 + 24.5) / 2 = 24.0; (35.0 + 36.0) / 2 = 35.5. Balance sheet: net debt end-2025 2,589 + 46,750 - 14,565 = 34,774; end-2024 2,649 + 34,462 - 13,242 - 447 = 23,422; end-2023 1,372 + 33,683 - 6,841 - 252 = 27,962; 30 June 2026 2,825 + 51,081 - 6,849 - 292 = 46,765, cash and short-term investments 6,849 + 292 = 7,141; net debt to equity 34,774 / 52,606 = 0.66; 46,765 / 41,933 = 1.1. Net income 2023-2025 365 + 17,117 + 18,254 = 35,736. Valuation: year-end 2025 market value 261.26 bn / net income 18.254 bn = 14.3; free cash flow 2025 16,472 - 4,112 = 12,360; 12,360 / 365,090 = 3.4%. Trailing twelve months to June 2026: sales 65,011 - 31,335 + 32,893 = 66,569; net income 18,254 - 9,506 - 5,575 = 3,173. EPS guidance midpoints (5.00 + 5.15) / 2 = 5.075; (5.04 + 5.16) / 2 = 5.10; (2.66 + 2.76) / 2 = 2.71. Protection from 2026: 2043 - 2026 = 17 years; 2028 - 2026 = 2 years. Year-end P/E = market value / net income: 147.55 / 4.442 = 33.2 (2015); 162.31 / 3.920 = 41.4 (2016); 153.30 / 2.394 = 64.0 (2017); 198.69 / 6.220 = 31.9 (2018); 231.56 / 9.843 = 23.5 (2019); 206.96 / 7.067 = 29.3 (2020); 193.59 / 13.049 = 14.8 (2021); 281.30 / 14.519 = 19.4 (2022); 276.26 / 0.365 = 757 (2023); 251.65 / 17.117 = 14.7 (2024); 261.26 / 18.254 = 14.3 (2025); 365.09 / 3.173 = 115.1 (TTM). Return on average equity 2025: 18,254 / ((52,606 + 46,313) / 2) = 18,254 / 49,460 = 36.9%. Gross profit 2025 65,011 - 16,382 = 48,629; 48,629 / 65,011 = 74.8%; royalty 792 / 16,382 = 4.8% of cost of sales. Keytruda increase 2021-2025 31,681 - 17,186 = 14,495; sales increase 65,011 - 48,704 = 16,307. US sales 36,510 / 28,480 - 1 = 28%. Pharmaceutical margin 2021 30,977 / 42,754 = 72.5%. Livestock less companion 3,295 - 2,273 = 1,022 (2021); 3,896 - 2,458 = 1,438 (2025). Prevnar 6,494 / Vaxneuvance 825 = 7.9. Animal Health 2025 6,354 against Keytruda franchise Q2 2026 8,366 - revenue mix, concentration and geography. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Merck's Forms 10-K and 10-Q, results releases, the Bristol Myers Squibb, Pfizer and Zoetis 10-Ks and market data; operands shown in the source line.
