Tuesday, May 31, 2011

Yale's Harlan Krumholz -- On Comparative Effectiveness -- In Forbes


I'll not try to summarize it -- trust me -- you should read it all, with Merck's Zetia drug, as well as its tredaptive candidate in mind. Forbes was lucky to get this piece:

. . . .Abbott should be commended for supporting the study and seeking truth about the effect of their drug on patient outcomes. No pharmaceutical company should want to sell a product that does not help patients. Abbott demonstrated their values by supporting a test of a billion dollar drug whose sales were based on an assumption of benefit. Moreover, Abbott did not criticize the study.

NIH oversee the study was also important. The NIH has impeccable research credentials and their policies and procedures protect the scientific integrity and transparency of the process. Unfortunately many industry trials have been tainted by concerns of misbehavior in the handling of data and the publication process. The credibility of this study was assured by its conduct under the auspices of the NIH. . . .

Do go read it all. It is pitch perfect -- and that last bolded bit applies to the Vytorin study called "ENHANCE". We all know how that turned out (but if you don't -- click the word ENHANCE, in that last sentence).

Sunday, May 29, 2011

Dr. Steve Nissen, Cardiologist, Via PBS Online Newshour -- AIM-HIGH & HDL


Once again, this comes courtesy of Marilyn Mann, a friend and frequent commenter (in a five minute, 23 second interview):

Watch the full episode. See more PBS NewsHour.


. . . .This is a shocker to much of the medical community. . . but maybe we shouldn't have been quite so surprised. . . we need to develop drugs that show improvements in clinical outcomes, not just laboratory results. . . . drugs that make biochemical measures better, don't always make people better. . . .

Friday, May 27, 2011

An Interesting (If Derivative) View Of Zetia® -- On Abbott's Niaspan® Outcome


This comes from the keyboard of Marilyn Mann -- a very cogent (but anonymous) regular commenter (some earlier background):

. . . .Here are my thoughts, and this seems relevant to Merck because they have a niacin drug in development.

In ARBITER 6-HALTS, niacin was superior to ezetimibe, when added to a statin, but it was unclear if ezetimibe is harmful, niacin is beneficial, or both. The results in AIM-HIGH, showing no benefit for niacin when added to a statin, make it more likely that the ARBITER 6-HALTS results mean that ezetimibe is harmful. . . .

I've seen other comments -- to suggest that Merck's tredaptive candidate may have a tougher road, now due to the Abbott announcement, this week -- but this is the first suggesting that Zetia® may ultimately be found to be affirmatively harmful.

We'll keep an eye on this.

VIDEO: CEO Ken Frazier Adroitly Handles Hectoring Wingnuts -- At Annual Meeting


I've held an internal debate, and hesitated all week -- about whether to even link to these wingnut YouTube clips -- of a right wing organization's General Counsel hectoring the New Merck CEO, at this week's annual meeting. On balance though, I think this sort of nonsense needs more sunshine, not less -- it speaks for itself toward the end of the presser (and clip no. 2). [Mr. Frazier even took the opportunity to harken back to the George Merck bon mot, at right! Well-played.]

Moreover, I think Frazier's answers are pitch-perfect. On the one side, the heckling speakers criticize Merck for supporting health care reform in 2010, as bad for shareholders (a case that's plainly not been proven). Almost comically, in the same breath, their presser criticizes the Bush era 2003 expansion of the prescription drug benefit -- even though that was plainly good for Merck shareholder interests. So -- the transparently political (and thus largely irrelevant nature) of their remarks is made plain -- do watch each; and be thankful that Merck has such an unflappable new CEO:





And finally, longer term shareholder responds -- and rises to defend Merck:



And, from the wingnut organization's presser, then:
. . . .National Center for Public Policy Research General Counsel Justin Danhof asked Frazier if Merck considered the "reputational risk" to Merck before supporting ObamaCare in light of a National Center for Public Policy Research/FreedomWorks poll showing a substantial drop in conservative attitudes toward companies lobbying for the adoption of ObamaCare(!). . .

