Hapoalim Securities Initiates Coverage on Merck (MRK) with a Hold; Vytorin and Zetia Headwinds

November 11, 2009 7:41 AM EST

Hapoalim Securities initiates coverage on Merck & Co. (NYSE: MRK) with a Hold rating, price target $35.

Hapoalim analyst says, "With the recently completed merger with Schering, Merck now has the best pipeline and fastest growth in the group, which implies longer-term value. In the near-term, however, we think headline risk from Zetia may drag on the stock...Merck also has the fastest growth of its U.S. peers, suggesting that Merck may provide value for investors over the longer-term. Near-term, however, we think Vytorin and Zetia may continue to cause problems as we expect the ARBITER-6 trial to show Niaspan to be superior to Zetia at slowing or reversing plaque progression...We view the biggest near-term catalyst for Merck as the ARBITER–6 results presentation at the AHA meeting November 16 and think the trial will go against Merck's Zetia. In June, the ARBITER-6 trial comparing Niaspan to Zetia was terminated early and, based on results from the ENHANCE trial and recently released Niaspan data, we assume that Niaspan will prove superior to Zetia. If this trial favors Niaspan, it would be the third blow against Zetia after the ENHANCE and SEAS trials, and we would expect Zetia and Vytorin prescriptions to show continued declines. It could also give further weight to the idea that Zetia may fail in the IMPROVE-IT trial (which could lead to a full market withdrawal of both Zetia and Vytorin)."

To see more analyst ratings on MRK Click Here.

Merck & Co., Inc. provides products for human and animal health primarily in the United States.

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