  10. Moat Explorer calcIt was about 35.0% in 2021 and 30.9% in 2023, and in the second quarter of 2026 segment profit was $636 million on $1,775 million of sales, about 35.8%.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ millions unless stated). Lines 2025: Keytruda 31,641 + Keytruda Qlex 40 = 31,681; other pharmaceutical 58,142 - 31,681 - 5,233 = 21,228; Animal Health 6,354; other revenue 515; total 31,681 + 5,233 + 21,228 + 6,354 + 515 = 65,011. 2024: 29,482; 57,400 - 29,482 - 8,583 = 19,335. 2023: 53,583 - 25,011 - 8,886 = 19,686. 2022: 52,005 - 20,937 - 6,897 = 24,171. 2021: 42,754 - 17,186 - 5,673 = 19,895. Everything else 2025: 65,011 - 31,681 = 33,330. Keytruda share of sales: 11,084 / 39,121 = 28.3% (2019, continuing basis); 17,186 / 48,704 = 35.3% (2021); 25,011 / 60,115 = 41.6% (2023); 31,681 / 65,011 = 48.7% (2025); Q2 2026 8,366 / 16,607 = 50.4%. Keytruda and Gardasil Q2 2026 (8,366 + 1,169) / 16,607 = 9,535 / 16,607 = 57.4%. Qlex 463 / 8,366 = 5.5%. Keytruda growth: 31,641 / 29,482 - 1 = 7.3% (2025); 29,482 / 25,011 - 1 = 17.9% (2024); 31,641 / 17,186 = 1.84, compound (1.84)^(1/4) - 1 = 16.5% a year; 31,641 / 11,084 = 2.85 (2019-2025). US share of Keytruda 18,829 / 31,641 = 59.5%. International Keytruda 12,812 / 11,610 - 1 = 10.4%; US Keytruda 18,829 / 17,872 - 1 = 5.4%. US Keytruda share of total sales 18,829 / 65,011 = 29.0%. Royalty: 2.5% x 31,681 = 792; 6.5% x 31,681 = 2,059. Gardasil US royalty 7% x 2,641 = 185. Winrevair royalty 22% x 1,443 = 317; 22% x 419 = 92; Winrevair Q2 2026 588 x 4 = 2,352, 22% x 2,352 = 517. Segment margins: Pharmaceutical 45,754 / 58,142 = 78.7% (2025); Q2 2026 11,612 / 14,760 = 78.7% (recast basis). Animal Health 2,131 / 6,354 = 33.5% (2025); 1,938 / 5,877 = 33.0% (2024); 1,737 / 5,625 = 30.9% (2023); 1,963 / 5,550 = 35.4% (2022); 1,950 / 5,568 = 35.0% (2021); Q2 2026 636 / 1,775 = 35.8%. Unallocated research 14,987 / 58,142 = 25.8%; Animal Health research 448 / 6,354 = 7.1%. Animal Health segment profit 2,131 / 45,754 = 4.7% of Pharmaceutical. Gardasil: international 2,592 / 6,158 - 1 = -57.9%; US 2,641 / 2,083 - 1 = 26.8%; share 5,233 / 65,011 = 8.0%; share of sales 2021 5,673 / 48,704 = 11.6%, 2022 6,897 / 59,283 = 11.6%, 2023 8,886 / 60,115 = 14.8%, 2024 8,583 / 64,168 = 13.4%; Q2 2026 1,169 x 4 = 4,676. Vaccines H1 2026 2,314 + 2,361 = 4,675; H1 2025 2,607 + 2,370 = 4,977; 4,675 / 4,977 - 1 = -6.1%. Childhood vaccines growth 2,368 / 2,241 - 1 = 5.7%; 2,485 / 2,368 - 1 = 4.9%; 2,451 / 2,485 - 1 = -1.4%. Pneumococcal: Pneumovax 166 / 893 - 1 = -81%; 825 + 759 + 166 = 1,750; 1,750 / 893 = 2.0; (825 + 759) / 166 = 9.5; Capvaxive + Vaxneuvance 759 + 825 = 1,584; 1,584 / 6,494 = 24.4% of Prevnar. Animal Health: livestock 3,896 / 6,354 = 61.3%; livestock growth 3,300 / 3,295 - 1 = 0.2%, 3,337 / 3,300 - 1 = 1.1%, 3,462 / 3,337 - 1 = 3.7%, 3,896 / 3,462 - 1 = 12.5%; companion 2,458 / 2,415 - 1 = 1.8%, 2,458 / 2,273 - 1 = 8.1%; companion excluding Bravecto 2,458 - 1,100 = 1,358; rest of Animal Health 6,354 - 1,100 = 5,254; Bravecto 359 / 335 - 1 = 7%. Segment 6,354 / 5,877 - 1 = 8.1%; 5,625 / 5,568 - 1 = 1.0%; Q2 2026 1,775 / 1,646 - 1 = 7.8%; compound (6,354 / 5,568)^(1/4) - 1 = 3.4% a year; share 6,354 / 65,011 = 9.8%; 6,354 / 31,681 = 0.20 of Keytruda; 6,354 / 9,467 = 67% of Zoetis; Zoetis 9,467 / 9,256 - 1 = 2.3%. Competitors: Keytruda 31,641 / Opdivo 10,049 = 3.1. Geography: US 36,510 / 65,011 = 56.2%; China 1,939 / 6,802 - 1 = -71%; China share 4,378 / 48,704 = 9.0% (2021), 6,802 / 60,115 = 11.3% (2023), 5,494 / 64,168 = 8.6% (2024), 1,939 / 65,011 = 3.0% (2025); other regions 65,011 - 36,510 - 14,580 - 2,711 - 1,939 = 9,271. Wholesaler receivables 22% + 21% + 13% = 56% (2025); 21 + 21 + 13 = 55 (2024); 21 + 20 + 14 = 55 (2023). Januvia and Janumet: 3,324 + 1,964 = 5,288 (2021); 2,189 + 1,177 = 3,366 (2023); 1,334 + 935 = 2,269 (2024); 1,604 + 940 = 2,544 (2025). Newer products Q2 2026: 588 + 271 + 204 + 184 = 1,247; 1,247 / 8,366 = 14.9%. Bridion 1,841 / 4 = 460 a quarter. Other pharmaceutical Q2 2026 14,760 - 8,366 - 1,169 = 5,225; Q2 2025 14,050 - 7,956 - 1,126 = 4,968; 5,225 / 4,968 - 1 = 5.2%; 2025 share 21,228 / 65,011 = 32.7%. Research: 30,531 / 60,115 = 50.8% of sales (2023). Charges 2026 9.0 + 5.7 = 14.7 bn; per share 3.62 + 2.31 = 5.93. Ohtuvayre 204 x 4 = 816; 12,100 / 816 = 14.8. Tax guidance midpoints (23.5 + 24.5) / 2 = 24.0; (35.0 + 36.0) / 2 = 35.5. Balance sheet: net debt end-2025 2,589 + 46,750 - 14,565 = 34,774; end-2024 2,649 + 34,462 - 13,242 - 447 = 23,422; end-2023 1,372 + 33,683 - 6,841 - 252 = 27,962; 30 June 2026 2,825 + 51,081 - 6,849 - 292 = 46,765, cash and short-term investments 6,849 + 292 = 7,141; net debt to equity 34,774 / 52,606 = 0.66; 46,765 / 41,933 = 1.1. Net income 2023-2025 365 + 17,117 + 18,254 = 35,736. Valuation: year-end 2025 market value 261.26 bn / net income 18.254 bn = 14.3; free cash flow 2025 16,472 - 4,112 = 12,360; 12,360 / 365,090 = 3.4%. Trailing twelve months to June 2026: sales 65,011 - 31,335 + 32,893 = 66,569; net income 18,254 - 9,506 - 5,575 = 3,173. EPS guidance midpoints (5.00 + 5.15) / 2 = 5.075; (5.04 + 5.16) / 2 = 5.10; (2.66 + 2.76) / 2 = 2.71. Protection from 2026: 2043 - 2026 = 17 years; 2028 - 2026 = 2 years. Year-end P/E = market value / net income: 147.55 / 4.442 = 33.2 (2015); 162.31 / 3.920 = 41.4 (2016); 153.30 / 2.394 = 64.0 (2017); 198.69 / 6.220 = 31.9 (2018); 231.56 / 9.843 = 23.5 (2019); 206.96 / 7.067 = 29.3 (2020); 193.59 / 13.049 = 14.8 (2021); 281.30 / 14.519 = 19.4 (2022); 276.26 / 0.365 = 757 (2023); 251.65 / 17.117 = 14.7 (2024); 261.26 / 18.254 = 14.3 (2025); 365.09 / 3.173 = 115.1 (TTM). Return on average equity 2025: 18,254 / ((52,606 + 46,313) / 2) = 18,254 / 49,460 = 36.9%. Gross profit 2025 65,011 - 16,382 = 48,629; 48,629 / 65,011 = 74.8%; royalty 792 / 16,382 = 4.8% of cost of sales. Keytruda increase 2021-2025 31,681 - 17,186 = 14,495; sales increase 65,011 - 48,704 = 16,307. US sales 36,510 / 28,480 - 1 = 28%. Pharmaceutical margin 2021 30,977 / 42,754 = 72.5%. Livestock less companion 3,295 - 2,273 = 1,022 (2021); 3,896 - 2,458 = 1,438 (2025). Prevnar 6,494 / Vaxneuvance 825 = 7.9. Animal Health 2025 6,354 against Keytruda franchise Q2 2026 8,366 - product and segment totals, growth and royalties. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Merck's Forms 10-K and 10-Q, results releases, the Bristol Myers Squibb, Pfizer and Zoetis 10-Ks and market data; operands shown in the source line.