[In response,] Frazier. . . relat[ed] an anecdote about Democrats objecting to Merck's support of the Republican leadership's expansion of Medicare Part D, the "prescription drug benefit" bill, in 2003. Conservative organizations ardently opposed that expansion. . . .

Of course, if these guys were genuinely interested in Merck's shareholder value (and not just grand-standing for some silly political point), they'd have applauded the 2003, and 2010 federal legislative packages. Wild -- these guys have way too much time on their hands.

Merck To Webcast At Bernstein On June 1, 2011


We'll tune in, at 9 AM EDT next Wednesday, and live blog some of it -- if anything material is said. You may listen in here, too.

. . . .Merck & Co Inc at Sanford C. Bernstein & Co. Strategic Decisions Conference

Wednesday, June 1, 2011 9:00 a.m. ET

New York, NY. . . .



Wednesday, May 25, 2011

Link To Yesterday Afternoon's Merck 2011 Annual Meeting Video. . .


Nothing too terribly newsworthy was disclosed, but here is the Windows Media streaming feed link, from yesterday's annual meeting of shareholders.

[CEO Ken Frazier did -- surprisingly -- use a slide with clip art of the Time magazine cover which quotes George Merck, as above, on my masthead. It would be fabulous if Merck got back to those roots, more explicitly, and zealously.]

Enjoy -- it runs about an hour and 20 minutes.

Monday, May 23, 2011

He's A Seller At $37? Raul Kohan: New Merck's Legacy Schering-Plough Executive


I simply must note this -- it is fascinating that Raul Kohan, now head of Merck's Animal Health unit (and one of the very few remaining legacy Schering-Plough senior executives), has exercised and sold some of his stock options, at least three years early, and (apparently) in each case, whenever the NYSE common stock price quoted for Merck hovers around $37, for more than a few days.

See his May 18, 2011 SEC filed Form 4; his December 31, 2010 Form 4 (at around $36); his February 26, 2010 Form 4 and his Form 4 when the reverse merger became effective on November 3, 2009.

The upshot? I think it fair to infer that he sees Merck as "fully-valued" at any price in the vicinity of $37. So do I (for going on two years now -- explanation of the graphic is under that l;ink). That last transaction was within a day or two of when Merck heard that its Victrelis™ (boceprevir; a Hep C next-gen combo-treatment) had cleared FDA.

And still he was a net seller; pulling the trigger on his options around three years early (prior to expiration), in each case. Fascinating:

. . . .May 13, 2011 – Merck (known as MSD outside the United States and Canada) announced today that the U.S. Food and Drug Administration (FDA) has approved Victrelis™. . .

I'd take that to heart. Raul's always been a smart investing operator.

Vertex To Offer Assistance For $49,200 Incivek® 12-Week Hep C Regimen


Many pundits are now reporting that Incivek® will be priced at $49,200 per 12 week dosing regimen. [As the market closed, Vertex filed an SEC Form 8-K -- Current Report, on the same topic.]

Smartly -- for its part, Vertex has already announced a few generous patient assistance programs -- one of which applies regardless of US household income level, viz:

. . . .Free Medicine Program: Vertex gives Incivek® for free to people who do not have insurance and have an annual household income of $100,000 or less; and Co-Pay Support: Vertex covers co-pay or co-insurance costs up to 20% of the total cost of Incivek for people who have private insurance plans that cover Incivek, regardless of their household income. . . .

So -- the premium price is all Vertex. Merck has offered a discount on price, even below its relatively lower efficacy, in hopes of "buying" lower-income (and lower insurance level) market share. We shall see, but this Vertex assistance program is likely to blunt that move. Now, let the games begin!

[More seriously, it is an important moment in history when we can announce the "cure" of a previously incurable condition. Today marks that day. Heady stuff, for the approximately 3 million known Hep C sufferers in the US (and another million or so who are antibody positive) -- and perhaps 170 to 200 million sufferers in total, around the globe, today. And that US antibody-positive figure is likely to triple over time, once routine testing becomes more commonplace (not just upon the occasion a potential blood donation, or blood infection suspicions) -- with a cure in hand, doctors will be more likely to test for these markers of a Hep C infection.]

