HALISTER1: Merck Rises; Citi Says Market Undervaluing Keytruda, Lynparza

Merck Rises; Citi Says Market Undervaluing Keytruda, Lynparza

(Bloomberg) -- Merck rises 1.25% pre-market on 3k volume after Citi analyst Andrew Baum upgraded to buy from neutral, PT $72 from $65, saying the market is undervaluing the opportunity for cancer drugs Keytruda and Lynparza.
  • Says Keytruda enjoys "a healthy lead time" and MRK continues to aggressively pursue external opportunities
  • Raises 2025 Keytruda ests. to $15b from $9b
  • Says Lynparza has potential to exceed $8b/year; notes the market is underestimating its opportunity beyond ovarian and breast cancer
  • Says MRK will continue to dominate the treatment landscape for patients with PD-L1 expression; after 2020, anticipates other novel biomarkers like TMB to increasingly displace Keytruda as a predictive biomarker, potentially benefiting Bristol-Myers
  • MRK reports 3Q earnings on Oct. 27
  • Shares rose 7% this year while S&P 500 Health +21%
  • NOTE: Earlier, AstraZeneca, Merck Say FDA Grants Lynparza Snda Priority Review
    • Earlier, Merck’s Keytruda Saw 30-Month Overall Survival After Two Years
    • Oct. 12, Key Lung Cancer Data May Inform Pfizer M&A Motives: Guggenheim
To contact the reporter on this story: Tatiana Darie in New York at tdarie1@bloomberg.net To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net Steven Fromm

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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MRK US (Merck & Co Inc)

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Andrew Baum (Citigroup Global Markets Inc)

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