Merck ($MRK) Stock: Shares Lag Despite Vaccine Win as £1bn UK Plan Scrapped

TLDR

Merck stock closed at $85.15 on September 11, 2025, up 1.33% despite a weak YTD performance. Positive Phase 3 STRIDE-13 CAPVAXIVE results could drive future revenue and offset product losses. Stock remains 21.8% below the consensus analyst target of $102.33, suggesting upside potential. Merck scraps £1bn UK research center, impacting 125 jobs amid falling sector investment. ABPI warns UK life sciences risk losing competitiveness without bolder government support.

Merck & Co., Inc. (NYSE: MRK) stock closed at $85.15 on September 11, 2025, up 1.33% before dipping slightly to $85.11 in pre-market trading. The gain followed news that Merck’s Phase 3 STRIDE-13 Trial of CAPVAXIVE, a 21-valent pneumococcal vaccine, delivered positive results.

Merck & Co., Inc. (MRK)

The trial outcome reinforces Merck’s innovation pipeline, with CAPVAXIVE expected to strengthen revenue streams and help offset looming declines in GARDASIL sales and the eventual expiration of KEYTRUDA’s exclusivity.

We’re pleased to share our latest findings from a Phase 3 trial in #pneumococcal disease. Learn more: https://t.co/HVevriMnbk pic.twitter.com/4lPbgK3Qdz

— Merck (@Merck) September 11, 2025

Market outlook and valuation

Despite the vaccine success, Merck has underperformed broader markets. Year-to-date, MRK is down 12.8%, with a -23.26% one-year return, lagging the S&P 500’s gains of 12% YTD and 18.6% over one year.

Over three years, Merck returned only 6.43% versus the S&P’s 61.96%. Its five-year return of 23.4% also trails the market. Still, analysts see upside. With shares trading at $84.03, the stock sits 21.8% below the $102.33 consensus target, suggesting potential growth if revenue projections of $72 billion by 2028 are achieved.

UK expansion plans scrapped

In a separate setback, Merck canceled its planned £1bn London research center, a project intended to open by 2027. The move shifts life sciences operations back to the U.S. and impacts about 125 jobs.

US drugs giant pulls the plug on £1billion research centre in London as it claims Britain is 'not internationally competitive https://t.co/eLJCx5FosH

— Daily Mail (@DailyMail) September 10, 2025

Merck, known as MSD in Europe, cited inadequate government investment and low NHS medicine spending as key reasons for withdrawing. The decision follows a PwC and ABPI study highlighting that UK pharmaceutical R&D has underperformed since 2018, with foreign investment falling 58% between 2017 and 2023.

Industry concerns over competitiveness

ABPI chief executive Richard Torbett said the UK risks losing ground globally without policy reforms to encourage pharmaceutical investment. He emphasized the need for bold measures to attract R&D, manufacturing, and clinical trial investments.

Echoing this view, AstraZeneca’s UK president Tom Keith-Roach stressed the importance of innovative medicines for patient outcomes and economic growth.

Government response

The UK government acknowledged Merck’s decision as “concerning” but insisted the country remains attractive for investors. Officials highlighted their life sciences sector plan, which includes £600m for the Health Data Research Service and £520m for the Life Sciences Innovative Manufacturing Fund.

Despite these commitments, industry leaders warn the UK’s declining competitiveness could drive more companies to shift operations abroad.

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