Key Points Novo Nordisk could see stronger financial results this year thanks to new launches and label expansions. Merck's clinical progress this year could show that it will expertly overcome a major upcoming patent cliff. 10 stocks we like better than Novo Nordisk › The healthcare sector lagged broader equities last year. Novo Nordisk (NYSE: NVO) and Merck (NYSE: MRK), two pharmaceutical leaders, were among the underperformers. But here's the good news: There are solid reasons to think the two l ...

Core Insights - GSK plc has entered into a definitive agreement to acquire RAPT Therapeutics for an estimated equity value of $2.2 billion, which will enhance GSK's pipeline with RAPT's ozureprubart, a long-acting anti-IgE monoclonal antibody currently in phase IIb study for food allergy protection [1][6]. Company Summary - The acquisition is expected to close in the first quarter of 2026 and will strengthen GSK's respiratory, immunology, and inflammation pipeline [2][6]. - GSK will pay $58.00 per share to RAPT's shareholders, resulting in an upfront investment of $1.9 billion after accounting for cash acquired [4][6]. - GSK will gain global rights to the ozureprubart program, excluding certain regions in Asia, and will be responsible for success-based milestones and royalties to RAPT's partner [7]. Product Development - Ozureprubart is currently being evaluated in a phase IIb study for prophylactic protection against food allergens, with data expected in 2027 and phase III studies planned for at-risk adult and pediatric populations [8]. - The product is anticipated to enhance GSK's commercial presence in the allergy space, offering potentially less frequent dosing compared to current treatments [9]. Industry Context - The biotech and pharma sector is experiencing a surge in merger and acquisition activity as companies seek to diversify revenue streams amid declining sales of flagship drugs [10]. - Recent notable acquisitions in the industry include Merck's acquisition of Cidara Therapeutics for approximately $9.2 billion and J&J's acquisition of Halda Therapeutics for $3.05 billion, indicating a trend towards portfolio expansion and innovation [11][12].

Core Insights - Merck (MRK) is in discussions to acquire Revolution Medicines (RVMD), with a potential valuation of up to $32 billion, although the deal is not yet finalized and may take several weeks to conclude [1][7] - RVMD's shares surged approximately 36% this week, reaching an all-time high of $105 per share following acquisition rumors, with a market capitalization of $20 billion [3] - The acquisition would enhance Merck's oncology pipeline by adding RVMD's lead candidate, daraxonrasib, which targets RAS mutations in cancers [6][10] Company Developments - Merck's shares have increased by 11.2%, but this is below the industry average increase of 21.0% [4] - The acquisition of RVMD is part of Merck's strategy to bolster its portfolio ahead of the patent expiration of its key drug, Keytruda, in 2028, which currently accounts for over 50% of its pharmaceutical sales [10][14] - Merck has been actively pursuing acquisitions, including the recent purchase of Cidara Therapeutics for $9.2 billion and Verona Pharma for around $10 billion, to diversify its offerings and mitigate revenue loss from Keytruda [12][13] Industry Context - Revolution Medicines is developing innovative drugs targeting the active form of RAS proteins, which are crucial in cancer treatment, with their RAS(ON) inhibitors designed to overcome resistance mechanisms seen in existing therapies [2][8] - The potential merger would mark a significant event in the biotech sector, being the largest deal since Pfizer's acquisition of Seagen for $43 billion in 2023 [3]

Core Viewpoint - Merck has successfully completed the cash tender offer for all outstanding shares of Cidara Therapeutics, enhancing its respiratory portfolio and aligning with its business development strategy focused on compelling science and value [2][3]. Acquisition Details - Merck acquired Cidara at a purchase price of $221.50 per share, with 27,149,333 shares validly tendered, representing approximately 85.96% of Cidara's total shares [2][3]. - The acquisition will be finalized through a merger, with Cidara becoming a wholly owned subsidiary of Merck, and its common stock will no longer be traded on the Nasdaq [3]. Financial Impact - The acquisition is expected to increase Merck's research and development expenses by approximately $9.0 billion, or about $3.65 per share, affecting both GAAP and non-GAAP results [3]. - GAAP and non-GAAP EPS are projected to be negatively impacted by approximately $0.30 per share in the first 12 months due to costs associated with advancing CD388 and financing [3]. Product Information - CD388 is a long-acting antiviral candidate designed to prevent influenza infection in high-risk individuals, with broad antiviral activity against influenza A and B viruses [5]. - CD388 is currently undergoing evaluation in the Phase 3 ANCHOR study among adults and adolescents at higher risk of complications from influenza [5]. Industry Context - Influenza affects an estimated one billion people globally each year, with severe cases leading to 290,000-650,000 deaths annually [4].

