Merck (MRK) shares gained on Thursday as Wolfe Research upgraded the pharma giant to Outperform from Peer Perform, while AbbVie (ABBV) tumbled as the brokerage downgraded it to Peer Perform from Outperform.
Analyst Alexandria Hammond argued that Rahway, New Jersey-based Merck (MRK) is well-positioned to face the upcoming loss of market exclusivity for its intravenous version of its blockbuster cancer therapy, Keytruda.
Based on physician commentary, the analyst expects MRK to convert 41% of its revenue from intravenous Keytruda to its newly approved subcutaneous version, Qlex, by 2029, as she set her 2030 projection for the Keytruda franchise $6B higher than the consensus.
Additionally, Hammond argued that the company is positioned for a catalyst-rich period and “poised for a breakout following accretive M&A” due to its recent acquisitions, such as antiviral developer Cidara Therapeutics. She issued a $135 per share target on MRK.
As for AbbVie (ABBV), the analyst opined that the company shares already reflect outperformance in its newer immunology products, Skyrizi and Rinvoq, which dominate its immunology and inflammation ((I&I)) franchise following the patent cliff for the arthritis blockbuster Humira.
“With that context, we’d be on the sideline until we have greater visibility on ABBV’s I&I encore and/or competitive dynamics,” Hammond wrote, removing her $275 per-share price target on the stock.