MSD is heading into the final stretch of October with two very different storylines competing for investors’ attention: a pipeline that keeps expanding, and a valuation that keeps getting tested.
On the clinical front, the US pharma group reported positive Phase 2b results Wednesday for MK-7240-012, its monoclonal antibody Tulisokibart in hidradenitis suppurativa. The study hit its primary endpoint, with 72% of patients in the high-dose arm achieving a HiSCR50 response at 16 weeks, versus 64% in the mid-dose group and 35% on placebo.
The market’s reaction was muted, however. Media reports put the shares down 2.66% on the day of the readout, with the stock closing at EUR 127.92 — about 5.2% below its 52-week high of EUR 134.88. That leaves roughly a 41% gain year-to-date still on the table, and investors now have to decide how much of that rally the fundamentals can actually carry.
A $2.13 Billion Bet on KRAS
Two days earlier, MSD had moved to broaden its oncology pipeline through an exclusive worldwide licensing deal with SciBrunch Therapeutics for SPR2015, an oral KRAS-G12D inhibitor still in preclinical development. The agreement carries a $400 million upfront payment, with the total transaction value potentially reaching $2.13 billion if defined milestones are met.
That upfront sum will hit the third-quarter 2026 income statement as a pre-tax charge of $400 million, equivalent to roughly $0.13 per share, and will be booked in both GAAP and non-GAAP results. The move fits a broader pattern of locking in novel mechanisms against hard-to-treat tumors early, before they become competitive bidding wars.
Scotiabank Lifts Its Target
Analysts have welcomed the strategic widening of the pipeline. On Tuesday, Scotiabank raised its price target on MSD from $155.00 to $180.00 while keeping its “sector outperform” rating, citing the company’s undervalued existing products and development pipeline ahead of upcoming stress tests.
Should investors sell immediately? Or is it worth buying MSD?
The regulatory record offers some support for that optimism. The FDA cleared the Welireg-Lenvima combination on September 25 for certain adults with advanced clear cell renal cell carcinoma previously treated with PD-1 or PD-L1 therapy. Three days earlier, on September 22, the agency approved a label update for Winrevair based on Phase 3 data from the HYPERION study, strengthening its use in newly diagnosed pulmonary arterial hypertension. The EU’s CHMP issued a positive opinion on September 18 for Keytruda plus Padcev in muscle-invasive bladder cancer, and Japan cleared subcutaneous Keytruda Qlex on September 21 across all approved Keytruda indications in the country.
Late-Stage Setbacks Cloud the Picture
Not everything has gone smoothly. On September 25, MSD and Daiichi Sankyo voluntarily withdrew their marketing application for ifinatamab deruxtecan in previously treated advanced small cell lung cancer after FDA discussions concluded the submitted data fell short of accelerated approval requirements. The Phase 3 IDeate-Lung02 trial continues, but the pullback represents a meaningful delay.
A day earlier, Phase 2b/3 data from the BRUNELLO study of remigromig in diabetic macular edema added to the mixed picture. The drug proved non-inferior to ranibizumab on visual acuity change at 52 weeks, but was associated with more proliferative diabetic retinopathy, vitreous hemorrhage, and treatment-related study discontinuations.
What the October 29 Call Has to Deliver
The next hard catalyst is set: MSD will release its third-quarter 2026 business and sales figures on October 29, with a conference call at 9:00 a.m. US Eastern time. Management will need to detail the $400 million upfront charge, clarify the Phase 3 timeline for Tulisokibart, and specify the regulatory status of remigromig.
Before that, the company will host an Oncology Investor Event on Monday, October 26, at 6:00 p.m. CEST, tied to the European Society for Medical Oncology congress in Madrid. Until the quarterly update lands, the share price is likely to trade on how investors weigh pipeline risk against the promise of a broadening approval base — and on whether the market continues to read the SciBrunch outlay as a deliberate investment in oncology’s future rather than a drag on near-term earnings.
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