Question

Merck: Morningstar's Analysis

Bulls Say

• Keytruda looks best positioned in the immuno-oncology landscape, buoyed by a firstmover advantage in the important indication of first-line non-small-cell lung cancer.

• Merck's key drug Januvia looks potentially safer than other diabetes drugs, and a followon combination with an SGLT2 drug should drive future growth.

• Merck supports a strong dividend yield that looks secure based on a wide diversified portfolio of drugs.

Bears Say

• The launch of biosimilar competition to immunology drug Remicade should continue to cause a drag on overall growth.

• While the majority of the patent losses are behind the company, several major products are facing generic competition over the next couple of years, including Zetia and Vytorin.

• Merck's lack of internal combination drugs with Keytruda could limit the potential of Keytruda in some cancer indications.

Refer to the Bulls & Bears attachment and the comments relative to your company. Summarize these. You might want to refer to these comments in your recommendations as well, if you feel that any of those are significant enough to influence your investment decision.  

Answer 1

Returns are the most important factor that determines the decision of investment.

In this case of investing in the medicine industry this to be seen that what medicine is already in the market and how well the medicine is placed in the market.

In this case Keytruda is a well-positioned medicine and this will be difficult to enter in this medicine field.

So in the investment decision this is imporatnat that the medicine line should be selected that has good combinations with the exiting medicines and gives high yield in dividends