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Merck (NYSE:MRK) announced positive top-line results from the pivotal Phase 3 STELLAR trial evaluating the safety and efficacy of sotatercept on Monday.
The company said the trial met its primary efficacy outcome measure, demonstrating a statistically significant and clinically meaningful improvement in the six-minute walk distance from baseline at 24 weeks.
Following the news, Mizuho analysts maintained a Buy rating and $100 per share price target on the stock, telling investors, “while specific details were not disclosed, MRK indicated that the 6MWD improvement was clinically meaningful and consistent with the Phase II PULSAR study, which we estimate could translate to the placebo-corrected LS mean difference of ~20-30 m based on other positive trials and support potential approval.”
“Additionally, the demonstration of consistent improvements across secondary endpoints should provide a tailwind for clinical adoption, in our view. Taken together, we see the results as very close to our best case scenario, and we could see sotatercept sales meet or surpass our conservative forecast of ~$700 mln at 5 years post-launch,” added the analysts.
Elsewhere, Morgan Stanley analysts said, “further details in the release were limited and hence we await presentation of the full data at an upcoming conference, including the effect size.”
“Recall that MRK acquired Acceleron for ~$11bn to gain access to Sotatercept for PAH a $5-$6bn market. For context model a 75% POS for Sotatercept given the Ph2 data. For our base case (success of STELLAR and HYPERION) we project 2030 sales of $2.6bn, for our bull case (success of ZENITH) we project 2030 sales of $4.1bn and our bear case assumes the drug fails in Ph3,” added the analysts.
Finally, Truist analysts reiterated a Buy rating and raised the firm’s price target on Merck to $103 from $95 per share.
“While we await data presentation in 1H2023 to see the full range of data, we believe that the data supports approval of sotatercept in PAH,” wrote the analysts. “We see expansion opportunities beyond the initial indication, but may have to wait for data before investors assign any value.”
Merck shares jumped 4% Monday.
