Back to top

Analyst Blog

Merck (MRK - Analyst Report) recently gained US Food and Drug Administration (FDA) approval for its combination cholesterol treatment, Liptruzet. The FDA granted approval to Liptruzet for the treatment of elevated low-density lipoprotein (LDL) cholesterol in patients with primary or mixed hyperlipidemia as adjunctive therapy to diet when diet alone is not enough.

Liptruzet is basically a combination of two drugs – Merck’s Zetia (ezetimibe) and Pfizer’s (PFE - Analyst Report) Lipitor (atorvastatin). While ezetimibe will help inhibit the absorption of cholesterol in the digestive tract, atorvastatin will inhibit the production of cholesterol in the liver.

However, Liptruzet is yet to show any additional benefit compared to Lipitor where cardiovascular morbidity and mortality are concerned.

We note that Merck has another Zetia/statin combination in its portfolio in the form of Vytorin. Vytorin is a combination of Zetia and Zocor (simvastatin). Merck’s cardiovascular franchise currently consists of Vytorin and Zetia. While Zetia sales increased 5.7% to $2.6 billion in 2012, Vytorin sales declined 7.2% to $1.7 billion.

Merck has entered a challenging period with erstwhile blockbuster drug, Singulair, losing exclusivity in the US as well as the EU. With Singulair and a few other products facing generic competition, we expect the top- and bottom-line to remain under pressure. Other headwinds remain in the form of unfavorable currency movement and pipeline setbacks.

Merck has another FDA decision coming up later this year. The company, which submitted an NDA for its insomnia candidate - suvorexant, should receive a response from the FDA regarding the approvability of the candidate in mid-13.

Once it is approved, the Drug Enforcement Administration (DEA) will assess and assign the schedule for the drug before it is launched.

Suvorexant belongs to a new class of medicines called orexin receptor antagonists which target and block orexins. However, we note that the insomnia market is highly competitive and genericized especially given the presence of generic versions of Sanofi’s (SNY - Analyst Report) Ambien.

Merck, Pfizer and Sanofi are all Zacks Rank #3 (Hold) stocks. Currently, AbbVie (ABBV - Analyst Report) looks attractive with a Zacks Rank #2 (Buy).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 27.00 +10.25%
CANADIAN SO… CSIQ 38.34 +8.18%
BANCO DO BR… BDORY 16.78 +8.05%
CENTURY ALU… CENX 26.97 +7.97%
WILLDAN GRO… WLDN 11.38 +5.86%