Group 1 - Cidara Therapeutics Inc. is projected to be a top performer with a 721.76% increase in 2025, driven by a merger with Merck valued at $9.2 billion [1] - The merger agreement includes Merck's subsidiary acquiring Cidara's shares at $221.50 each, representing a 108% premium over Cidara's closing price of $105.99 prior to the announcement [1] - The acquisition follows Cidara receiving a fast track designation from the FDA for its drug candidate CD388, aimed at preventing influenza in high-risk individuals [2] Group 2 - CD388 is currently in a Phase 3 study involving 6,000 participants in the US and UK, targeting individuals at higher risk of influenza complications [2] - Merck's acquisition is expected to enhance its respiratory portfolio, addressing the significant global health threat posed by influenza, particularly for older adults and immunocompromised individuals [2] - The merger is anticipated to be completed in the first quarter of 2026, pending regulatory and shareholder approvals [2]

Company Overview - Cidara Therapeutics, Inc. is a clinical-stage biotechnology company based in San Diego, California, focusing on developing innovative long-acting anti-infective therapies for serious diseases [5] - The company utilizes proprietary platforms to address unmet medical needs in infectious disease and oncology, aiming to provide differentiated therapeutic options [5] - Cidara's lead products include rezafungin acetate for invasive fungal infections and Cloudbreak platform conjugates targeting viral diseases such as influenza, RSV, HIV, and COVID-19 [8] Financial Metrics - As of November 13, 2025, Cidara's stock price was $105.99, reflecting a one-year price change of 662.52% [2][3] - The company's market capitalization is reported at $2.69 billion, with a net income of -$184.74 million for the trailing twelve months (TTM) [3] Recent Developments - HighVista Strategies LLC initiated a new stake in Cidara Therapeutics, acquiring 70,904 shares valued at $6.79 million, which constitutes 1.66% of the fund's reportable U.S. equity assets as of September 30, 2025 [1][2] - Following the announcement of Cidara's acquisition by Merck, the stock price surged to a 52-week high of $221.20 on December 3, 2025, with Merck set to pay $221.50 in cash for the acquisition [6][9] Strategic Focus - Cidara Therapeutics aims to advance novel molecules and establish collaborations to accelerate commercialization and market reach [5] - Merck's interest in Cidara is primarily driven by the potential of its influenza prevention drug candidate, CD388, which is expected to be a significant growth driver for Merck in the coming decade [9]

Core Viewpoint - The pharmaceutical giants Pfizer and Merck have underperformed in 2023, facing financial challenges and upcoming patent cliffs, leading to uncertainty in their medium-term outlooks. The article compares both companies to determine which presents a better investment opportunity heading into the new year. Pfizer - Pfizer's Eliquis, a leading blood thinner, is approaching patent expiration, which could exacerbate its already slow revenue and earnings growth [3] - The company has expanded its pipeline through internal efforts, acquisitions, and licensing deals, launching new products that are expected to impact financial results positively in the future [4] - Notable pipeline candidates include MET-097i, a promising weight loss drug with fewer side effects and a long-acting dosing schedule, and PF-4404, a cancer therapy that could become a standard treatment for certain cancers [5][7] - Pfizer is also implementing cost-cutting measures and has secured a deal with the White House to be exempt from tariffs for three years, which may help improve its margins and bottom line [8] Merck - Merck's sales from its HPV vaccines, Gardasil and Gardasil 9, have declined due to lower sales in China, and its best-selling cancer drug Keytruda faces a patent cliff by 2028 [9] - The company has introduced a new subcutaneous version of Keytruda, which offers a more convenient administration method and is expected to mitigate sales losses from biosimilars [10] - Merck's pipeline includes successful products like Winrevair for pulmonary arterial hypertension and Capvaxive, a pneumonia vaccine, both of which are expected to generate significant revenue [12][13] - An acquisition that adds CD388 to its pipeline could potentially transform the influenza vaccine market, indicating strong future prospects for Merck [13] Investment Comparison - Both Pfizer and Merck are considered viable long-term investment options, but Merck is viewed as the stronger choice due to better financial results and a more developed plan to address challenges [14][16] - Merck's higher profit margins and faster dividend growth over the past decade make it more attractive for dividend-seeking investors, despite Pfizer's higher forward dividend yield [17]

