UPDATE: BMO Capital Markets Lowers PT on Merck Following New SGLT2 Data

In a report published Monday, BMO Capital Markets analyst Alex Arfaei reiterated an Outperform rating on Merck MRK, but lowered the price target from $54.00 to $52.00.

In the report, BMO Capital Markets noted, “New data from SGLT2 drugs presented at the ADA and supporting expert feedback lead us to believe that these drugs will compete directly with DPPIV inhibitors like Januvia for the post metformin type-2 diabetes patients. The SGLT2s have shown similar, if not better glycemic control compared with DDP-IVs. Moreover, they have low risk for hypoglycemia and typically produce 2-3Kg weight loss and modest blood pressure reduction. Thus, we believe SGLT2s will benefit more from lower use of sulfonylureas (SUs). The risk of genital infections (8-14%) with SGLT2s can be mitigated by patient education, and is clinically manageable. Finally, the SGLT2s are insulin independent and should not be associated with acute pancreatitis.”

Merck closed on Friday at $47.00.