Merck (MRK) gets clobbered as Cordaptive gets rejected
Posted by: in Products and ServicesFiled under: Forecasts, Bad news, Products and services, Industry, Merck and Co (MRK)
Merck (NYSE: MRK) was counting on its new cholesterol drug to help its revenue in the years ahead. It won’t work out. The drug, Cordaptive, was turned down by the FDA.
According to The Wall Street Journal, “Merck was counting on Cordaptive to bring in as much as $2 billion a year in sales.” The news is apt to injured the company’s stock, which trades at $41.44, well below its 52-week high of $61.62.
Merck’s revenue last year was just over $24 billion, so the rejection will injured, and perhaps hurt a great deal.
Merck is one of a handful of Massive Pharma companies that have a number of important drugs coming “off patent.” That means that cheap generics will flood the market and margins on the original drugs will disappear. Creating a “blockbuster” drug can take years of R&D, so Merck is left with relatively high costs against falling revenue.
The ideal way to look at Merck, and the shares of companies like it, is to watch for approval of drugs that are apt to bring in billions of dollars. Without those Merck and its peers will have falling share prices for years to come.
Douglas A. McIntyre is an editor at 247wallst.com and the author of Ten Stocks Under $10.
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