Merck & Co. (MRK) shares posted the biggest two-day percentage gain in their
history on increased investor optimism surrounding the drug giants planned
purchase of Schering-Plough Corp. (SGP).
The Whitehouse Station, N.J., companys stock rose more than 23 for Thursday
and Friday. It closed up $3.04, or 12.7, to $27.07 on the day but in recent
after-hours trading the stock was at $27.06. The stock on Friday was up roughly
35 from its weakest point Monday when it was weighed down by concerns about
Mercks $41 billion cash-and-stock purchase of Schering.
The two-day gain in Merck shares added more than $10.8 billion to Mercks
market capitalization. Still, Merck shares remain off more than 35 over the
past 12 months.
On Thursday, The Lancet medical journal published results of a mid-stage
clinical trial of Scherings experimental anti-clotting drug, known as TRA,
which showed it didnt increase bleeding when given with current standard
therapy. Analysts believe the drug could be a big seller, and it helped make
Schering an attractive takeover target in Mercks eyes.
Fridays rally was spurred, in part, by Sanford Bernstein analyst Tim
Andersons upgrade of Merck shares to an outperform rating from market perform.
Anderson said Mercks valuation had gotten too low for a best-in-class
grower.
In a note to clients, Anderson said Merck is paying a very fair price for
Schering-Plough, which he said has one of the best longer-term outlooks among
major drug companies. Before Fridays gain, Anderson said a combined
Merck/Schering-Plough would be one of the cheapest among major drug stocks as a
multiple of long-term earnings, even though he expects the combined entity to
have the best earnings growth through 2015.
Anderson set a new price target for Merck shares of $30.
He acknowledged that his call might be controversial because Johnson &
Johnson (JNJ) has yet to weigh in with whether itll try to claim full rights
to the anti-inflammatory drug Remicade and a follow-up that it co-markets with
Schering-Plough.
Merck and Schering-Plough, however, believe the acquisition is structured so
that they will retain Scherings rights to the drugs. J&J has declined to
comment on the situation. If J&J were to gain full control of Remicade and the
follow-up drug, Schering-Plough would be less valuable to Merck, although
Anderson thinks its still a good deal.
Credit Suisse analyst Catherine Arnold weighed in Friday with a prediction
that Merck/Schering will probably be able to hang onto the rights to Remicade
and the follow-up drug. The case could to arbitration, and Arnold said its
possible J&J would get a consolation prize in return, such as a higher royalty
payment, she wrote in a note to clients.
Some analysts have even raised the possibility that J&J would make its own
bid to acquire Schering.
Schering-Plough shares closed up $1.89, or 8.5, at $24.21 in 4 p.m. trading.
history on increased investor optimism surrounding the drug giants planned
purchase of Schering-Plough Corp. (SGP).
The Whitehouse Station, N.J., companys stock rose more than 23 for Thursday
and Friday. It closed up $3.04, or 12.7, to $27.07 on the day but in recent
after-hours trading the stock was at $27.06. The stock on Friday was up roughly
35 from its weakest point Monday when it was weighed down by concerns about
Mercks $41 billion cash-and-stock purchase of Schering.
The two-day gain in Merck shares added more than $10.8 billion to Mercks
market capitalization. Still, Merck shares remain off more than 35 over the
past 12 months.
On Thursday, The Lancet medical journal published results of a mid-stage
clinical trial of Scherings experimental anti-clotting drug, known as TRA,
which showed it didnt increase bleeding when given with current standard
therapy. Analysts believe the drug could be a big seller, and it helped make
Schering an attractive takeover target in Mercks eyes.
Fridays rally was spurred, in part, by Sanford Bernstein analyst Tim
Andersons upgrade of Merck shares to an outperform rating from market perform.
Anderson said Mercks valuation had gotten too low for a best-in-class
grower.
In a note to clients, Anderson said Merck is paying a very fair price for
Schering-Plough, which he said has one of the best longer-term outlooks among
major drug companies. Before Fridays gain, Anderson said a combined
Merck/Schering-Plough would be one of the cheapest among major drug stocks as a
multiple of long-term earnings, even though he expects the combined entity to
have the best earnings growth through 2015.
Anderson set a new price target for Merck shares of $30.
He acknowledged that his call might be controversial because Johnson &
Johnson (JNJ) has yet to weigh in with whether itll try to claim full rights
to the anti-inflammatory drug Remicade and a follow-up that it co-markets with
Schering-Plough.
Merck and Schering-Plough, however, believe the acquisition is structured so
that they will retain Scherings rights to the drugs. J&J has declined to
comment on the situation. If J&J were to gain full control of Remicade and the
follow-up drug, Schering-Plough would be less valuable to Merck, although
Anderson thinks its still a good deal.
Credit Suisse analyst Catherine Arnold weighed in Friday with a prediction
that Merck/Schering will probably be able to hang onto the rights to Remicade
and the follow-up drug. The case could to arbitration, and Arnold said its
possible J&J would get a consolation prize in return, such as a higher royalty
payment, she wrote in a note to clients.
Some analysts have even raised the possibility that J&J would make its own
bid to acquire Schering.
Schering-Plough shares closed up $1.89, or 8.5, at $24.21 in 4 p.m. trading.
14/3 2009 00:40 collersteen 0
4581 Det "sjove" er at det også øger værdien af deres tilbud på Schering og dermed vil presse J&J til at komme op med et endnu højere tilbud... måske.