FDA Approves Vertex's Hep C Cure -- Incivek® -- Let The (Pricing) Battle Begin!


Right on schedule -- the "best in class" Hep C cure (commonly known as Telaprevir, but now branded by Vertex Pharma as Incivek®) has been approved by the full FDA, pre-NASDAQ-market open, this morning:

. . . .The safety and effectiveness of Incivek was evaluated in three phase 3 clinical trials with about 2,250 adult patients who were previously untreated, or who had received prior therapy. In all studies patients also received the drug with standard of care. In previously untreated patients, 79 percent of those receiving Incivek experienced a sustained virologic response (i.e. the infection was no longer detected in the blood 24 weeks after stopping treatment) compared to standard treatment alone.

The sustained virologic response for patients treated with Incivek across all studies, and across all patient groups, was between 20 and 45 percent higher than current standard of care.

The studies indicate that treatment with Incivek can be shortened from 48 weeks to 24 weeks in most patients. Sixty percent of previously untreated patients achieved an early response and received only 24 weeks of treatment (compared to the standard of care of 48 weeks). The sustained virologic response for these patients was 90 percent.

When a person achieves a sustained virologic response after completing treatment, this suggests that the hepatitis C infection has been cured. . . .

So, will Vertex price Incivek above that set be Merck for Victrelis? We'll know in moments.

Tuesday, May 17, 2011

Merck To Close Inspire's Raleigh, NC HQ; Layoffs Begin -- Including CEO


Already the Inspire CEO, Adrian Adams, has been let go.

As Whitehouse Station absorbs this $430 million acquisition, as many as 115 Inspire executives and staffers may be put out of work, either immediately or in the next few months, according to local North Carolina papers (H/T Pharmalot):

. . . .Merck, which on Monday completed its $430 million acquisition of Inspire Pharmaceuticals, has decided to shut down Inspire's headquarters operation in Raleigh.

The move, which is expected to happen before the end of the year, definitely will mean job losses - but it's not clear how many. "We expect some employees will be separated," Merck spokesman Ian McConnell said late Monday. . . .

About 175 Inspire workers, including an estimated 60 in Raleigh, became Merck employees Monday. As a result of the sale, which was announced in February, Inspire shares are no longer traded on Nasdaq.

The job cuts will include top executives. "Several senior leaders are departing in May, and others will depart on dates to be determined as we go through the process of integrating the two organizations," McConnell said. . . .

[Remember that -- as we earlier reported -- Inspire has a line that competes with Fred Hassan's Bausch + Lomb offerings -- see here.] We will keep an eye on the Inspire portfolio, now part of the Durham, NC complex of candidates at Merck.

Monday, May 16, 2011

And So, The Next-Gen Hep C Sales (And Cures) Race Begins, In Earnest. . .


Here's Matt Herper's take -- over at Forbes -- on last Friday night's FDA approval:

. . . .In clinical trials, [boceprevir] cured more than 60% of previously untreated patients when added to the current standard treatments, compared to 40% who got the standard treatments alone. Goldman Sachs says it could be the first of a new group of drugs that increases total sales of hepatitis C drugs from $3 billion to as much as $10 billion.

But many on Wall Street have been giving the inside track to a rival drug, Incivek from Vertex Pharmaceuticals. Goldman’s analysts, for instance, expect Incivek to capture 75% of the market. An FDA decision on Incivek is expected by May 23. . . .

Merck is trying to take advantage of its [momentary timing] lead. Merck spokeswoman Pamela Eisele says that Victrelis will be available in pharmacies within a week, and that Merck’s sales representatives will begin marketing it within that time. “We’re fully dedicated to introducing Victrelis to the market,” she says.

The drug will cost $1,100 a week wholesale, or $35,200 for a 32-week treatment. . . .

Wall Street expects Incivek to be the big winner, not Victrelis. As many as 79% of previously untreated patients on Incivek achieved undetectable viral levels, compared to 49% on the standard regimen. And Vertex ran a trial in sicker patients than Merck, showing that 65% of treatment experience patients could be helped compared to 17% on the standard of care. . . .

