Merck (MRK) CEO Kenneth Frasier has warned that the 12- to 18-month targets being suggested for a Covid-19 vaccine are “very aggressive,” telling the Financial Times, “it is not something I would put out there that I would want to hold Merck to.”
“Speed is one factor, but in some ways we don’t really accept the concept of a race … We understand the urgency, but our goal isn’t to be the frontrunner in the early stages — it’s to develop a vaccine that is safe and effective” Frasier told the Financial Times.
On Tuesday Merck became the latest drugmaker to join the race for the development of a COVID-19 treatment by announcing the purchase of Austrian vaccine maker Themis Bioscience and the collaboration with non-profit research group IAVI.
The vaccine candidate being developed with IAVI will use the recombinant vesicular stomatitis virus (rVSV) technology that is the basis for Merck’s Ebola Zaire virus vaccine, ERVEBO (Ebola Zaire Vaccine, Live), which was the first rVSV vaccine approved for use in humans. Clinical studies are planned to start later this year.
In general very large “clinical trials take a long time,” the Merck CEO told CNBC, adding “If you’re going to immunize a lot people, millions if not billions of people, you’re going to have to make sure that you know exactly what that vaccine will do in people and you can ensure the safety of people.”
Overall, the stock scores a bullish Strong Buy Street consensus with 8 recent Buy ratings and 2 Hold ratings. The $92.10 average price target suggests 19% upside potential in the shares in the coming 12 months. Shares are currently trading down 15% year-to-date. (See Merck stock analysis on TipRanks).
Following Merck’s announcements, Mizuho Securities analyst Mara Goldstein reiterated a Buy rating on the stock with a $100 price target.
“As a major player in vaccine development (also the first licensed Ebola vaccine), this move makes sense. MRK was not the first to announce plans to tackle Covid-19 but this is not inconsistent with the company’s historically more measured responses,” Goldstein told investors on May 26.
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