- The list of cheerleaders for Merck (MRK +2.2%) is getting longer as more analysts are extolling the market opportunity of cancer med KEYTRUDA (pembrolizumab) combined with chemotherapy. The company's U.S. marketing application for the treatment of lung cancer could be approved in May, to the detriment of competitors Roche (OTCQX:RHHBY), AstraZeneca (AZN +0.1%) and Bristol-Myers Squibb (BMY -0.1%).
- Morgan Stanley's David Risinger has upgraded the stock to Overweight and boosted the fair value target to $71 (13% upside) from $65 citing the expanded market the combo can access (85% of first-line lung cancer cases) compared to KEYTRUDA alone (~20%). He has raised his KEYTRUDA sales estimate to $10.6B in 2020 from $7.3B.
- Guggenheim's Tony Butler has also upgraded Merck to Buy with a $70 (11% upside) price target. He says KEYTRUDA sales could hit almost $3.7B this year if the combo is approved on time compared to his current $3.1B estimate. 2018 could be even better at almost $5.3B (versus ~$4.8 now).
- Piper's Richard Purkiss joins in with an Overweight rating and $72 (14% upside) price target based on Merck's first-to-file position.
- Source: Bloomberg