Do stay tuned -- $35,000 a year. Now, where will Vertex set its price point?

If it were to come in with even a marginally-lower price point, and these arguably clearly superior efficacy figures -- it would be hard to see Merck getting more than 20 percent of the US market, longer term -- once the launch push (prescriiber promotions) are flushed from the US sales data stream. That would be in about six months, or around Thanksgiving 2011.

Sincere hat tip to Salmon, here!

Thursday, May 12, 2011

Vertex Captures Ex-Merck Vaccine Head -- To Its Board, As Telaprevir Readies For Launch


I missed her nomination in the SEC-filed Vertex proxy statement (her one year non-compete must be up!) -- but here it is, just off the wires:

. . . .[Vertex common shareholders today] elected nominee Margaret C. McGlynn to the company’s board of directors. . . . Ms. McGlynn most recently served as President, Global Vaccines and Infectious Diseases, for Merck & Co., Inc. In her nearly three decades at Merck, Ms. McGlynn held a number of leadership roles focused on marketing, sales and managed care activities for Merck’s portfolio of medicines. She is a member of the National Industrial Advisory Committee at the University at Buffalo School of Pharmacy and Pharmaceutical Sciences and holds a B.S. in Pharmacy and an M.B.A. in Marketing from the State University of New York at Buffalo. The addition of Ms. McGlynn brings the number of Vertex board members to eight.

"Ms. McGlynn will provide our Board with invaluable commercial expertise as we await the approval of INCIVEK for people with hepatitis C," said Matthew Emmens, Vertex's Chairman, President and Chief Executive Officer. "I welcome Margie to our Board and look forward to her contributions at this exciting time for our company. . . ."

Fascinating -- I wonder if this will presage the relative commercial advantage of Vertex's offering, over legacy Schering-Plough (now New Merck), in next gen Hep C cures, come May 28, 2011, or shortly thereafter. By the way, Goldman Sachs is advocating buying calls on Vertex at Monday's $54.40 price -- speculating on a takeover. This morning, VRTX is trading around $57.

Wednesday, May 11, 2011

When Big Pharma Talks About "Reinvigorating Innovation". . . .


A long-time McKinsey & Co. guru has written on a theory of his, called "creative destruction" -- of corporate sacred cows. I may be a little off-kilter, but it seemed to resonate with me, as I thought about Merck -- and Pfizer, especially, of late.

That is to say that Pfizer has already set out -- down this "destruction" part of the path -- agreeing to shed businesses that are non-core. Do go read it all, in Forbes online edition, but here is a bite of it:

. . . .Q.: So how can managers improve their company’s ability to innovate? Are there rules of thumb for experimenting with budgets, or for testing new markets?

A.: Many nostrums have been out there for years. . . . [but] I’m convinced that for an existing company to innovate, they must first make the decision to get rid of something. Unless you get rid of it, it will always be more a more compelling argument to improve the old rather than commit to the new. That small decision over time adds up to a total deflection, and you are never as motivated to innovate as the unencumbered new entrant. I think this is enormously important.

Q.: What are some good examples of this?

A.: I spent a lot of time at a large healthcare company that had products in many fields. The company was doing upwards of $50 billion in annual sales. Yet for every 2 companies they bought, they had to get rid of 1 legacy business. That legacy business probably had 3 times the sales of the combined companies they purchased, and because of that they were always hungry to do something new. Creative destruction was the center of their management notion – they were going to get rid of things as a precursor to innovate. If you get rid of things, I am convinced that innovation is much easier.

On the other end of the spectrum, I ask: How did Polaroid and Kodak fail? It wasn’t that they didn’t see digital photography coming. They just couldn’t believe that the printed image was going to leave, and couldn’t pull the trigger. Could they have? Did they have the expertise? Yes. But they couldn’t get out. It wasn’t that they weren’t innovative – they were incredibly innovative, but they couldn’t pull the trigger on the destruction side. I see destruction as a precursor to innovation for an existing corporation. . . .

