Wednesday, May 1, 2013

The "Brave New World" At Merck: Januvia® Faces Significant Worldwide Competition -- On Price, As Well

Over the last eight or so quarters, the Januvia®/Janumet® franchise was a very strong performer -- and grew wildly, both on unit-volumess, and margin (price).

As of this morning's Q1 2013 call, we are seeing the emerging harsh realities -- of competitive entrants -- into a space that Merck, until recently, had to itself. Invokana® is henceforth going to be chief among these -- the recently approved Janssen/J&J beauty-queen. I predicted that just over a month ago, BTW. I specifically guessed that Invokana's arrival would cost Merck about $2 per share, in its NYSE price. So, take a look at MRK's morning trading on the NYSE. Q.E.D.


Add to this that it won't help, at all, if Merck does not prevail in its patent litigation, in India, and Glenmark is allowed to continue to sell -- at 30 per cent of the Merck prices -- its generic versions of those two drugs. As the graphic at right suggests, then Merck's response might be to sell what would amount to an "authorized generic" through Sun in India, but again at perhaps only 50 per cent of its current pricing.

These will indeed be an interesting six or so upcoming quarters.

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