Biotech Values

[DewDiligence]

MRK has three strong growth engines: Keytruda, vaccines, and animal health; the latter has been largely overlooked by Wall Street but is now large enough to require its own segment reporting.

Inasmuch as demand for pet care and protein foods rises in step with increasing global affluence, it’s not surprising that MRK’s animal-health business is growing rapidly in emerging markets. If you ascribe a ZTS-like valuation to this business segment, MRK’s overall valuation is not hard to justify, IMO.

In the institutional portfolio I manage, I bought some MRK a month ago in the high 50s.