Novice Investing - Sweet Deal for Merck?

Date: Thursday 07th 2008f August 2008 01:39:38 PM

Sweet Deal For Merck? - 09/13/2005

By: Novice Investing Staff

On Friday September 9th 2005, FDA ( Food and Drug Administration ) approve diabetes pill co developed by Bristol-Myers Squibb and our portfolio recommendation, Merck Co & Inc. The drug, which is now called Pargluva, helps lower blood sugar and certain blood fat. Pargluva is the one of the first medicine that can reduce insulin resistance while controlling fat in the blood. Here is the news of the approval.

The news is not exactly surprising. We have expected the drug to be approved sometime during the second half of 2005. Back on July 2005, We estimate Pargluva (formally known generically as Murglitazar) to have $ 0 in revenue in 2005. If Merck and Bristol-Myers can start selling Pargluva before 2005 ends, then we are ahead of the game.

What does this means? While the drug approval is good news for MRK and BMY, we should note that there are several other diabetes drugs that were approved by the FDA recently. For example: inhalable insulin co developed by Nektar Therapeutics (NKTR), Pfizer Inc. (PFE) and Sanofi Aventis.

Other things that might help Merck's quest of achieving its fair value of $ 45.46 per share includes the recent approval of Proquad, a vaccine used to prevent measles, mump, rubella and varicella viruses. Here is the link to the news.

Keep in mind that the main issues clouding Merck is its Vioxx liability. Therefore, we will be focusing on this as well. As we have said previously, we need to watch for the New Orleans trial set to begin in November 2005.

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Disclaimer: The sole purpose of this article is educational. This article is merely the opinion of the writer and is not in any way a buy/sell recommendation regarding Merck Co & Inc.(MRK) or other securities.

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