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On Tuesday, Goldman Sachs analysts reaffirmed their Buy rating for Merck (NSE:PROR) (NYSE: MRK) stock, maintaining a price target of $99.00. The decision follows Merck’s investor event at the American Society of Clinical Oncology (ASCO), where the company outlined its expansive oncology strategy. Currently trading at $76.25, near its 52-week low, InvestingPro analysis suggests Merck is undervalued, with a P/E ratio of 11.01 and an attractive dividend yield of 4.25%.
Merck’s management highlighted the company’s focus on immuno-oncology, tissue targeting, and precision molecular targeting. With a robust market capitalization of $191.47 billion and annual revenue of $63.92 billion, the company has substantial resources to support its ambitious strategy. The plan includes more than 60 registrational trials across 16 different assets, with pivotal readouts expected primarily in 2027 and 2028. A significant portion of Merck’s future commercial opportunity, estimated to exceed $25 billion by the mid-2030s, is projected to come from its antibody-drug conjugates (ADCs) programs.
The company emphasized its comprehensive development strategy for sac-TMT (TROP2 ADC), which it believes could offer first-in-class opportunities across various tumor types. Additionally, Merck provided insights into the PD1-L1xVEGF bispecific landscape and shared updates on its own program, which includes ongoing studies in China that will inform future strategies in the United States.
Merck’s management reiterated their commitment to business development and mergers and acquisitions, indicating a willingness to explore therapeutic areas outside of their traditional focus over the past decade. The company aims to expand its presence in new areas while continuing to advance its oncology pipeline.
Goldman Sachs analysts expressed interest in Merck’s growing oncology strategy but noted that further evidence and derisking events are necessary for these opportunities to be fully recognized by investors. InvestingPro data reveals the company maintains a "GREAT" financial health score of 3.21, with 8 additional exclusive insights available to subscribers, including detailed analysis of the company’s growth prospects and financial stability.
In other recent news, MoonLake Immunotherapeutics has been in the spotlight following reports of acquisition talks with Merck. Merck’s potential purchase of MoonLake for over $3 billion is part of its strategy to expand its drug portfolio, although initial offers were declined. Meanwhile, Merck has reported promising results from its Phase 1 KANDLELIT-001 study for the cancer drug MK-1084, with notable efficacy in treating KRAS G12C-mutant solid tumors. The company also announced positive outcomes from a clinical trial for zilovertamab vedotin, a treatment for diffuse large B-cell lymphoma, showing a 56.3% objective response rate. Shareholders of Merck recently approved the board and executive pay at the company’s annual meeting, while rejecting proposals related to human rights and tax transparency. Additionally, Merck and Daichii Sankyo have withdrawn their U.S. approval request for the lung cancer drug patritumab deruxtecan after its trial did not meet statistical significance in overall survival results. These developments reflect Merck’s ongoing efforts in drug development and corporate governance.
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