Merck Analyst Raises Price Target Ahead Of Upcoming Antiviral Trial Results, Presentation
Shares of catalyst-rich pharma Merck & Co., Inc. (NYSE: MRK) are poised for further upside, according to an analyst at SVB Leerink.
The Merck Analyst: Daina Graybosch maintained an Outperform rating on Merck and increased the price target from $95 to $100.
The Merck Thesis: Merck shares are likely to move in the near-term, as results from a pair of Phase 2 trials of the MK-4482 antiviral in patients with COVID-19 is scheduled to be released in the coming weeks, Graybosch said in a Tuesday note. (See her track record here.)
MK-4482, which was acquired from Ridgeback Therapeutics in July, could become the third therapy approved for emergency use after Gilead Sciences, Inc.'s (NASDAQ: GILD) remdesivir and convalescent plasma, the analyst said.
MK-4482 has the potential for positive differentiation in stage of use and route of administration, as well as broader antiviral activity, she said.
Although MK-4482 is likely to have only a small impact on Merck's valuation — potentially around $3-$4 per share — positive news could bring more attention and investors to Merck's story, Graybosch said.
The pharma's presentation of vibostolimab and Keytruda data in non-small cell lung cancer at the European Society of Medical Oncology on Sept. 17 could signal its competitive stance relative to Roche Holdings AG Basel ADR Common Stock (OTCQX: RHHBY) unit Genentech's tiragolumab + Tecentriq combination, the analyst said.
"This is another good example of life-cycle management possible with next-generation combination on top of Keytruda that could protect the franchise from biosimilar risk post-2028."
SVB Leerink's price target increase reflects the updated potential for vibostolimab and the continued competitiveness of Keytruda, especially in NSCLC, in the face of new entrants, Graybosch said.
Factoring in a less-than-feared impact of COVID-19 on Merck's operations, SVB Leerink increased its estimates for several other product lines, including Bridion and the vaccine business.
MRK Price Action: Merck shares were down 0.14% at $85.33 at the time of publication Tuesday.
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Latest Ratings for MRK
Aug 2020 | SVB Leerink | Maintains | Outperform | |
Aug 2020 | Goldman Sachs | Upgrades | Neutral | Buy |
Jun 2020 | Wolfe Research | Downgrades | Outperform | Peer Perform |
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