What Happened?
Shares of global pharmaceutical company Merck (NYSE:MRK) jumped 7.7% in the afternoon session after the Trump administration announced a new program to sell drugs directly to consumers.
The move was seen as bringing certainty to the industry, sparking a broad rally among healthcare and pharmaceutical stocks in both the U.S. and Europe. The plan includes a drug-buying website for consumers and a pricing deal with Pfizer. Following the news, the Stoxx Europe 600 Health Care index jumped as much as 3.1%. Merck was among several major drugmakers to benefit, alongside other companies like Pfizer, Eli Lilly, Roche, and AstraZeneca, which all saw significant gains as the announcement appeared to reduce investor uncertainty within the sector.
The shares closed the day at $90.13, up 7.4% from previous close.
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What Is The Market Telling Us
Merck’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 5.7% on the news that the company announced positive results from its Phase 3 HYPERION trial for its drug, WINREVAIR™ (sotatercept-csrk). The study evaluated the drug in recently diagnosed adults with pulmonary arterial hypertension (PAH). Results showed WINREVAIR, when combined with existing treatments, reduced the risk of clinical worsening events by 76% compared to a placebo. These events included death from any cause, unplanned hospital stays related to PAH, or other forms of disease deterioration. The successful trial findings were presented at the European Respiratory Society Congress and simultaneously published in the New England Journal of Medicine, highlighting the significance of the results.
Merck is down 9% since the beginning of the year, and at $90.22 per share, it is trading 21.4% below its 52-week high of $114.74 from September 2024. Investors who bought $1,000 worth of Merck’s shares 5 years ago would now be looking at an investment worth $1,105.
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