Merck & Co. Inc. MRK announced that its board has approved a share buyback program wherein the company will purchase up to $10 billion worth of shares.
Following the announcement, Merck's repurchase authorization stands at $11.7 billion, including about $1.7 billion remaining under a program announced in May 2013. We remind investors that the company returned nearly $13 billion to shareholders through dividends and share repurchases in 2014. The share repurchase program reinforces the company’s commitment to return value to shareholders.
Merck’s Keytruda Study Stopped on Favorable Results
In a separate press release, Merck announced that a phase III study (KEYNOTE-006) on its advanced melanoma treatment, Keytruda will be stopped early after an Independent Data Monitoring Committee concluded that the study met its two primary endpoints of progression-free survival and overall survival.
The global, open-label, randomized, pivotal phase III study (n=834) compared Keytruda to Bristol-Myers Squibb Company’s BMY Yervoy (ipilimumab) for the first-line treatment in patients suffering from unresectable stage III or IV advanced melanoma with no more than one prior systemic therapy.
Results from the study revealed that when treated with Keytruda, patients demonstrated a statistically significant improvement in overall survival and progression-free survival as compared to Yervoy. Merck intends to present the data at the annual meeting of the American Association of Cancer Research next month.
We remind investors that Keytruda was the first anti-PD-1 therapy to gain approval in the U.S. last year for the treatment of patients suffering from unresectable or metastatic melanoma and whose disease progressed after treatment with Yervoy and a BRAF inhibitor, if the BRAF V600 mutation is positive.
Approval for the first-line treatment of melanoma would give Keytruda access to an expanded patient population and increase the commercial potential of the drug.
We note that Keytruda registered sales of $50 million in its first quarter in the market. Merck continues to work on expanding Keytruda’s label further and is currently planning to seek FDA approval for an advanced non-small cell lung cancer indication in the middle of this year.
Merck carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Acorda Therapeutics, Inc. ACOR and Novo Nordisk NVO. While Acorda is a Zacks Rank #1 (Strong Buy) stock, Novo Nordisk holds a Zacks Rank #2 (Buy).
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