Shares of Merck and Co. surged Friday after Schering-Plough Corp., which it plans to acquire, reported positive trial results for an anti-clotting drug.
Before the start of trading, Schering-Plough said its drug candidate SCH 530348 met its chief goal in a mid stage clinical trial. The drug is intended to reduce clots during surgery without causing increased bleeding, and is part of the pipeline of heart drugs that led Merck to agree to buy Schering-Plough for $41.1 billion on March 9.
Merck shares advanced $3.32, or 13.8 percent, to $27.36 in afternoon trading, continuing a three-day rally which has seen its stock climb 14.5 percent. The shares dropped to a 13-year low of $20.05 following the Schering-Plough buyout announcement.
In a client note, Bernstein Research analyst Tim Anderson said SCH 530348, also called a thrombin receptor antagonist, could eventually grow to several billion dollars a year. He upgraded Merck shares to "Outperform" from "Market Perform," and said the Schering-Plough buyout strengthens Merck's position in the coming years.
Merck has a very strong record of research and development, Anderson said, and Schering-Plough acquisition shores up the company's pipeline over the next few years.
"From 2010-2015, Merck/Schering-Plough offers the highest growth of the 10 names we cover in the U.S. and Europe," he said.
Anderson deemed the thrombin receptor antagonist the most important drug in the Schering-Plough pipeline.
