Mercks revenue from Keytruda in the Oct 17 quarter was US$1billion, so extrapolating the yearly revenue will be US$4billion so if Cavatak makes Keytruda 10% more sales Merck will have made their money in a year (give or take the cost of finalizing the approvals). Given that Cavatak actually showed better efficacy and safety profiles in 2015 than their product this valuation seems cheap.
