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Key Catalysts Are Coming For Merck, Analyst Predicts

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In a report published Wednesday, Credit Suisse analyst V. Divan reiterated a Neutral rating on Merck & Co Inc (NYSE: MRK), with a price target of $60, after the company announced a share buyback program and positive Keytruda data in front-line melanoma.

The company has announced an additional $10 billion share repurchase program. Although both the share buyback and the Keytruda data were expected, they should "provide some support to MRK shares that have lagged the group as of late," Divan said.

"We had already expected the KEYNOTE-006 study to be a positive one and had anticipated an early termination in 1H 2015," the analyst mentioned, while adding that the news will support the commercial uptake of Keytruda, while also giving Merck "a several month lead over BMY's Opdivo in obtaining regulatory approval in the front-line advanced melanoma setting (we anticipate BMY's CheckMate 067 study in this indication will end in 2H 2015)."

Full results from KEYNOTE-006 are scheduled to be presented on April 19, at the Plenary Session of the American Association for Cancer Research (AACR) meeting.

"EASL, ASCO and ADA also important upcoming meetings for MRK. Over the next 2-3 months, we should see also additional important pipeline data from MRK's HCV doublet at EASL (Apr 22-26) and Keytruda at ASCO (May 29-Jun 2)," Divan commented.

Moreover, the final results from the TECOS (Januvia cardiovascular outcomes study) are expected at the ADA meeting, scheduled from June 5 to 9, while headline data could precede this.

"We do not expect Januvia to show any overall benefit or harm in TECOS, but we sense many investors are waiting for those results to pass before investing in MRK shares given the risk with TECOS is skewed significantly to the downside," the report by Credit Suisse said.

"We remain Neutral rated on MRK shares, but acknowledge there are a series of catalysts over the next several months that could provide opportunities for upside," Divan added.

Latest Ratings for MRK

DateFirmActionFromTo
Oct 2016Bank of AmericaUpgradesNeutralBuy
Sep 2016JefferiesMaintainsHold
Sep 2016BarclaysMaintainsOverweight

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Posted-In: Credit SuisseAnalyst Color Reiteration Analyst Ratings

 

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