Merck Downgraded by Jefferies Amid Successful Vaccine Trial
Jefferies Financial Group downgraded Merck & Co., Inc. (NYSE:MRK) from a 'strong-buy' rating to a 'hold' rating in a report released on Wednesday.
The downgrade comes after Merck's quarterly earnings data, which topped analysts' consensus estimates of ($0.26) by $0.13 per share. The company reported revenue of $16.61 billion during the quarter, up 5.1% from the previous year.
Merck also made a significant bet on a new cancer growth engine with its individualized mRNA vaccine, intismeran, combined with Keytruda. This combination met the primary endpoint in a large Phase 3 trial and significantly extended recurrence-free survival and reduced the risk of melanoma spreading compared to Keytruda alone.
The successful vaccine-Keytruda combination could help support Merck's oncology pipeline as Keytruda's patent protection is expected to expire later this decade. However, the companies face substantial future pressure from Keytruda's eventual loss of exclusivity.