  11. ReportedIt was about 35.0% in 2021 and 30.9% in 2023, and in the second quarter of 2026 segment profit was $636 million on $1,775 million of sales, about 35.8%.
    Merck & Co. Form 10-Q for the quarter ended 30 June 2026 - segment profits on the recast basis, the Cidara and Terns acquisitions, the Halozyme litigation, China shipments, loss of exclusivity events and the balance sheet. — Q2 2026 · publ. 7 August 2026 · source ↗
  12. Moat Explorer calcIt was about 35.0% in 2021 and 30.9% in 2023, and in the second quarter of 2026 segment profit was $636 million on $1,775 million of sales, about 35.8%.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ millions unless stated). Lines 2025: Keytruda 31,641 + Keytruda Qlex 40 = 31,681; other pharmaceutical 58,142 - 31,681 - 5,233 = 21,228; Animal Health 6,354; other revenue 515; total 31,681 + 5,233 + 21,228 + 6,354 + 515 = 65,011. 2024: 29,482; 57,400 - 29,482 - 8,583 = 19,335. 2023: 53,583 - 25,011 - 8,886 = 19,686. 2022: 52,005 - 20,937 - 6,897 = 24,171. 2021: 42,754 - 17,186 - 5,673 = 19,895. Everything else 2025: 65,011 - 31,681 = 33,330. Keytruda share of sales: 11,084 / 39,121 = 28.3% (2019, continuing basis); 17,186 / 48,704 = 35.3% (2021); 25,011 / 60,115 = 41.6% (2023); 31,681 / 65,011 = 48.7% (2025); Q2 2026 8,366 / 16,607 = 50.4%. Keytruda and Gardasil Q2 2026 (8,366 + 1,169) / 16,607 = 9,535 / 16,607 = 57.4%. Qlex 463 / 8,366 = 5.5%. Keytruda growth: 31,641 / 29,482 - 1 = 7.3% (2025); 29,482 / 25,011 - 1 = 17.9% (2024); 31,641 / 17,186 = 1.84, compound (1.84)^(1/4) - 1 = 16.5% a year; 31,641 / 11,084 = 2.85 (2019-2025). US share of Keytruda 18,829 / 31,641 = 59.5%. International Keytruda 12,812 / 11,610 - 1 = 10.4%; US Keytruda 18,829 / 17,872 - 1 = 5.4%. US Keytruda share of total sales 18,829 / 65,011 = 29.0%. Royalty: 2.5% x 31,681 = 792; 6.5% x 31,681 = 2,059. Gardasil US royalty 7% x 2,641 = 185. Winrevair royalty 22% x 1,443 = 317; 22% x 419 = 92; Winrevair Q2 2026 588 x 4 = 2,352, 22% x 2,352 = 517. Segment margins: Pharmaceutical 45,754 / 58,142 = 78.7% (2025); Q2 2026 11,612 / 14,760 = 78.7% (recast basis). Animal Health 2,131 / 6,354 = 33.5% (2025); 1,938 / 5,877 = 33.0% (2024); 1,737 / 5,625 = 30.9% (2023); 1,963 / 5,550 = 35.4% (2022); 1,950 / 5,568 = 35.0% (2021); Q2 2026 636 / 1,775 = 35.8%. Unallocated research 14,987 / 58,142 = 25.8%; Animal Health research 448 / 6,354 = 7.1%. Animal Health segment profit 2,131 / 45,754 = 4.7% of Pharmaceutical. Gardasil: international 2,592 / 6,158 - 1 = -57.9%; US 2,641 / 2,083 - 1 = 26.8%; share 5,233 / 65,011 = 8.0%; share of sales 2021 5,673 / 48,704 = 11.6%, 2022 6,897 / 59,283 = 11.6%, 2023 8,886 / 60,115 = 14.8%, 2024 8,583 / 64,168 = 13.4%; Q2 2026 1,169 x 4 = 4,676. Vaccines H1 2026 2,314 + 2,361 = 4,675; H1 2025 2,607 + 2,370 = 4,977; 4,675 / 4,977 - 1 = -6.1%. Childhood