On July 2, Merck rose 3.02% in regular trading, trading at $129.22/share, with turnover of $195 million. The rally was driven by multiple investment bank upgrades and optimism surrounding the company's lung cancer pipeline.

BofA Securities raised its price target on Merck from $130 to $141 while maintaining a Buy rating, citing the upcoming Phase 3 OptiTrop-Lung06 readout that could establish SAC-TMT as a chemotherapy replacement in PD-L1-negative non-small cell lung cancer, with peak sales potentially exceeding $5 billion. Scotiabank also raised its target to $155 from $136, maintaining a Sector Outperform rating.

The upgrades come alongside a series of pipeline advances. The FDA recently approved Keytruda in combination with Trodelvy for first-line treatment of PD-L1-positive triple-negative breast cancer, reducing the risk of disease progression or death by 35%. Additionally, Merck's investigational ulcerative colitis drug tulisokibart met primary and key secondary endpoints in a Phase 3 trial, further reinforcing the company's diversified growth trajectory beyond Keytruda monotherapy.

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