Market Overview

Citi Doesn't See Merck's Lung Cancer Success Lasting Long

Citi Doesn't See Merck's Lung Cancer Success Lasting Long
Related MRK
OncoSec Shares Spike 17% After New Data Defended
White House 'Shenanigans' Represent A Buying Opportunity: Cramer
E&G Advisors, LP Buys BlackRock Multi-Sector Income Trust, AllianzGI Convertible & ... (GuruFocus)

Bristol-Myers Squibb Co (NYSE: BMY) unexpectedly announced the failure of the CheckMate-026 trial in non-small cell lung cancer [NSCLC]. While this development means that Merck & Co., Inc. (NYSE: MRK) would likely dominate the 1st line NSCLC market for patients with PDL1 high expressing tumors in the near term, the success could be short-lived, Citi's Andrew Baum said in a report.

Analyst Andrew Baum maintained a Neutral rating on Merck, with a price target of $65. He added that the new EPS estimates for 2017 and 2018, at $3.81 and $4.39, were now 5 percent higher than the pre-Friday consensus expectations.

Short-Lived Success

Baum commented that Merck's EPS gains would likely be "relatively short lived" due to the expected positive data from AstraZeneca Plc's (NYSE: AZN) MYSTIC trial, scheduled for March 2017, and Bristol-Myers Squibb's CHECKMATE 227 trial, expected in August 2017. On account of these, the latest development would have only a modest impact on Merck's long-term EPS.

Related Link: SITC Launches New Initiative Non-Small Cell Lung Cancer Immunotherapy: Advancing Hope™

"The market share for immuneoncology sponsors in 1st line NSCLC was always likely to be determined by the relative benefits to be shown with PDx CTLA4 and PDx chemotherapy combinations in ongoing phase III trials. Nothing has changed in this regard. We continue to strongly favour PDx CTLA4 based combinations," the analyst wrote.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for MRK

Oct 2017CitigroupUpgradesNeutralBuy
Oct 2017BMO CapitalMaintainsOutperform
Sep 2017Credit SuisseMaintainsOutperform

View More Analyst Ratings for MRK
View the Latest Analyst Ratings

Posted-In: Andrew Baum CitiAnalyst Color Reiteration Analyst Ratings Best of Benzinga


Related Articles (AZN + BMY)

View Comments and Join the Discussion!

Partner Center