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Merck (MRK - Analyst Report) recently announced that the US Food and Drug Administration (FDA) has accepted its Biologics License Application (BLA) for its ragweed pollen (ambrosia artemisiifolia) sublingual allergy immunotherapy tablet.

Merck’s Timothy grass pollen (phleum pratense) sublingual allergy immunotherapy tablet is also under FDA review. A response on both candidates should be out in the first half of 2014. Both candidates have been developed to help treat the underlying cause of allergic rhinitis by triggering an immune response to help protect against the targeted allergen.

Merck, which is facing generic competition for erstwhile blockbuster drug, Singulair, is working on developing its pipeline to help make up for the loss of revenues resulting from genericization. Earlier this month, the company gained 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.

Merck has another FDA decision coming up. The company, which submitted a new drug application (NDA) for its insomnia candidate - suvorexant, should receive a response from the FDA regarding the approval status of the candidate in mid-13. The FDA’s Peripheral and Central Nervous System Drugs Advisory Committee will meet to discuss the suvorexant NDA on May 22, 2013.

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 currently carries a Zacks Rank #3 (Hold). At present, companies like Catalyst Pharmaceuticals Partners Inc. (CPRX - Snapshot Report) and Salix Pharmaceuticals, Ltd. (SLXP - Analyst Report) look attractive in the pharma space. Both are Zacks Rank #1 (Strong Buy) stocks.

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