vaccines growth 2,368 / 2,241 - 1 = 5.7%; 2,485 / 2,368 - 1 = 4.9%; 2,451 / 2,485 - 1 = -1.4%. Pneumococcal: Pneumovax 166 / 893 - 1 = -81%; 825 + 759 + 166 = 1,750; 1,750 / 893 = 2.0; (825 + 759) / 166 = 9.5; Capvaxive + Vaxneuvance 759 + 825 = 1,584; 1,584 / 6,494 = 24.4% of Prevnar. Animal Health: livestock 3,896 / 6,354 = 61.3%; livestock growth 3,300 / 3,295 - 1 = 0.2%, 3,337 / 3,300 - 1 = 1.1%, 3,462 / 3,337 - 1 = 3.7%, 3,896 / 3,462 - 1 = 12.5%; companion 2,458 / 2,415 - 1 = 1.8%, 2,458 / 2,273 - 1 = 8.1%; companion excluding Bravecto 2,458 - 1,100 = 1,358; rest of Animal Health 6,354 - 1,100 = 5,254; Bravecto 359 / 335 - 1 = 7%. Segment 6,354 / 5,877 - 1 = 8.1%; 5,625 / 5,568 - 1 = 1.0%; Q2 2026 1,775 / 1,646 - 1 = 7.8%; compound (6,354 / 5,568)^(1/4) - 1 = 3.4% a year; share 6,354 / 65,011 = 9.8%; 6,354 / 31,681 = 0.20 of Keytruda; 6,354 / 9,467 = 67% of Zoetis; Zoetis 9,467 / 9,256 - 1 = 2.3%. Competitors: Keytruda 31,641 / Opdivo 10,049 = 3.1. Geography: US 36,510 / 65,011 = 56.2%; China 1,939 / 6,802 - 1 = -71%; China share 4,378 / 48,704 = 9.0% (2021), 6,802 / 60,115 = 11.3% (2023), 5,494 / 64,168 = 8.6% (2024), 1,939 / 65,011 = 3.0% (2025); other regions 65,011 - 36,510 - 14,580 - 2,711 - 1,939 = 9,271. Wholesaler receivables 22% + 21% + 13% = 56% (2025); 21 + 21 + 13 = 55 (2024); 21 + 20 + 14 = 55 (2023). Januvia and Janumet: 3,324 + 1,964 = 5,288 (2021); 2,189 + 1,177 = 3,366 (2023); 1,334 + 935 = 2,269 (2024); 1,604 + 940 = 2,544 (2025). Newer products Q2 2026: 588 + 271 + 204 + 184 = 1,247; 1,247 / 8,366 = 14.9%. Bridion 1,841 / 4 = 460 a quarter. Other pharmaceutical Q2 2026 14,760 - 8,366 - 1,169 = 5,225; Q2 2025 14,050 - 7,956 - 1,126 = 4,968; 5,225 / 4,968 - 1 = 5.2%; 2025 share 21,228 / 65,011 = 32.7%. Research: 30,531 / 60,115 = 50.8% of sales (2023). Charges 2026 9.0 + 5.7 = 14.7 bn; per share 3.62 + 2.31 = 5.93. Ohtuvayre 204 x 4 = 816; 12,100 / 816 = 14.8. Tax guidance midpoints (23.5 + 24.5) / 2 = 24.0; (35.0 + 36.0) / 2 = 35.5. Balance sheet: net debt end-2025 2,589 + 46,750 - 14,565 = 34,774; end-2024 2,649 + 34,462 - 13,242 - 447 = 23,422; end-2023 1,372 + 33,683 - 6,841 - 252 = 27,962; 30 June 2026 2,825 + 51,081 - 6,849 - 292 = 46,765, cash and short-term investments 6,849 + 292 = 7,141; net debt to equity 34,774 / 52,606 = 0.66; 46,765 / 41,933 = 1.1. Net income 2023-2025 365 + 17,117 + 18,254 = 35,736. Valuation: year-end 2025 market value 261.26 bn / net income 18.254 bn = 14.3; free cash flow 2025 16,472 - 4,112 = 12,360; 12,360 / 365,090 = 3.4%. Trailing twelve months to June 2026: sales 65,011 - 31,335 + 32,893 = 66,569; net income 18,254 - 9,506 - 5,575 = 3,173. EPS guidance midpoints (5.00 + 5.15) / 2 = 5.075; (5.04 + 5.16) / 2 = 5.10; (2.66 + 2.76) / 2 = 2.71. Protection from 2026: 2043 - 2026 = 17 years; 2028 - 2026 = 2 years. Year-end P/E = market value / net income: 147.55 / 4.442 = 33.2 (2015); 162.31 / 3.920 = 41.4 (2016); 153.30 / 2.394 = 64.0 (2017); 198.69 / 6.220 = 31.9 (2018); 231.56 / 9.843 = 23.5 (2019); 206.96 / 7.067 = 29.3 (2020); 193.59 / 13.049 = 14.8 (2021); 281.30 / 14.519 = 19.4 (2022); 276.26 / 0.365 = 757 (2023); 251.65 / 17.117 = 14.7 (2024); 261.26 / 18.254 = 14.3 (2025); 365.09 / 3.173 = 115.1 (TTM). Return on average equity 2025: 18,254 / ((52,606 + 46,313) / 2) = 18,254 / 49,460 = 36.9%. Gross profit 2025 65,011 - 16,382 = 48,629; 48,629 / 65,011 = 74.8%; royalty 792 / 16,382 = 4.8% of cost of sales. Keytruda increase 2021-2025 31,681 - 17,186 = 14,495; sales increase 65,011 - 48,704 = 16,307. US sales 36,510 / 28,480 - 1 = 28%. Pharmaceutical margin 2021 30,977 / 42,754 = 72.5%. Livestock less companion 3,295 - 2,273 = 1,022 (2021); 3,896 - 2,458 = 1,438 (2025). Prevnar 6,494 / Vaxneuvance 825 = 7.9. Animal Health 2025 6,354 against Keytruda franchise Q2 2026 8,366 - product and segment totals, growth and royalties. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Merck's Forms 10-K and 10-Q, results releases, the Bristol Myers Squibb, Pfizer and Zoetis 10-Ks and market data; operands shown in the source line.
  13. ReportedPharmaceutical segment profit was $30,977 million on $42,754 million of sales in 2021 and $45,754 million on $58,142 million in 2025, from about 72.5% to about 78.7%.
    Merck & Co. Form 10-K for fiscal 2023 - product sales for 2021-2023, the Prometheus, Daiichi Sankyo and Imago charges, impairments, receivables concentration and the Zhifei distribution arrangement in China. — FY2023 · publ. February 2024 · source ↗
  14. ReportedPharmaceutical segment profit was $30,977 million on $42,754 million of sales in 2021 and $45,754 million on $58,142 million in 2025, from about 72.5% to about 78.7%.
    Merck & Co. Form 10-K for fiscal 2025 - financial statements and notes: earnings, cash flow, balance sheet, acquisitions, research and segment profit. — FY2025 · publ. 24 February 2026 · source ↗
  15. Moat Explorer calcPharmaceutical segment profit was $30,977 million on $42,754 million of sales in 2021 and $45,754 million on $58,142 million in 2025, from about 72.5% to about 78.7%.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ millions unless stated). Lines 2025: Keytruda 31,641 + Keytruda Qlex 40 = 31,681; other pharmaceutical 58,142 - 31,681 - 5,233 = 21,228; Animal Health 6,354; other revenue 515; total 31,681 + 5,233 + 21,228 + 6,354 + 515 = 65,011. 2024: 29,482; 57,400 - 29,482 - 8,583 = 19,335. 2023: 53,583 - 25,011 - 8,886 = 19,686. 2022: 52,005 - 20,937 - 6,897 = 24,171. 