Do go read it all. Very provocative, as applied to big pharma's current malaise.

Tuesday, May 10, 2011

Former Schering-Plough Animal Health GM In Canada Lands At Avivagen Canada


Avivagen, a new Canadian animal health company and wholly-owned subsidiary of Chemaphor, reports it has appointed Charlotte Foster as Director of Marketing and Sales.

Foster has extensive experience and is well known within the Canadian animal health industry. Although he was with Pfizer Animal Health Canada, that was apparently a temporary home after the Schering-Plough bust-up. Viz -- from the Canadian AccessWire story:

. . . .[Charlotte] Foster was General Manager for Schering-Plough Animal Health Canada for 15 years and was the Canadian Integration Lead as the result of Schering-Plough’s worldwide acquisition of Organon Bioscience and Intervet Corporation. Foster was also marketing manager with Merck Agvet. Foster is a past chair of the Canadian Animal Health Institute.

"Charlotte has many years of experience as a senior executive and General Manager at the top animal health firms in Canada," comments Dave Hankinson, CEO of Avivagen Animal Health. "Her leadership and her knowledge of the veterinary channel will be invaluable to Avivagen to help us in our efforts to increase market penetration of OximunolTM Chewable Tablets, VetStem RC Regenerative Cell Therapy and future products. . . ."

Scattered to the four winds, it seems. . .

The Pink Sheet Daily: Zetia® Government Reimbursement Level To Be Reduced In U.K.; Germany, Next?


If you have a paid-up subscription, you will be able to read the whole article for yourself, but The Pink Sheet Daily is reporting that, for the first time, New Merck's Zetia® (ezetimibe), half of the Vytorin® combo-pill, is being reviewed for a price downgrade in parts of the EU.

Any unfavorable final conclusion would harbor an erosion in the EU sales revenue New Merck reports for the pill. By way of recent trend analysis, during Q1 2011, Zetia sales grew at a 12 percent clip (net of currency effect) to just over $480 million in the quarter. That will certainly not persist, and may even show a sequential decline, if the drug loses its highly-favored reimbursement rate in Britain and Germany -- two of the biggest non-US markets for the cholesterol management drug franchise. [If you want more background, click the legacy graphic, at right.]

More specifically, the article reports that NICE is reevaluating ezetimibe this summer for the first time since 2007, and the German equivalent to NICE gave Zetia a thumbs down in a preliminary report dated May 3, 2011. If the final report confirms that, reimbursement will be cut for ezetimibe in Germany, as well.

The EU cholesterol management franchise revenue downdraft, when/if it comes, will appear, in fullest force, in New Merck's Q3 2011 results. We will keep you posted. [With a very-sincere H/T to our anonymous friends.]

Monday, May 9, 2011

California Chromium 6 Groundwater Case Update: Merck's Just-Filed SEC Form 10-Q


After some out of state family time (off the grid), here is one substantive update: Merck has filed its first quarter 2011 Form 10-Q with the SEC this morning.

Do read the litigation note to the financials closely (especially page 22 and following), as Merck discloses that it will likely need to add to its legal reserves for the remaining Vioxx® matters, and runs down an update on the Fosamax® jaw death, and femur fracture suits (each of which I'll cover separately tonight, if time permits) -- but I found the Chromium 6 suit recap most interesting (background on the initial verdict against Merck, here), thus:

. . . .approximately 2,200 plaintiffs have filed an amended complaint against Old Merck and 12 other defendants in U.S. District Court, Eastern District of California asserting claims under the Clean Water Act, the Resource Conservation and Recovery Act, as well as negligence and nuisance. The suit seeks damages for personal injury, diminution of property value, medical monitoring and other alleged real and personal property damage associated with groundwater and soil contamination found at the site of a former Old Merck subsidiary in Merced, California. Certain of the other defendants in this suit have settled with plaintiffs regarding some or all aspects of plaintiffs’ claims. This lawsuit is proceeding in a phased manner.

