Friday, February 3, 2012

Seeking Alpha: Merck Looks Likes A Name To Own In Drugs

Roche (RHHBY.PK) was a good name to own throughout 2011 in large part because so little was expected from the company. Investors still looking to position their portfolio for 2012 may want to consider Merck (MRK) for similar reasons. Not only does Merck have a pretty tolerable patent cliff over the next three years, but the company's pipeline may yet be undervalued and under-appreciated.

Q4 Results: Good Margins On So-So Sales
Merck's fourth quarter was more or less fine. Revenue grew 2%, but came in about 2% light of average Wall Street guesses. Januvia was quite strong (revenue up 42%) and Singulair did well for a drug that is long in the tooth (up 8%), but Remicade was a little weak and the company did have to swallow a 15% drop in sales of Vytorin. Animal health and consumer sales were up 7% and 5%, respectively, but are relatively small businesses for Merck.

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Merck Looks Like A Name To Own In Drugs

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