The morning after the Merck annual business briefing, the analyst reviews are pouring in. For the most part, the ones that I've received at least, say it had a good beat. Only Sanford C. Bernstein's Tim Anderson says he can't dance to it. He titles a research note to clients, "Annual Business Review Uneventful--No Real Surprises, Positive Or Negative."
But Miller Tabak's Les Funtleyder says, "We continue to believe the fundamentals at MRK are solid and the valuation attractive and reiterate buy." Leerink Swann's Seamus Fernandez writes, "…our confidence remains high that MRK will outperform in '08." And Jim Kelly at Goldman Sachs is raising his earnings per share estimates (by as much as 28 cents in 2012) and his price target from $59 (it's already above that) to $62 (it pushed toward that level late last week). Kelly cites "executional excellence".
A part of Bernstein owns at least one percent of MRK shares, Leerink trades in MRK. GS has done and wants to do more banking for MRK and makes a market in it.
I also wanted to add a little color from the meeting that I didn't have time to get on the air or in the blog yesterday. Because it was "Fed Day" my CNBC reports had to be very tight with the exception of the live interview with Mr. Clark.
And speaking of that interview, check out what happened intra-day yesterday to shares of Biogen Idec right about the time I asked Clark whether he'd taken a look at the biotech company, which has put itself up for sale, and whether Merck is bidding on it. He really didn't say anything that would lead me to believe that's the case--not that he ever would tip his hand anyway, but investors maybe sensed something in his body language because all of a sudden BIIB spiked.
Then again, it could just be coincidence and maybe there was some other rumor floating around. Later during the q. and a. session with analysts he was a little more candid about a potential big biotech acquisition. Clark made it clear that he's "aggressively looking" at biotech companies and even though he said Merck has the wherewithal he refuses to overpay. Then, he added, "Am I disappointed we haven't been able to do it (a deal) so far? The answer is 'yes'."
And one other interesting item. In his presentation, the former Merck General Counsel, Ken Fraizer, who's now in charge of Global Human Health announced the company is starting a pilot-program experiment with 700 Merck sales reps in the upper Midwest to possibly change the way it sells meds to docs. Merck is cutting the number of reps who call on a physician to sell the very same drug from four a few years ago to just one within the next year or so. That's to save money and in response to doctor pushback. Many other big pharmas are getting rid of a lot of reps, too.
Frazier repeatedly said a lot of competitors talk the talk, but he claimed no one's walking the walk in terms of changing their sales models to become "more customer focused" as he put it. Still--and maybe this is for competitive reasons--Fraizer didn't give any specific details yesterday about the experiment.
But in probably his most colorful comment to the crowd yesterday Frazier said in reference to "physician detailing" as its called in the biz, "…we are outspent, we are out manned and we are out shouted. But it's not muscle that wins anymore. It's having good drugs and being smart about how you promote them."
Merck shares hit another new multi-year high in early trading this morning of $61.62, but have already given it back. When it comes to Merck, investors are perhaps still playing "Rate-a-Record".
Questions? Comments? Pharma@cnbc.com