Merck & Co., Inc. (MRK): ESMO 2026 Preview: Two Major New Product Opptys On The Horizon With sac-TMT and INT

Heading into the ESMO 2026 conference, we expect strong data for MRK's sac-TMT (TROP2 ADC) and INT (individualized neoantigen therapy). We increasingly view sac-TMT as an anchor asset for MRK in lung cancer as well as a number of other settings. The readout of OptiTROP-Lung06 should help derisk the role for sac-TMT in the NSCLC PD-L1 negative population and provide a positive read-through in the low (TPS 1-49%) setting as well. Together with already strong data in the PD-L1 high setting, this should further substantiate a broad opportunity set for sac-TMT in NSCLC and other tumor types (JPMe $10bn+). For INT, we expect Ph3 data in adjuvant melanoma to be impressive, with a ~$3bn opportunity in this setting alone. MRK has re-rated on enthusiasm for these two drugs, but we continue to see upside, particularly given pipeline readouts in 2027. Remain OW with a $165 price target.