Investors of Merck & Co. (NYSE: MRK) may want to mark December 9-13 on their calendars. The reason is that the San Antonio Breast Cancer Symposium will take place then, and Merck plans to announce the results of its breast cancer immunotherapy trials during the conference.
The drug at the center of focus for the company is Keytruda, which has already been approved by the FDA for treating advanced melanoma. However, the drug showed promise in treating other cancers including triple-negative breast cancer (TNBC). TNBC is difficult to cure because it does not usually improve after using traditionally effective treatments such as hormone therapy. Merck hopes to change that with Keytruda.
The drug works by inhibiting a protein called programmed death receptor 1 (PD-1), which negatively regulates immune response. Tumors use PD-1 to avoid cells that fight against diseases. PD-1 blockers are a new class of immunotherapy drugs that could achieve over $30 billion in annual sales, according to Thomson Reuters (NYSE: TRI). Keytruda was the first such drug to receive approval for melanoma treatments in the United States. Merck’s closest rival so far in this market is Swiss pharmaceutical company Hoffman-La Roche.
A successful set of results from the clinical trials could help reverse the trend in Merck’s stock price from the past month-and-a-half. According to data from Yahoo! (NASDAQ: YHOO) Finance, after climbing over $60 in early September, Merck’s share price declined to $53.43 on October 16th. During that time, Merck CEO Kenneth C. Frazier sold 9,895 shares in the company, according to an SEC filing. This could be troubling given the fact that the company is set to release third quarter earnings data on October 27th.
The stock price has started to regain some momentum over the past few days, currently sitting around $56. However, several analysts have given Merck’s stock a buy rating while others have given it a hold rating. In addition, there was a very high volume of options trading on the stock this past Tuesday. The lack of consensus as to how the company will finish the year may encourage investors to wait for some impactful news.
Keytruda will reportedly be the sixth most expensive drug on the market at a price of $12,500 per patient per month. The December announcements may bring the wait-and-see investors an early holiday gift because positive results could potentially translate to an expansion in the market reach of Keytruda in the future.