....... Merck's patent expirations and relatively unexciting pipeline are a problem that should not be ignored by investors. The company is now trading at a P/E of 22.68, which is quite high. Compare this to rival Pfizer (PFE) trading at a P/E of 16.55, or Johnson & Johnson (JNJ) at 15.15. Let us take a closer look at the patents and conditions of Merck's best-selling drugs:
Singulair (Asthma, allergies) - Expiration on February 3rd of 2012: As mentioned before, this is their #1 drug which is a leader in both asthma and allergy medication markets. Their loss of exclusivity in 2012 will be bad news for the company.
Remicade/Infliximab (Anti-Inflammatory drug) - Expires in 2018 (Technically held by JNJ): Johnson & Johnson holds the rights to this best-selling drug in Central and South America, Asia Pacific, the Middle East and Africa. Nonetheless, Merck retains its marketing rights in other areas, but losing the market share and patent to JNJ does affect the drug's prospects.
Isentress/Raltegravir (HIV-1 inhibitor) - Expires in distant future, October 2022: Obviously nothing for Merck to worry about in the near future
Januvia (Diabetes) - Expires in the distant 2017: Once again, the expiration date is so far into the future that the pipeline will have ample time to create something new or better to treat diabetes.
Singulair (Asthma, allergies) - Expiration on February 3rd of 2012: As mentioned before, this is their #1 drug which is a leader in both asthma and allergy medication markets. Their loss of exclusivity in 2012 will be bad news for the company.
Remicade/Infliximab (Anti-Inflammatory drug) - Expires in 2018 (Technically held by JNJ): Johnson & Johnson holds the rights to this best-selling drug in Central and South America, Asia Pacific, the Middle East and Africa. Nonetheless, Merck retains its marketing rights in other areas, but losing the market share and patent to JNJ does affect the drug's prospects.
Isentress/Raltegravir (HIV-1 inhibitor) - Expires in distant future, October 2022: Obviously nothing for Merck to worry about in the near future
Januvia (Diabetes) - Expires in the distant 2017: Once again, the expiration date is so far into the future that the pipeline will have ample time to create something new or better to treat diabetes.