1. Merck & Co Inc. (NYSE:MRK)
Average Upside Potential: 27.06%
Number of Hedge Fund Holders: 96
Merck & Co Inc. (NYSE:MRK) delivers innovative health solutions through its prescription medicines, vaccines, biologic therapies, and animal health products. It has a strong focus on research and development, and its products are used to treat a wide range of diseases and conditions, including cancer, infectious diseases, cardiovascular diseases, and neurological disorders.
Its growth is partly due to a patent for KEYTRUDA that will expire in 2028. This could affect its growth in the future. Merck & Co Inc. (NYSE:MRK) bought Elanco’s aqua business to become a leader in animal health. In July, it bought EyeBio to enter the ophthalmology market and develop treatments for eye conditions. It also bought Prometheus Biosciences, which will help them develop new and advanced treatments.
Recently, the company got FDA approval for its new pneumococcal vaccine, CAPVAXIVE, for adults. It also got FDA approval for the WINREVAIR vaccine for adults with pulmonary arterial hypertension. This vaccine made over $70 million in sales in Q2 2024, with 40% coming from patient doses.
Its revenue grew by 7.16% in Q22024. Human Health grew by 11%, Animal Health grew by 6%, and KEYTRUDA, the cancer drug, grew by 21%. Sales of GARDASIL and VAXNEUVANCE also increased. The company is growing quickly in other countries. Buying Harpoon Therapeutics will help it develop new cancer treatments. All of these factors position Merck & Co Inc. (NYSE:MRK) well for continued success in the global healthcare market.
Regarding Merck & Co., Inc. (NYSE:MRK), Baron Funds’ Baron Health Care Fund made the following statement in its investor letter for the first quarter of 2024:
“Global pharmaceutical company Merck & Co., Inc. (NYSE:MRK), Inc. contributed to the continued growth of Keytruda, the company’s key asset and the leading immuno-oncology agent used to treat a variety of cancers. The FDA’s late March approval of pulmonary arterial hypertension drug sotatercept also drove share gains. We retain conviction as Merck has started to transition from prioritizing its Keytruda franchise to building a more diversified business, with a focus on the Gardasil vaccine, pneumococcal vaccine development, and cardiovascular drug development, well in advance of the scheduled expiration of patent protection/exclusivity rights.”
While we acknowledge the growth potential of Merck & Co Inc. (NYSE:MRK), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MRK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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