Merck (MRK) PT Raised to $122 at Guggenheim

Guggenheim analyst Vamil Divan raised the price target on Merck (NYSE: MRK) to $122.00 (from $104.00) while maintaining a Buy rating.

The analyst commented: "We are updating our Merck company model and increasing our MRK price target to $122 (from $104) largely driven by inclusion of probability-adjusted revenues for Winrevair in the population investigated in the Phase 2 CADENCE trial, Combined Post and Precapillary Pulmonary Hypertension Due to Heart Failure With Preserved Ejection Fraction (CpcPH-HFpEF), in which Winrevair demonstrated a statistically significant and clinically meaningful reduction in pulmonary vascular resistance (PVR). As we await the full data from this trial (we believe it may be at the American College of Cardiology Scientific Sessions on Mar. 28-30), we have spoken to multiple pulmonologist and cardiologist KOLs about the topline results and their off-label experience with Winrevair in Group 2 PH. Based on their positive views, the fact that MRK has already announced their plan to proceed to Phase 3 trials in this population, and our own independent research in this space, we believe Winrevair in CpcPH-HFpEF represents a >$5B annual revenue opportunity for Merck assuming the Phase 3 population is similar to that in CADENCE, bringing our peak annual POS-adjusted revenues for Winrevair up to >$12.0B. We believe success in this population in addition to what the company has recently brought in through business development (e.g., Verona, Cidara [CDTX]) should help close the gap on what the company needs to do to overcome Keytruda's upcoming decline, setting the company up for success into the 2030s."

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