Merck & Co. Inc.’s (NYSE: MRK) shares fell sharply for the second consecutive day after the company had announced to withdraw its application of its Keytruda drug for European usage. Merck’s shares fell by 5.8 percent midday on Monday.
Keytruda has already delivered promising results in its previous clinical trials and has also received accelerated approval by U.S. Food and Drug administration for treatment for non-small cell lung cancer.
The withdrawal of the application has made many investors and analysts unsure and cautious of the pharmaceutical company.
John Boris, Suntrust analyst, suggested that Merck maybe holding off on international commercialization until the company and regulators receive more information on the clinical trials. Boris lowered his price target from $73 to $54.
Barclays analyst, Geoff Meacham, stated in a note that the rating was downgraded to equal weight from overweight based on the withdrawal. Meacham lowered the price target from $72 to $62.
Morgan Stanley analysts have also downgraded Merck to an equal weight. David Risinger said in a note to clients that Merck shares will most likely stay flat or underperform depending on clinical trial results and could also face pressure from its competitors.
Bristol-Myers, Merck’s competitor, shares were up 1.8 percent on Tuesday after news of Merck’s withdrawal.
Despite the withdrawal, Keytruda still posted over $1 billion in sales for the first time in the third quarter even though the company had previously reported in the second quarter that the cyberattack would affect the company. The cyberattack resulted in a $135 million loss in sales.
Pamela Eisele, Merck’s spokesperson, told CNBC that the company plans to submit a new application to the EU once additional data from the clinical trials are available.
According to Benzinga, analysts are estimating Keytruda sales in 2018 to be $5.4 billion, lowering the forecast from the previous $6.0 billion. Analysts have forecasted 2019 sales to be $6.6 billion, lowered from the original $7.4 billion.
Merck shares have fallen over 10 percent in the past two consecutive days after it had released its earnings and now the announcement of its withdrawal.