RAHWAY, N.J. - Merck (NS:PROR) (NYSE: MRK), known as MSD outside the United States and Canada, has received approval from the National Medical (TASE:PMCN) Products Administration (NMPA) in China for KEYTRUDA as a treatment for certain early-stage non-small cell lung cancer (NSCLC). This marks the fourth NSCLC indication for KEYTRUDA in China, expanding its use to earlier stages of the disease. The pharmaceutical giant, with a market capitalization of $258 billion and an impressive gross profit margin of 76.59%, continues to strengthen its position in the global oncology market. According to InvestingPro analysis, Merck currently appears undervalued, suggesting potential upside for investors.
KEYTRUDA, an anti-PD-1 therapy, is now approved in combination with platinum-containing chemotherapy as a neoadjuvant treatment, and then as a monotherapy for adjuvant treatment post-surgery for patients with resectable stage II, IIIA, or IIIB NSCLC. This decision follows the U.S. approval in October 2023, based on the KEYNOTE-671 study results, which demonstrated significant improvement in overall survival for these patients.
The KEYNOTE-671 trial showed that KEYTRUDA plus chemotherapy in the neoadjuvant setting, followed by KEYTRUDA as monotherapy after surgical resection, reduced the risk of death by 28% and improved event-free survival by 42%, compared to the chemotherapy-placebo regimen. Adverse reactions were consistent with those seen in other tumors treated with KEYTRUDA in combination with chemotherapy.
Dr. Heather Wakelee, principal investigator for the KEYNOTE-671 study, highlighted the significance of this approval for patients with resectable NSCLC in China, where lung cancer remains the leading cause of cancer death.
Anna Van Acker, Senior Vice President of MSD and President of MSD in China, expressed the company's commitment to addressing the unmet medical needs in earlier stages of NSCLC and the introduction of this new treatment option in China.
Lung cancer is the top cause of cancer death globally, with China experiencing over one million new cases and approximately 733,200 deaths in 2022. The five-year survival rate for lung cancer in China is only 19.7%, underscoring the urgency for improved treatment options. With revenue growth of 6.51% in the last twelve months and a robust research pipeline, Merck is well-positioned to address this significant market opportunity. For detailed insights into Merck's growth prospects and financial health metrics, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks.
Merck's ongoing clinical program for KEYTRUDA includes approximately 25 registrational studies across various types of cancer, aiming to find cancer at earlier stages for a greater chance of long-term survival. The company's strong financial position, evidenced by its GREAT Financial Health Score on InvestingPro, supports its ambitious research agenda. With a consistent track record of dividend payments for 54 consecutive years and recent dividend growth of 10.96%, Merck demonstrates both operational excellence and commitment to shareholder returns.
This news is based on a press release statement from Merck & Co., Inc.
In other recent news, Merck & Co. has been making significant strides in the pharmaceutical industry. The company's investigational drug, sacituzumab govitecan, has been granted FDA Breakthrough Therapy designation for treating certain patients with advanced lung cancer. The drug has also received its first marketing authorization in China for treating specific cases of breast cancer.
Merck's financial performance has been tied to a limited number of key products, with HSBC upgrading its rating for Merck from Hold to Buy, citing confidence in the company's ability to manage the loss of exclusivity challenges it faces. HSBC set a new price target for Merck at $130.00, indicating a positive outlook on the company's shares.
On the other hand, Bernstein SocGen Group adjusted its outlook on Merck, reducing the price target due to concerns over the performance of Gardasil, Merck's HPV prevention vaccine, in China. Despite this, the company reported a 4% increase in third-quarter revenue for 2024, reaching $16.7 billion, driven by strong sales of its cancer drug KEYTRUDA and the introduction of WINREVAIR.
BMO (TSX:BMO) Capital reiterated their Outperform rating on Merck shares, following the successful ZENITH trial investigating sotatercept's effectiveness in treating pulmonary arterial hypertension. This success could potentially bolster Winrevair's market presence and increase company revenue.
Lastly, Merck, in collaboration with Alexion (NASDAQ:ALXN) and AstraZeneca (NASDAQ:AZN) Rare Disease, announced positive results from the Phase 3 KOMET trial of KOSELUGO in adults with neurofibromatosis type 1. These are the recent developments from Merck's operations.
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