Acceleron to Winrevair: $11.5 Billion Paying OffNarrow moat

Merck & Co. (MRK) — moat facet

Merck paid $11.5 billion for Acceleron, and Winrevair already sells at a rate above $2 billion a year with exclusivity to 2036.

Merck's clearest acquisition success is Winrevair. It bought Acceleron in November 2021 for total consideration of $11.5 billion1, mainly for sotatercept, a treatment for pulmonary arterial hypertension. The drug was approved in the United States in March 2024, in the European Union in August 2024 and in Japan in June 20252.

Winrevair sales ($M)41920241,44320252,352Q2 2026 x4Merck Form 10-K FY2025 and Q2 2026 release; annualised quarter calculated
From launch to a $2 billion run rate.

The launch has been fast. Winrevair sold $419 million in 2024 and $1,443 million in 20253, and $588 million in the second quarter of 2026, up 75%4. At that quarterly rate it runs above $2.3 billion a year5.

The protection is long. The patent table lists American data exclusivity for Winrevair to 20366, eight years beyond Keytruda's compound patent. It is the kind of asset Merck needs: growing, protected into the next decade and already on the market.

The economics are shared. Merck pays a 22% royalty on Winrevair sales to Bristol Myers Squibb, recorded in cost of sales7. That makes the drug less profitable to Merck than its sales suggest, a point the Competitors page returns to.

The drug is now sold in Japan as well. It was approved there in June 2025 and is marketed as Airwin8. Three major markets within fifteen months of the first approval is fast for a specialist cardiopulmonary drug.

Winrevair is proof that buying late-stage science can work. Its quarterly sales, $588 million in the second quarter of 20269, are the figure to follow; growth falling below 30% before the drug passes $3 billion a year would mean the pulmonary hypertension market is smaller than the price paid assumed.

Moat trajectory: Widening

Winrevair up 75% in Q2 2026; US data exclusivity to 2036.

The number that tests this moat
Reported
Winrevair sales, latest quarter
$588M, +75% (Q2 2026)

The acquired drug's ramp; growth below 30% before $3bn a year would mean the market is smaller than the price assumed.

Source: Merck Q2 2026 results release ↗
⚠ Threats to the moat
⚠ THREAT 01
Twenty-Two Cents of Every Winrevair Dollar
Merck hands Bristol Myers Squibb 22% of every Winrevair dollar, so the drug must grow a long way to repay the $11.5 billion Acceleron cost.
References
  1. ReportedIt bought Acceleron in November 2021 for total consideration of $11.5 billion, mainly for sotatercept, a treatment for pulmonary arterial hypertension.
    Merck & Co. Form 10-K for fiscal 2021 - the Organon spin-off, the Acceleron acquisition and 2019-2020 sales restated to continuing operations. — FY2021 · publ. February 2022 · source ↗
  2. ReportedThe drug was approved in the United States in March 2024, in the European Union in August 2024 and in Japan in June 2025.
    Merck & Co. Form 10-K for fiscal 2025 - Item 1A risk factors, patents and exclusivity, government pricing, vaccine policy and legal proceedings. — FY2025 · publ. 24 February 2026 · source ↗
  3. ReportedWinrevair sold $419 million in 2024 and $1,443 million in 2025, and $588 million in the second quarter of 2026, up 75%.
    Merck & Co. Form 10-K for fiscal 2025 - Item 7 MD&A and product sales note: sales by product, segment and country. — FY2025 · publ. 24 February 2026 · source ↗
  4. ReportedWinrevair sold $419 million in 2024 and $1,443 million in 2025, and $588 million in the second quarter of 2026, up 75%.
    Merck second-quarter 2026 results release, Form 8-K exhibit 99.1 - sales by product and pipeline highlights. — Q2 2026 · publ. 4 August 2026 · source ↗
  5. Moat Explorer calcAt that quarterly rate it runs above $2.3 billion a year.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ 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 - growth rates and changes. — 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.
  6. ReportedThe patent table lists American data exclusivity for Winrevair to 2036, eight years beyond Keytruda's compound patent.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  7. ReportedMerck pays a 22% royalty on Winrevair sales to Bristol Myers Squibb, recorded in cost of sales.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  8. ReportedIt was approved there in June 2025 and is marketed as Airwin.
    Merck & Co. Form 10-K for fiscal 2025 - Item 1 business: products, customers, segments and people. — FY2025 · publ. 24 February 2026 · source ↗
  9. ReportedIts quarterly sales, $588 million in the second quarter of 2026, are the figure to follow; growth falling below 30% before the drug passes $3 billion a year would mean the pulmonary hypertension market is smaller than the price paid assumed.
    Merck second-quarter 2026 results release, Form 8-K exhibit 99.1 - sales by product and pipeline highlights. — Q2 2026 · publ. 4 August 2026 · source ↗
Sources
Generated September 25, 2026