Merck & Co., Inc. (MRK): One Potential Roadblock For A Stock Runup

I suspect that the drugs being reviewed by the FDA are more likely than not to receive approval. Merck & Co., Inc. (NYSE:MRK) partner Endocyte, Inc. (NASDAQ:ECYT) are seeking European approval for ovarian cancer drug vintafolide based on early stage and mid-stage clinical trials only. While the drug shows considerable promise, there is always a risk that authorization could be denied.

Perhaps the larger risk stems from the 16 drugs in phase 3 clinical studies. While a small number of failures in these studies probably wouldn’t materially impact Merck over the long run, any bad news could take a toll on the stock in the short term.

When, not if
Overall, Merck is doing well despite declining revenue from Singulair and other drugs. I like the company’s pipeline potential, especially for insomnia drug suvorexant.

The reality, though, is that the Merck stock run as of late will end at some point. It’s a matter of when it will do so — not if it will. I still like this big pharma over the long run — the run that counts the most.

The article 1 Potential Roadblock for the Merck Stock Run-up originally appeared on Fool.com.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson.

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