Mixed News on Merck's Pipeline - Analyst Blog

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Merck ( MRK ) recently announced mixed news on the pipeline front. While the company received support from the US Food and Drug Administration's (FDA) Central Nervous System Drugs Advisory Committee for its insomnia candidate, suvorexant, Merck said that it will not pursue regulatory filings for its Parkinson's disease candidate, preladenant.

The company's decision regarding preladenant was based on an initial review of data from three phase III studies which did not show evidence of efficacy compared to placebo.

As a result, Merck decided that it will not continue with the extension phases of these studies or pursue regulatory filings. Results from these studies will be presented at an upcoming meeting.

Meanwhile, positive news came in the form of the FDA's advisory panel voting in favor of approving suvorexant. Although the FDA is not required to follow the panel's advice, it usually does so. A response from the agency should be out by mid-year.

Once it is approved, the Drug Enforcement Administration (DEA) will assess and assign the schedule for suvorexant before it is launched.

Merck currently carries a Zacks Rank #3 (Hold). While the preladenant news is disappointing, we are encouraged by the positive opinion received by suvorexant. Suvorexant belongs to a new class of medicines called orexin receptor antagonists which target and block orexins.

Approval would make suvorexant the first orexin receptor antagonist to reach the market. However, we note that the insomnia market is highly competitive and genericized especially given the presence of generic versions of Sanofi's ( SNY ) Ambien.

Companies that currently look well-positioned include Santarus, Inc. ( SNTS ) and Salix Pharmaceuticals, Ltd. ( SLXP ). Both are Zacks Rank #1 (Strong Buy) stocks.



MERCK & CO INC (MRK): Free Stock Analysis Report

SALIX PHARM-LTD (SLXP): Free Stock Analysis Report

SANTARUS INC (SNTS): Free Stock Analysis Report

SANOFI-AVENTIS (SNY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: MRK , SLXP , SNTS , SNY

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