Biotech Values

[Titan V]

Merck Does a Fine Deal, But Not the One It Needs
https://www.bloomberg.com/gadfly/articles/2018-02-21/merck-viralytics-deal-just-doubling-down-on-keytruda

Instead of finding new growth sources, the drugmaker doubles down on Keytruda.

...Merck is overly dependent on Keytruda, which is expected to account for 14 percent of revenue in 2018 and 25 percent in 2022. And it seems laser-focused on deepening that commitment. Its previous big deal, the $137 million acquisition of Rigontec GmbH in September, was also IO-focused. Its licensing deal for AstraZeneca PLC's cancer drug Lynparza will generate revenue, but will likely only really pay off if the drug succeeds in combination with Keytruda.

...

And the pipeline is thin outside of Keytruda. Merck recently canceled a highly anticipated late-stage Alzheimer's trial. There are some vaccines, a few other cancer programs, and a heart drug in late-stage trials. But there's nothing to particularly excite investors. The company is badly in need of other sources of potential growth.

This isn't an abstract concern -- it's a weight on Merck's stock price. Shares still haven't recovered from Roche Holding AG's November release of positive data from a competing combination study in lung-cancer patients -- even though Merck has since produced impressive combo data in the same group.