The Food and Drug Administration (FDA) has approved pharmaceutical company Merck’s (NYSE:MRK) new vaccine, Capvaxive. This pneumococcal conjugate vaccine is designed to prevent invasive disease and pneumonia in adults. This approval strengthens Merck’s portfolio and will likely enhance its competitive position in the vaccine market.
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Merck stock is up about 1.1% in today’s pre-market session.
Capvaxive: A Strategic Asset for Merck
Capvaxive is considered a strategic asset for Merck, driving its share in the pneumococcal conjugate vaccine market. Capvaxive offers protection against 21 strains of the bacteria and promises broader protection compared to existing market options.
Given Capvaxive’s superior coverage, it could take share from Pfizer’s Prevnar 20, which is currently dominating the pneumococcal conjugate vaccine market.
Furthermore, Capvaxive is likely to bolster Merck’s revenue, helping to mitigate the expected decline in sales of Keytruda, its flagship cancer drug, which is set to lose exclusivity in the U.S. in 2028.
CDC to Determine Capvaxive’s Commercial Roadmap
Although FDA approval is crucial, the Centers for Disease Control and Prevention (CDC) will play a pivotal role in Capvaxive’s commercial success. The company said that the CDC will meet later this month to determine the eligibility criteria for the vaccine, which will define its commercial roadmap.
If the CDC expands the age bracket for Capvaxive’s usage, the vaccine could see rapid adoption, significantly boosting Merck’s market penetration and revenue from this new product.
Is Merck a Good Stock to Buy?
Merck stock has gained about 18% year-to-date, outperforming the broader markets. Moreover, Wall Street is bullish about its prospects.
Merck stock has 16 Buys and two Hold recommendations for a Strong Buy consensus rating. The price target for MRK stock is $145.08, implying 13.79% upside potential from current levels.
