NEW YORK (AP) -- Shares of Merck extended its recent gains Monday after a Morgan Stanley analyst upgraded the stock, praising the drugmaker's direction and offering a far more optimistic forecast for an experimental cancer drug the company is developing.
THE OPINION: Analyst David Risinger raised his rating two notches, to "Overweight" from "Underweight." He also set a price target of $60 per share. Risinger said he expects the company to report positive data from a series of clinical trials of its drug MK-3475 this year and raised his forecast for sales of the drug to $6.1 billion in 2020, above his previous estimate of $3.4 billion.
Merck & Co. says it is running 10 clinical trials of MK-3475, or lambrolizumab, which is designed to use the immune system to fight cancer. The Whitehouse Station, N.J., company said in January that it has started filing for approval of MK-3475 as a treatment for advanced melanoma. It expects to complete the filing in the first half of 2014. Merck is studying the drug as a treatment for several different types of cancers, including malignancies of the bladder, colon, head and neck, lung, and breast.
Risinger said the company started the filing more than a year earlier than he expected. He added that the company is taking other steps to improve its outlook like cutting expenses, making changes to its research and development operations, and looking at strategic options.
THE STOCK: Merck shares rose $1.22, or 2.3 percent, to $53.20 in afternoon trading. The stock has been trading around its highest prices in six years and it peaked at $54.10 on Monday. It last traded at that level on Jan. 18, 2008.
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