A jury trial commenced in February 2011 during which a jury was asked to make certain factual findings regarding whether contamination moved off-site to any areas where plaintiffs could have been exposed to such contamination and, if so, when, where and in what amounts. Defendants in this “Phase 1” trial include Old Merck and three of the other original 12 defendants. On March 31, 2011, the Phase 1 jury returned a mixed verdict, finding in favor of Old Merck and the other defendants as to some, but not all, of plaintiffs’ claims. . . . The jury found. . . that plaintiffs could have been exposed to contamination via air emissions prior to 1994, as well as via surface water in the form of storm drainage channeled into an adjacent irrigation canal, including during a flood in April 2006. Old Merck will file motions requesting that the court set aside those portions of the jury’s verdict that are adverse to Old Merck on the basis that those portions of the verdict are unsupported by the evidence and contrary to established legal principles. If necessary, Old Merck will seek to appeal, prior to commencement of any later phases of the litigation, those portions of the jury’s verdict adverse to Old Merck that are not set aside by the trial court. In the event the Phase 1 jury’s findings in favor of plaintiffs are not set aside by the trial court or on appeal, it is anticipated that later phases of the litigation would be required to address issues related to liability, causation and damages related to specific plaintiffs. . . .

The bolded bit is a highly unusual bit of public posturing -- bordering on public bullying (in my opinion), when one is the world's second largest public drugmaker. Merck is openly warning the very-able federal trial judge that it will seek to reverse any ruling entered against it -- without even so much as a nod to the idea that the court might actually "get parts of it right" -- on the law, and facts, as found by the jury. Astonishing.

Yes, this is very, very brassy -- and almost never seen in SEC-filed documents by well-seasoned issuers. Do stay tuned.

Wednesday, May 4, 2011

First $13.8 Million Of Mass. Proventil® Pricing Fraud Verdict Entered; More To Come


Late last week, Judge Saris, in a federal District Courtroom in Boston, signed an order entering about $13.8 million of the pending pricing fraud verdict (plus attorneys' fees -- yet to come) essentially against New Merck, as successor to Warrick Pharmaceuticals. Warrick is a former Schering-Plough subsidiary, and current subsidiary of the re-organized and renamed Schering-Plough (oddly enough, now called "Merck"). Warrick has been found liable for overcharging state payers for albuterol, which is the chemical name for Proventil® -- an inhaled-drug that is now generic. Here is the full PDF file of the April 27, 2011 order (some 38 pages).

Still pending are all the punitive damages calculations -- we'll keep you posted. A bit from the order, then:

. . . .Warrick was incorporated as a wholly-owned subsidiary of Schering. Its function was to act a generic pharmaceutical manufacturer. Warrick was designed to “[p]rotect and extend the life cycle of [Schering’s] branded products as patents expire” and “create leverage in our Managed Care business,” through bundling brand and generic products. . . .

During the mid-1990s, Schering’s largest-selling drug was Proventil, a brand-name version of the drug albuterol that is used to treat asthma and other respiratory diseases. Patent protection for Proventil expired in late 1995. In order to prevent deterioration of albuterol sales after the launch of generic competition, Schering set up Warrick Pharmaceuticals to sell generic versions of Proventil. At issue in this case are three Warrick drugs: Albuterol Sulfate (.083%), Albuterol Sulfate (.5%), and an Albuterol inhaler (90 mcg). . . .

Warrick expected that this initial launch price would drop and provided “price protection” for its wholesale and retail pharmacy customers, meaning that if they purchased albuterol at $16.06 per unit and the price later fell, they would receive a rebate. Within six months, the price for the albuterol inhaler had fallen to $12 for all major wholesalers, and by May 2000 the price fell to $5.00 or less. Warrick did not report these price changes to MassHealth or to First DataBank. . . .

On November 3, 2009, Schering-Plough merged with Merck & Co., Inc. to form the world’s second-largest pharmaceutical company. . . .

So this is now Ken Frazier's inherited mess. Fabulous; thanks again, Fred.