2021: 42,754 - 17,186 - 5,673 = 19,895. Everything else 2025: 65,011 - 31,681 = 33,330. Keytruda share of sales: 11,084 / 39,121 = 28.3% (2019, continuing basis); 17,186 / 48,704 = 35.3% (2021); 25,011 / 60,115 = 41.6% (2023); 31,681 / 65,011 = 48.7% (2025); Q2 2026 8,366 / 16,607 = 50.4%. Keytruda and Gardasil Q2 2026 (8,366 + 1,169) / 16,607 = 9,535 / 16,607 = 57.4%. Qlex 463 / 8,366 = 5.5%. Keytruda growth: 31,641 / 29,482 - 1 = 7.3% (2025); 29,482 / 25,011 - 1 = 17.9% (2024); 31,641 / 17,186 = 1.84, compound (1.84)^(1/4) - 1 = 16.5% a year; 31,641 / 11,084 = 2.85 (2019-2025). US share of Keytruda 18,829 / 31,641 = 59.5%. International Keytruda 12,812 / 11,610 - 1 = 10.4%; US Keytruda 18,829 / 17,872 - 1 = 5.4%. US Keytruda share of total sales 18,829 / 65,011 = 29.0%. Royalty: 2.5% x 31,681 = 792; 6.5% x 31,681 = 2,059. Gardasil US royalty 7% x 2,641 = 185. Winrevair royalty 22% x 1,443 = 317; 22% x 419 = 92; Winrevair Q2 2026 588 x 4 = 2,352, 22% x 2,352 = 517. Segment margins: Pharmaceutical 45,754 / 58,142 = 78.7% (2025); Q2 2026 11,612 / 14,760 = 78.7% (recast basis). Animal Health 2,131 / 6,354 = 33.5% (2025); 1,938 / 5,877 = 33.0% (2024); 1,737 / 5,625 = 30.9% (2023); 1,963 / 5,550 = 35.4% (2022); 1,950 / 5,568 = 35.0% (2021); Q2 2026 636 / 1,775 = 35.8%. Unallocated research 14,987 / 58,142 = 25.8%; Animal Health research 448 / 6,354 = 7.1%. Animal Health segment profit 2,131 / 45,754 = 4.7% of Pharmaceutical. Gardasil: international 2,592 / 6,158 - 1 = -57.9%; US 2,641 / 2,083 - 1 = 26.8%; share 5,233 / 65,011 = 8.0%; share of sales 2021 5,673 / 48,704 = 11.6%, 2022 6,897 / 59,283 = 11.6%, 2023 8,886 / 60,115 = 14.8%, 2024 8,583 / 64,168 = 13.4%; Q2 2026 1,169 x 4 = 4,676. Vaccines H1 2026 2,314 + 2,361 = 4,675; H1 2025 2,607 + 2,370 = 4,977; 4,675 / 4,977 - 1 = -6.1%. Childhood vaccines growth 2,368 / 2,241 - 1 = 5.7%; 2,485 / 2,368 - 1 = 4.9%; 2,451 / 2,485 - 1 = -1.4%. Pneumococcal: Pneumovax 166 / 893 - 1 = -81%; 825 + 759 + 166 = 1,750; 1,750 / 893 = 2.0; (825 + 759) / 166 = 9.5; Capvaxive + Vaxneuvance 759 + 825 = 1,584; 1,584 / 6,494 = 24.4% of Prevnar. Animal Health: livestock 3,896 / 6,354 = 61.3%; livestock growth 3,300 / 3,295 - 1 = 0.2%, 3,337 / 3,300 - 1 = 1.1%, 3,462 / 3,337 - 1 = 3.7%, 3,896 / 3,462 - 1 = 12.5%; companion 2,458 / 2,415 - 1 = 1.8%, 2,458 / 2,273 - 1 = 8.1%; companion excluding Bravecto 2,458 - 1,100 = 1,358; rest of Animal Health 6,354 - 1,100 = 5,254; Bravecto 359 / 335 - 1 = 7%. Segment 6,354 / 5,877 - 1 = 8.1%; 5,625 / 5,568 - 1 = 1.0%; Q2 2026 1,775 / 1,646 - 1 = 7.8%; compound (6,354 / 5,568)^(1/4) - 1 = 3.4% a year; share 6,354 / 65,011 = 9.8%; 6,354 / 31,681 = 0.20 of Keytruda; 6,354 / 9,467 = 67% of Zoetis; Zoetis 9,467 / 9,256 - 1 = 2.3%. Competitors: Keytruda 31,641 / Opdivo 10,049 = 3.1. Geography: US 36,510 / 65,011 = 56.2%; China 1,939 / 6,802 - 1 = -71%; China share 4,378 / 48,704 = 9.0% (2021), 6,802 / 60,115 = 11.3% (2023), 5,494 / 64,168 = 8.6% (2024), 1,939 / 65,011 = 3.0% (2025); other regions 65,011 - 36,510 - 14,580 - 2,711 - 1,939 = 9,271. Wholesaler