Merck & Co. (MRK) shares surged 0.73 percent, nearly one percent, to USD 59.50 after a nearly decade long study proved the embattled drug Zetia effective in lowering heart attacks and strokes chances in high risk patients.
The findings of the long-awaited trial have marked a new milestone for Merck’s cholesterol lowering drug in the 40-year-old battle to fight against heart problems and other cardiovascular diseases by lowering LDL or bad cholesterols.
But what would be the implications of the remarkable clinical results on the sales of Merck’s drugs, especially when Zetia has lost patent protection in two years.
Market analysts believe that the study’s results may prove to be a boon for the drug makers Sanofi SA (SNY) and Regeneron Pharmaceuticals (REGN) that are developing a new class of low-density lipoprotein (LDL)-reducing agents known as PCSK9s.
The study has opened the way for a new drug type outside of the statin class of medicines that are known for lowering cholesterols till now.
According to the researchers behind the study, the benefit of Meck’s cholesterol drug was modest, i.e. a 6.4 percent reduction in all cardiovascular diseases among the high-risk patients.
The remarkable results pushed the shares of other pharmaceutical companies, including Sanofi and Regeneron, along with Meck.
Sanofi shares were up 1.84 percent to USD 47.56, while Regeneron shares surged 2 percent to USD 403.09.
Meanwhile, MERCK & CO was rated as a Buy with a ratings score of B+ by TheStreet Ratings team.
Making their recommendation for Merck, TheStreet Ratings Team said “We rate MERCK & CO (MRK) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company’s strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.”
Since 2008, the sales of Zetia have declined over its effectiveness and safety concerns that were raised in smaller studies.
But the new study which was named ‘The Improve-it’ have refuted such safety fears.
The study investigators detailed the findings at the American Heart Association scientific meeting in Chicago.