Merck & Co. (MRK, Financial)
Merck has the second largest research budget of the major pharmaceutical companies. Oncology sales continue to grow over 26%. The company is refocusing on vaccines, hospital acute care, animal health and oncology. They are spinning off the biosimilars, woman's health and legacy brands into a new company called Organon. Merck estimates that the pandemic has so far negatively impacted revenue by over $2 billion due to reduced access to health care providers and reduction in demand for some of their vaccines. Despite these headwinds, they are on track for full-year revenue growth and a robust oncology and virology pipeline. Merck trades at a very cheap 13 times earnings, almost a 40% discount to the overall market. I first bought Merck in 1983 during the personal computer IPO frenzy where more than 30 personal computer companies went public. Over 90% failed to survive, yet Merck with a heavy emphasis on R&D is still going strong.
From Jeff Auxier (Trades, Portfolio)'s Auxier Asset Management fourth-quarter 2020 shareholder letter.
