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Goldman Sachs Upgrades Merck On Cancer, HIV, COVID-19 Pipeline

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Goldman Sachs Upgrades Merck On Cancer, HIV, COVID-19 Pipeline

Merck & Co., Inc’s (NYSE: MRK) internal pipeline seems underappreciated by the market, and the loss of exclusivity of its cancer immunology drug Keytruda appears priced in, according to Goldman Sachs.

The Merck Analyst: Terence Flynn upgraded Merck from Neutral to Buy and raised the price target from $91 to $105.

The Merck Thesis: The market seems to be underappreciating a potential opportunity of between $13 billion and $18 billion in pipeline assets, Flynn said in the Monday upgrade note. (See his track record here.)

Merck has developed several earlier stage cancer assets that can be used in combination with Keytruda or in patients who do not respond to Keytruda, the analyst said, adding that Phase I and II data may emerge at the ESMO conference in September and over the next year.

Phase II and III trials are underway for Islatravir for both treatment and prevention of HIV. Phase II prevention data is expected later this year, Flynn said. Merck may partner with another longer-acting drug “to create a long-acting injectable formulation that could represent the next innovation in the HIV market,” the analyst said. 

The company has a COVID-19 treatment in Phase II and vaccine candidates that could enter clinical trials in the second half of 2020, according to Goldman Sachs. 

MRK Price Action: Shares of Merck were up 4.27% at $83.67 at last check Monday. 

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Latest Ratings for MRK

DateFirmActionFromTo
Aug 2020SVB LeerinkMaintainsOutperform
Aug 2020Goldman SachsUpgradesNeutralBuy
Jun 2020Wolfe ResearchDowngradesOutperformPeer Perform

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