Core Viewpoint - Merck & Co., Inc. (NYSE:MRK) is experiencing positive momentum driven by its oncology drug Keytruda and strategic acquisitions, with a favorable outlook for the biopharma sector as policy concerns diminish [2][3][4]. Group 1: Stock Performance and Outlook - Morgan Stanley raised its price target for Merck to $102 from $100, maintaining an Equal Weight rating, citing an improved outlook for the biopharma sector [2]. - Merck's shares have increased by over 22% in the past six months, largely attributed to the success of Keytruda, which now represents approximately 50% of the company's revenue [3]. Group 2: Product Pipeline and Acquisitions - Merck is expanding its product pipeline, recently agreeing to acquire Cidara Therapeutics for about $9.2 billion, focusing on developing a long-acting antiviral for influenza [4]. - The antiviral product, CD388, aims to provide broader and longer-lasting protection against multiple flu strains, distinguishing itself from traditional flu vaccines [4]. Group 3: Company Overview - Merck & Co., Inc. is a global biopharmaceutical company dedicated to discovering, developing, and delivering innovative medicines, vaccines, and animal health products to improve and save lives worldwide [5].

Core Viewpoint - Merck is showing signs of recovery with a 27% stock increase over the past month, driven by strategic acquisitions and new product launches [1]. Company Developments - Merck has acquired Cidara Therapeutics for approximately $9.2 billion, focusing on the development of CD388, a long-acting antiviral drug that could provide extended protection against influenza [4][5]. - The company is also launching Winrevair, which generated $360 million in sales in the third quarter, indicating a strong annual run rate of over $1 billion [8]. - Another product, Capvaxive, a pneumonia vaccine, is performing well with $244 million in sales in the third quarter, nearing the $1 billion annual run-rate mark [9]. - Merck has received approval for a subcutaneous formulation of Keytruda, which will maintain patent protection for a longer period and offers advantages in administration [10]. Market Performance - Merck's third-quarter revenue increased by 4% year over year to $17.3 billion, although concerns remain about future sales due to increasing competition for Keytruda [11]. - The company has a market capitalization of $250 billion, with a current stock price of $99.83 and a dividend yield of 3.21% [8][13]. - Merck has increased its dividend payouts by 93.8% over the past decade, positioning itself as a strong blue-chip dividend stock [13].

Financial Data and Key Metrics Changes - The company anticipates a greater than $5 billion commercial opportunity starting at the end of the decade, escalating into the early 2030s [10] - The influenza season last year saw 1.6 million hospitalizations, indicating a significant unmet medical need [9] Business Line Data and Key Metrics Changes - The CD388 drug shows 76% efficacy in the chosen dose for phase three, outperforming traditional flu vaccines [5][6] - Ohtuvayre, acquired from Verona, is expected to significantly scale up the company's commercial efforts in treating COPD, with excellent feedback from the market [17][18] Market Data and Key Metrics Changes - Approximately 110 million people in the U.S. are expected to be candidates for CD388 treatment, with 85 million being high-risk or immunocompromised individuals [7][9] - The company is seeing positive uptake in the pulmonary arterial hypertension (PAH) market, with WINREVAIR meeting high expectations [28][29] Company Strategy and Development Direction - The company is focusing on expanding its respiratory portfolio and leveraging its commercial engine to maximize the potential of newly acquired products [17][20] - There is a strong emphasis on addressing unmet needs in various therapeutic areas, including COPD and pulmonary hypertension, with plans for phase three trials in the near future [21][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the significant unmet need in the influenza treatment space and believes CD388 will provide a compelling value proposition [10] - The company is optimistic about the future of its immunology pipeline, with multiple indications expected to show promising results in the coming years [66][67] Other Important Information - The company is preparing for the launch of an oral PCSK9 inhibitor, which is expected to improve access and adherence to cholesterol-lowering therapies [46][47] - The vaccine portfolio, including Gardasil, is expected to see modest growth despite challenges in certain markets [54][55] Q&A Session Summary Question: Insights on the Cidara deal and its growth opportunity - Management highlighted the high unmet medical need for influenza treatment and the strain-agnostic efficacy of CD388, which is expected to protect high-risk populations [5][6][10] Question: Commercial approach for CD388 and payer context - The company plans to include both vaccinated and unvaccinated high-risk individuals in the phase three program, with research indicating a price point of $500 to $600 per dose would be acceptable to payers [12][13] Question: Updates on Ohtuvayre and its market potential - Management expressed confidence in Ohtuvayre's potential, citing excellent feedback from customers and a significant opportunity to scale its commercial efforts [17][18] Question: Future steps for WINREVAIR and phase three trials - The company plans to start phase three trials next year, focusing on the design to meet regulatory expectations and payer requirements [24][25] Question: Expectations for the oral PCSK9 program - Management believes the oral PCSK9 will provide robust LDL lowering and improve access for patients, potentially changing treatment guidelines [46][47] Question: Updates on the vaccine portfolio and Gardasil - The company anticipates modest growth for Gardasil and is optimistic about the launches of new vaccines like CAPVAXIVE [54][58]