Merck (MRK) recently announced that an increase in intracranial hemorrhage was associated with its blood thinner candidate, vorapaxar, in patients with a history of stroke.
Vorapaxar was being evaluated in two studies – TRACER (a study in patients with acute coronary syndrome) and TRA-2P (a study in patients with prior heart attack, stroke and peripheral artery disease). Earlier in Jan, Merck had announced that a Data and Safety Monitoring Board (DSMB) , after reviewing the safety and efficacy data of the two trials, had recommended that the TRACER study should be discontinued.
Merck said that the TRA-2P study will be continued in patients who do not have a history of stroke. The TRA-2P trial is being conducted to observe the first occurrence of any component of the composite of cardiovascular death, myocardial infarction, stroke, and urgent coronary revascularization compared to placebo. Merck completed enrollment in this study in November 2009.
With vorapaxar, Merck is looking to carve a position in a market which is dominated by players like Bristol-Myers Squibb Co.’s (BMY) Plavix, Eli Lily & Co.’s (LLY) Effient and AstraZeneca’s (AZN) Brilinta. The increase in bleeding associated with vorapaxar could make it challenging for the candidate to take share once approved.
Neutral on Merck
We currently have a Neutral recommendation on Merck, which is supported by a Zacks #3 Rank (short-term Hold rating). Merck is facing issues like patent expirations of key drugs and European pricing pressure. However, the company has a deep pipeline which should act as a cushion when its key products lose patent expiry in the next few years. Moreover, some of the company’s recent launches should start contributing significantly to the top line in the forthcoming quarters. Besides, the restructuring initiatives undertaken by the company should also improve its bottom line.
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