Citi is bullish on Merck , saying that the company’s drug pipeline is underappreciated by the market. Analyst Andrew Baum upgraded the pharmaceutical giant to buy from neutral. He also hiked his price target to $130, which implies 14% upside from Wednesday’s close price. The bank said Merck’s newly acquired portfolio of ADC , or antibody drug conjugate, from China-based Kelun-Biotech helps the company in “future-proofing” its oncology and hematology pipeline. The exclusive license and collaboration agreement for ADC development helps Merck in developing more cancer treatment drugs — and Citi thinks it could rival its competitors’ offerings. “Merck’s TROP2 ADC is a materially under-appreciated competitor to AZN/DS dato-DXd,” Baum wrote in a Thursday note, referring to AstraZeneca and Daiichi Sankyo’s lung cancer drug currently in development. Baum added that “the clinical data from early Chinese trials [of TROP2 ADC] looks broadly comparable or even superior to dato- DXd and superior to Gilead’s Trodelvy.” Citi anticipates further upside for Merck shares from the Inflation Reduction Act. The firm believes sotatercept, Merck’s pulmonary arterial hypertension treatment currently in late-stage development, “is the single largest beneficiary of the recently enacted IRA in the US.” To be sure, Baum noted a key downside risk to his valuation is if the ADC pipeline disappoints. Further risks include lower-than-anticipated value share capture by the company’s Melanoma treatment drug Keytruda, and a slowdown in its animal health business. Shares of the drug company were up more than 1% before the bell. Shares have risen just 2.5% in 2023, but have soared 32% over the past 12 months MRK 1Y mountain Merck & Co stock —CNBC’s Michael Bloom contributed to this report.
Source link
24World Media does not take any responsibility of the information you see on this page. The content this page contains is from independent third-party content provider. If you have any concerns regarding the content, please free to write us here: contact@24worldmedia.com
