Merck has recently achieved a significant milestone with the European Commission's approval of its pneumococcal vaccine CAPVAXIVE®, boosting its portfolio in the vaccines market. Despite this positive development, the company's share price encountered a 1.82% decline over the last month, a period marked by substantial turmoil across global markets. Influenced by concerns related to potential U.S. tariffs and the broader selloff in the technology sector, many investors were cautious. While the market has seen a modest recovery, Merck's performance seemed to contrast with broader market trends, like the tech sector selloff impacting investor sentiment.

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Over the last five years, Merck's total shareholder return, which includes share price appreciation and dividends, stood at 39.64%. Within this broader timeframe, certain strategic moves contributed to their performance. For instance, Merck expanded its oncology offerings with approvals such as KEYTRUDA for renal cell carcinoma and locally recurrent triple-negative breast cancer, potentially driving revenue during this period. Meanwhile, significant collaborations with companies like Daiichi Sankyo have broadened Merck’s strategic reach in burgeoning treatment areas. The company's manufacturing expansion in North Carolina with a US$1 billion facility indicates robust operational growth, feeding into its long-term strength.

Despite these successes, Merck's performance over the past year saw challenges. The decision to pause GARDASIL shipments to China due to inventory issues marked short-term disruptions. Similarly, regulatory hurdles and stiff competition continue to pressure margins and revenue projections. As a result, Merck underperformed the US market and its pharmaceuticals industry peers, highlighting external challenges that influenced its recent performance trajectory.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NYSE:MRK.

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