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Merck & Co Inc MRK

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Adjuvant Cancer Data and Co-Formulations of Next Generation Drugs Highlighted at ASCO

Damien Conover, CFA Sector Director

Analyst Note

| Damien Conover, CFA |

At the annual American Society of Clinical Oncology (ASCO) meeting, data was presented that should support continued strong cancer drug sales for several wide-moat drug firms, including Merck, AstraZeneca, Roche, and Bristol-Myers. While we are not making any changes to our fair value estimates based on the data, we hold a stronger conviction in our longer-term projections based on the clinical updates. We believe the data presented in the adjuvant cancer settings (early-stage cancer) along with co-formulations of next generation drugs (such as LAG-3 targeted drugs) with currently marketed drugs hold the most potential.

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Company Profile

Business Description

Merck makes pharmaceutical products to treat several conditions in a number of therapeutic areas, including cardiometabolic disease, cancer, and infections. Within cancer, the firm's immuno-oncology platform is growing as a major contributor to overall sales. The company also has a substantial vaccine business, with treatments to prevent hepatitis B and pediatric diseases as well as HPV and shingles. Additionally, Merck sells animal health-related drugs. From a geographical perspective, close to half of the firm's sales are generated in the United States.

Contact
2000 Galloping Hill Road
Kenilworth, NJ, 07033
T +1 908 740-4000
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 74,000

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