Citi downgrades Merck on Keytruda patent cliff, growth prospects

Brokerage Citi Research downgrades drugmaker Merck MRK.N to "neutral" from "buy", trims PT to $84 from $115

New PT still implies 8.7% upside to the stock's last close

Brokerage raises concerns about MRK's blockbuster cancer therapy Keytruda losing exclusivity in 2028, which could lead to a 10%-20% decline in sales

Brokerage sees upside to some of Merck's pipeline products, such as Winrevair, tulisokibart and enlicitide, but notes that the "clock is ticking" for these products to have a significant impact

Says that the sales recovery of MRK's HPV vaccine Gardasil is progressing at a slower pace than expected

MRK could benefit from making a large acquisition (over $10 billion) to offset the decline in Keytruda sales, says brokerage

As of last close, MRK stock down 23% YTD