Merck ruling contesting IRA could drive sector rally, says Citi

Citi analyst Andrew Baum assigns a “non-zero probability” that Judge Colleen Kollar-Kotelly of the U.S. District Court of Columbia will issue either a declaratory relief or even a preliminary injunction in favor of Merck (MRK) in the response to its motion for summary judgement contesting the Inflation Reduction Act. The firm anticipates a ruling as early as Q1 of 024. In the event the Judge rules in favor of Merck, the global pharmaceutical sector should rally, notably Merck and Bristol-Myers (BMY), to reflect diminished risk to industry returns and earnings, the analyst tells investors in a research note.