) recently moved its Alzheimer's disease candidate, MK-8931, into
a phase II/III study (EPOCH). The study will evaluate the safety
and efficacy of MK-8931, an oral β-amyloid precursor protein
site-cleaving enzyme (BACE) inhibitor, in mild-to-moderate
Alzheimer's disease patients.
Three oral doses of MK-8931 will be compared to placebo in the
78-week, randomized, placebo-controlled, parallel-group,
double-blind study. The safety profile of the candidate will be
evaluated in 200 patients before phase III studies are
We view MK-8931 as a high risk-high return candidate for
Merck. The successful development of therapies for the treatment
of Alzheimer's disease is challenging and we note that several
companies have failed in developing treatments for the same.
Johnson & Johnson
) have all faced setbacks in their efforts to develop a treatment
for Alzheimer's disease.
The Alzheimer's disease market, however, represents huge
commercial potential and therefore attracts a lot of interest. A
successfully developed product could generate billions of dollars
in sales once launched. As per data provided by the Alzheimer's
Association, approximately 5.4 million people have Alzheimer's
disease in the US alone.
Neutral on Merck
We currently have a Neutral recommendation on Merck, which
carries a Zacks #3 Rank (Hold). While headwinds remain in the
form of the Singulair genericization, EU pricing pressure,
unfavorable currency movement, US health care reform, the
Remicade/Simponi transition and pipeline setbacks, some of the
company's recent launches should start contributing significantly
to the top line in the forthcoming quarters.
Large-cap pharma stocks currently holding a Zacks #2 Rank
(Buy) include companies like
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