Merck Shares Face a Critical Test as Generic Competition Looms

Investors in Merck are grappling with uncertainty following the U.S. market entry of generic competitors for Mavenclad, a key multiple sclerosis drug. The company’s leadership is looking to its electronics division to offset this pressure, but a central question now dominates market sentiment: Will growth in the semiconductor sector be sufficient to bridge the impending gap in the pharmaceutical portfolio in time?

Market Sentiment Sours Amid Price Decline

The subdued outlook has triggered a significant negative reaction on the stock market. Shares have shed more than ten percent of their value in just the past week. Closing at a price of 109.25 euros yesterday, the stock has now fallen decisively below its 50-day moving average of 125.58 euros.

Despite these fundamental concerns, a technical indicator provides a contrasting perspective. The Relative Strength Index (RSI) has dropped to a level of 22.6, signaling that the stock is technically in deeply oversold territory. Market observers often interpret such a reading as a potential precursor to a near-term rebound, at least in the short run.

A Strategic Pivot Driven by Generic Pressure

The scheduled arrival of lower-cost generic versions of Mavenclad in the United States from March 2026 onward represents a significant operational inflection point for the Darmstadt-based group. Merck has already responded to this challenge with a conservative full-year forecast.

For 2026, the company anticipates group sales to land between 20.0 and 21.1 billion euros. In a worst-case scenario, this would equate to an organic decline of one percent. The adjusted operating result (EBITDA pre) is also cautiously projected to be in the range of 5.5 to 6.0 billion euros.

Should investors sell immediately? Or is it worth buying Merck?

Beyond generic competition, potential negative currency exchange effects are also weighing on the board’s expectations. Potential bright spots, such as the possible U.S. approval for the fertility treatment Pergoveris, are not yet factored into this planning, as the relevant accelerated review procedures are still ongoing.

Electronics Division Emerges as Primary Growth Engine

To cushion the weakness in its Healthcare sector, Merck is increasingly relying on its Electronics business unit. Here, management forecasts organic sales growth of three to seven percent for 2026, buoyed by a recovery in the semiconductor cycle. This division is now positioned to act as the central growth driver for the company in the coming year.

While the firm recently highlighted its social initiatives in Africa and Asia on International Women’s Day, the dominant theme for investors remains the strategic realignment of its operational portfolio. The coming months are expected to bring clarity on the success of this strategy.

Merck is scheduled to release its first-quarter results on May 13, 2026, which will provide the first concrete data on the actual scale of revenue loss from Mavenclad. Until that report, the 52-week low of 104.85 euros stands as a critical support level for the share price.