Goldman Confident In Merck's Keytruda

Goldman Sachs said evidence of Merck & Co., Inc. (NYSE: MRK)'s Keytruda benefit as a single agent continues to build as registrational monotherapy studies read out.

Merck's data presented at ASCO (American Society of Clinical Oncology) include updates on new tumors, existing tumors and combinations for Keytruda.

"Keytruda is being studied in 30 tumors with clinical activity demonstrated in 20 tumor types. Keytruda is also being studied in 100 combination trials," according to Goldman.

Analyst Jami Rubin said Keynote-021 was a highlight at ASCO, "with Keytruda/chemo combos in 1L non-small cell lung cancer (NSCLC) showing high response rates for cohorts that are being advanced into Ph 3 studies."

"The Keytruda/Alimta combo was especially intriguing, although Keynote-021 is a small Ph 2 study and we would like to see evidence of sustained response such as overall survival (OS) which will not be available until Ph 3 data become available," Rubin wrote in a note.

However, Rubin is "less clear on the company's positioning with regards to IO/IO combinations, which is a key area for advancing response rates, depth and durability of responses and activity in new tumor types previously unresponsive to immuno-oncology (IO)."

Rubin expects $4.4 billion sales of Keytruda in 2020, based on the strength of single agent therapy in melanoma, NSCLC and new indications that have already been filed with an August 9 PDUFA.

Rubin has Neutral rating on Merck, with a price target of $60.

At the time of writing, shares of Merck gained 0.07 percent to $57.21.