Market Overview

Bank Of America On Merck: 'MAGNIF-TECOS!'


In a report published Tuesday, Bank of America analyst Colin Bristow commented on Merck & Co., Inc. (NYSE: MRK)'s announcement of top-line results for the TECOS trial, noting that the study met its primary endpoint of non-inferiority versus placebo for the composite CV endpoint.

The analyst stated the TECOS trial had become a "source of concern" based on the results of two other CV outcomes studies for DPP4 inhibitors (Onglyza and Nesina) and the fact that Merck's Januvia is a market leader. The FDA previously held an Advisory Committee meeting to discuss the CV outcomes data due to an increase in hospitalization rates in each of the respective CV outcomes. At the conclusion of the advisory committee sessions, the panel members voted in support of each of the products having acceptable CV safety profiles but also voted in favor of updated drug labels to better reflect the potential increased risk of heart failure.

See Also: Merck Beats Q1 Estimates, Shares Rise

Bristow said Merck's study demonstrated that there was no increase in hospitalization for heat failure in the Januvia group versus a placebo, marking the satisfaction of a "key concern" for the trial. Moreover, the update removes a "significant overhang" for the company and potentially presents an upside case where Januvia could have a differentiated label versus the competition which will further strengthen its position as a market leader.

Bottom line, Bristow noted that a full presentation of the TECOS data will be delivered at the American Diabetes Association meeting on June 8. In the meantime, the analyst stated the top-line results represents a "significant positive" for Merck and shares are expected to react accordingly.

Shares remain Buy rated with an unchanged $65 price target.

Latest Ratings for MRK

Aug 2019Initiates Coverage OnOutperform
Jul 2019Initiates Coverage OnBuy
Jun 2019MaintainsOverweight

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Posted-In: American Diabetes Association Colin Bristow DPP4 Januvia merck NesinaAnalyst Color Analyst Ratings


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