receivables 22% + 21% + 13% = 56% (2025); 21 + 21 + 13 = 55 (2024); 21 + 20 + 14 = 55 (2023). Januvia and Janumet: 3,324 + 1,964 = 5,288 (2021); 2,189 + 1,177 = 3,366 (2023); 1,334 + 935 = 2,269 (2024); 1,604 + 940 = 2,544 (2025). Newer products Q2 2026: 588 + 271 + 204 + 184 = 1,247; 1,247 / 8,366 = 14.9%. Bridion 1,841 / 4 = 460 a quarter. Other pharmaceutical Q2 2026 14,760 - 8,366 - 1,169 = 5,225; Q2 2025 14,050 - 7,956 - 1,126 = 4,968; 5,225 / 4,968 - 1 = 5.2%; 2025 share 21,228 / 65,011 = 32.7%. Research: 30,531 / 60,115 = 50.8% of sales (2023). Charges 2026 9.0 + 5.7 = 14.7 bn; per share 3.62 + 2.31 = 5.93. Ohtuvayre 204 x 4 = 816; 12,100 / 816 = 14.8. Tax guidance midpoints (23.5 + 24.5) / 2 = 24.0; (35.0 + 36.0) / 2 = 35.5. Balance sheet: net debt end-2025 2,589 + 46,750 - 14,565 = 34,774; end-2024 2,649 + 34,462 - 13,242 - 447 = 23,422; end-2023 1,372 + 33,683 - 6,841 - 252 = 27,962; 30 June 2026 2,825 + 51,081 - 6,849 - 292 = 46,765, cash and short-term investments 6,849 + 292 = 7,141; net debt to equity 34,774 / 52,606 = 0.66; 46,765 / 41,933 = 1.1. Net income 2023-2025 365 + 17,117 + 18,254 = 35,736. Valuation: year-end 2025 market value 261.26 bn / net income 18.254 bn = 14.3; free cash flow 2025 16,472 - 4,112 = 12,360; 12,360 / 365,090 = 3.4%. Trailing twelve months to June 2026: sales 65,011 - 31,335 + 32,893 = 66,569; net income 18,254 - 9,506 - 5,575 = 3,173. EPS guidance midpoints (5.00 + 5.15) / 2 = 5.075; (5.04 + 5.16) / 2 = 5.10; (2.66 + 2.76) / 2 = 2.71. Protection from 2026: 2043 - 2026 = 17 years; 2028 - 2026 = 2 years. Year-end P/E = market value / net income: 147.55 / 4.442 = 33.2 (2015); 162.31 / 3.920 = 41.4 (2016); 153.30 / 2.394 = 64.0 (2017); 198.69 / 6.220 = 31.9 (2018); 231.56 / 9.843 = 23.5 (2019); 206.96 / 7.067 = 29.3 (2020); 193.59 / 13.049 = 14.8 (2021); 281.30 / 14.519 = 19.4 (2022); 276.26 / 0.365 = 757 (2023); 251.65 / 17.117 = 14.7 (2024); 261.26 / 18.254 = 14.3 (2025); 365.09 / 3.173 = 115.1 (TTM). Return on average equity 2025: 18,254 / ((52,606 + 46,313) / 2) = 18,254 / 49,460 = 36.9%. Gross profit 2025 65,011 - 16,382 = 48,629; 48,629 / 65,011 = 74.8%; royalty 792 / 16,382 = 4.8% of cost of sales. Keytruda increase 2021-2025 31,681 - 17,186 = 14,495; sales increase 65,011 - 48,704 = 16,307. US sales 36,510 / 28,480 - 1 = 28%. Pharmaceutical margin 2021 30,977 / 42,754 = 72.5%. Livestock less companion 3,295 - 2,273 = 1,022 (2021); 3,896 - 2,458 = 1,438 (2025). Prevnar 6,494 / Vaxneuvance 825 = 7.9. Animal Health 2025 6,354 against Keytruda franchise Q2 2026 8,366 - product and segment totals, growth and royalties. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Merck's Forms 10-K and 10-Q, results releases, the Bristol Myers Squibb, Pfizer and Zoetis 10-Ks and market data; operands shown in the source line.
Sources
Generated September 25, 2026