Merck Stock In Focus After Regulatory Approval For PAH Drug: Retail Sentiment Brightens

Shares of Merck & Co. Inc ($MRK) were in the spotlight this week after the pharmaceutical major secured regulatory approval in the U.K.  for its drug Sotatercept, lifting retail sentiment.

The drug, branded Winrevair, is used for the treatment of pulmonary arterial hypertension-related conditions.

UK’s Medicines and Healthcare Products Regulatory Agency approved its use in combination with other drugs to aid the “exercise capacity in adult PAH patients” who suffer from moderate or marked constraints in physical activity, according to media reports.

The MHRA's approval was based on data from a study of 323 patients that found Merck's therapy was more effective in improving patients' ability to exercise, compared to placebo, Reuters reported.

Both the FDA and EU health regulators had approved the drug in 2024.

Retail sentiment on Stocktwits turned ‘neutral’ from ‘bearish a week ago. Message volumes have stayed in the low category.

MRK sentiment meter and message volumes on Jan 2

Last month, BMO Capital downgraded Merck to Market Perform from Outperform with a price target of $105, down from $136 the Fly.com reported.

According to the report, "mounting skepticism across Pharma" may see Merck shares getting "potentially stuck in limbo" over the next 12 months with more attractive options available elsewhere.

The firm attributed Merck's commercial overhangs such as its Gardasil franchise in China, and additional clarity requirements on its “Keytruda gap with Inflation Reduction Act negotiation.”

Merck shares have lost 22% in the last six months.

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