Tuesday, May 3, 2011

Vertex Brands Its Telaprevir As "Incivek®"; Confirms It's "Ready To Launch"


In addition, Vertex expects that it will be approved by FDA before the end of May 2011. Vertex management also confirmed that it is now fully ready for a roll-out, and that a significant number of patients have delayed starting any therapy -- until Incivek is available per the AP:

". . . .Our progress in recent months with both INCIVEK for people with hepatitis C and VX-770 for people with cystic fibrosis marks a significant step toward Vertex becoming a company capable of discovering, developing and launching innovative new medicines for serious diseases," said Matthew Emmens, Chairman, President and Chief Executive Officer of Vertex.

Gross margins grew 11.4 percentage points to 96.4%. The growth seemed to be driven by increased revenue, as the figure rose more than threefold from the year earlier quarter while costs fell 20.8%.

Over the last five quarters, revenue has increased 75.3% on average year over year. The biggest increase came in the most recent quarter, when revenue rose more than threefold from the year earlier quarter. . . .


CFO Peter Kellogg -- Live at Deutsche Bank Conference, This Mid-day. . .


Go ahead and catch the streaming media feed, by registering here -- I am unlikely to be free during the midday, to liveblog it. So, you'll have to listen in on your own:

. . . .Peter N. Kellogg, Merck's chief financial officer, is scheduled to present at the Deutsche Bank 36th Annual Healthcare Conference in Boston on May 3 at 11:20 a.m. EDT. Investors, analysts, members of the media and the general public are invited to listen in. . . . An archive of the presentation will be available at the same location. . . .

My guess? -- Very little new, of material import, likely to be learned; and so, look for the bank's analyst, Barbara Ryan, to ask some softball questions.

JP Morgan Goes "Back In Time" -- On "New" Merck Price Target


So JP Morgan has moved Merck's 12 month stock price target up to. . . where JP Morgan had it in January of 2010 (per a PDF transcript of the 2010 JP Morgan Healthcare conference) -- from $42 to $44. Yawn. This isn't really any news at all, but it is courtesy of Benzinga:

. . . .We are increasing our MRK sales and EPS estimates following strong 1Q/11 results. Our new estimates are toward the high end of the company's 2011 guidance range. We are raising our PT by $2 to $44.

J.P. Morgan maintains Overweight on Merck. . . .

Uh-huh, Sure it does -- it also has more than ample reason to curry favor, as I've repeatedly pointed out in the past.

Sunday, May 1, 2011

Merck, Crystal Balling: What Are The Near Term Odds, For a Deal Of Size


I guess now (contra to my sense, a month ago, when I first ginned up the graphic at right!) I'd put a large deal in the "not-likely" category, for the balance of 2011. 2012 may well be a different story, however -- as the looming Q4 2011 $3.8 billion patent fall-off really takes hold at New Merck.

And so, here is a great question, from our anonymous commenting audience:

. . . .Now that the dust is starting to settle a bit more what do you think is next for Merck? Remicade issue has been resolved; Animal Health is to stay in house. Obviously, you'd prefer Merck to invest some cash in growth rather than purchase stock. What do you think makes sense for Ken Frazier?? Finish bust up of Schering by selling consumer business? Follow Pfizer's lead and bust New Merck apart??

April 27, 2011 10:14 p.m.. . . .

Then here is my answer:
. . . .I think I said somewhere that I didn't expect any Earth-shattering news from Whitehouse Station, on any of its business lines, so long as Q1 2011 earnings were on track.

And they were, this past Friday.

I see a fair amount of small-scale pruning still to be done by Frazier, business by business -- but no massive moves, near term.

He has reaffirmed that Consumer Halth is a core business, at New Merck, but in the same breath would not rule out a partner -- so, if there is a deal of size yet in 2011, it might be a co-venture in Consumer Health.

It seems that most or all of Animal Health might also be partnered up, or spun-off -- in 2012 or beyond.

Relatedly, Q1 2011 earnings were actually in-line, not a "beat" (as claimed by Merck, on a non-GAAP basis) -- when one considers the quarter-by-quarter management discretion now available at the R&D expense line -- for more on the "fuzzy math" in the Q1 2011 EPS "beat," see my later post here.

Namaste -- and great set of questions, Anon. . . .

So it goes.