Novice Investing - Another Vaccine On The Pipeline

Date: Sunday 20th 2008f July 2008 12:51:41 PM

Another Vaccine On The Pipeline - 10/08/2005

By: Novice Investing Staff

On Thursday October 6th 2005, Merck Co & Inc. (MRK) revealed the result of the study for its cervical cancer vaccine. Gardasil was found to be 100% effective in blocking infection of two human papilloma virus, HPV type 16 and 18. The next thing it needs to do is to file for approval to the Food and Drug Administration (FDA), which we are sure they had already done.

With the Vioxx overhang, this news does not amount to much. While we predicted Gardasil to have a 500 M in 2006 annual sales, Merck's common stock will not move much even if it hits its sales target. Vioxx Lawsuit is estimated to cost the company $ 20 Billion. Some predicted higher. But, this is the main driver of the stock price. Once the picture of lawsuit becomes clearer, then Merck's profitability figure will be the main driver. However, it is nice to know that MRK is still on track to produce certain key drugs that it said it would.

As an Illustration, on Friday October 7th 2005, Merck was quoted down 3.5% due to the development in the Vioxx trial. In short run, Merck's stock will continue to be volatile. We admit that we have been buying MRK way too early for our portfolio pick. However, there is nothing that would indicate that potential Vioxx liability will be higher than we thought. At least, for now.

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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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