Monday, September 26, 2011


Merck's current price builds in the worst case scenario ( IMPROVE-IT negative and Boceprevir failing to get a decent share) and offers a very good entry point.  I continue to believe that MRK management would revert with a fresh new long term guidance, that would  provide assurance to investors that even if the worst case plays out , MRK would still be able to manage the existing dividends to shareholders.  

With peer group companies, offering solid assurance on dividend pay out over the next few years, money has actually flown into these companies, leaving the MRK stock price depressed.

The best case for MRK stock price being, they decide to cut R&D and IMPROVE –IT shows positive data. In such a case MRK stock price should be able to cross the $40 barrier,  I continue to expect that IMPROVE-IT would be positive and Boceprevir should be able to get upto 25% market share, which should translate into $1.5b in peak sales. 

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