Merck’s stock price is fascinating The shares trade near their 52-week high, changing hands at almost $44. But, the company has tons of problems. The fact that Pfizer has just cuts its US sales force by 20% is not good news for Merck.
A very few drugs, including Zocor and Fosamax, make up half of Merck’s sales. Generics are eating away at sales as its drugs come off patent. In that way, it is no different from any other Big Pharma company. And, there are the Vioxx suits. They may go well, but they could go badly. The liability has the potential of being huge. Not unlike the tobacco companies a decade ago.
But, Merck’s stock has not traded in this range since September 2004? Very hard to say.
The most recent developments at the company have not been good. The company’s newest big bang drug Arcoxia seems to present heart health risks. And, Wal-Mart’s marketing of $4 a month perscriptions for generics does not make Merck’s future any brighter.
And, Merck’s price-to-sales ratio is 4.24 Bristol-Myers is at 2.59. And, Pfizer is at 3.74.
Makes Merck look expensive.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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