What happened? The US Court of Appeals has rejected Merck''s Mavenclad IPR appeal on the Hopewell case against TWi Pharmaceuticals which had received its first negative decision in July 2025. The court argued that Merck has not brought any new (relevant) arguments from the previous case as their unpatentability determination claims on the ''947 and ''903 oral dosing patents were not directly challenged in the original case, and do not offer any arguments as to why these claims should be upheld. This potentially clears the path for Mavenlad generics to enter in the US after November 22nd of this year, versus current market expectations of October 2026. BNPP Exane View: MRCG''s base case assumption was that US Mavenclad (EUR0.5bn sales in 2024e) would face LOE in Oct-26. We previously highlighted the downside risk of generic Mavenclad launching in the US around year end. MRCG have communicated that they intend to file a petition for a rehearing, though recognise that today''s ruling potentially clears the path for Mavenclad generics to enter. One generic agent has tentative approval and could enter the market after November 22nd dependent on receiving final FDA approval. Taking an assumed 5-10% royalty payaway into account, we see up to 5% group EBITDA risk for 2026 as a result of a potential earlier-than-expected generic launch. While there were positives to take from the recent CMD (details here), we have been seeking clarity on the Mavenclad generic risk, upcoming competitor data to Ogsiveo in desmoid tumours from Immunome''s AL-102, and consensus forecasts to better reflect reality before we would consider revisiting our Underperform recommendation. Our 2025-30e EPS forecasts up to -9% below consensus currently. Investment tweet We rate Merck KGaA at Underperform with a EUR116 TP based on a blended PE and DCF valuation. 2025-30e revenue/EPS CAGR of 5/6% versus EU Pharma on 13x offering 6/9% CAGR. Our PE-based valuation is EUR114 based on a...