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Merck, Novartis in Line for Key FDA Approvals This Month

Among the others seeking approval are Argenx and Calliditas

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Dec 02, 2021
Summary
  • Analysts bullish about prospects for the two smaller companies.
  • Merck’s Keytruda on pace to become world’s best-selling medication.
  • Novartis hopes cholesterol treatment performs better in U.S.
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As 2021 winds down, investors may want to keep an eye on several drug companies that hope to get key approvals from the Food and Drug Administration before the year is out. Among the pharmas hoping to get their treatments green-lighted are Argenx SE (

ARGX, Financial), Calliditas Therapeutics AB (CALT, Financial), Merck & Co. Inc. (MRK, Financial) and Novartis (NVS, Financial).

The decision likely to have the biggest impact is on Argenx and its medication to treat myasthenia gravis, a neurological condition that causes certain muscles to weaken progressively. The Netherlands-based company’s medication is likely to be approved, but it’s not certain how extensive the uses for it will be granted.

If approved, the Argenx drug will be the first of its type to enter the market, but it will be pitted against several agents vying for a share of the business, including those from UCB SA (

XBRU:UCB, Financial), and further down the line a treatment Johnson & Johnson (JNJ, Financial) obtained in its $6.5 billion purchase of Momenta last year.

Perhaps anticipating a go-ahead from the FDA, investors bid up shares of Argenx more than 4.5% to nearly $297 Thursday, giving it a market cap of more than $15 billion. In the past year, the stock has traded as high as $382. The company is rated a buy or strong buy by the five analysts offering their opinion, according to Yahoo Finance.

The FDA is also expected to render a final decision soon on Calliditas’ treatment for a type of neuropathy best known as Berger’s disease, an immune response that affects the kidneys, according to the National Kidney Foundation. The Calliditas medication could become the first approved therapy for the disease, although a competitor is expected soon from Travere Therapeutics Inc. (

TVTX, Financial).

Stockholm-based Calliditas could welcome news that might boost its shares, which have traded between about $15 and nearly $35 in the past year and now stand at about $18. Analysts see substantial upside given they have assigned an average target price of $52.

In the case of Merck, the rich could get richer if the FDA approves the company’s blockbuster cancer drug Keytruda for an additional indication that could see its target adjuvant melanoma market doubled, according to Evaluate. Adjuvant cancer therapy is additional treatment given after the primary treatment for melanoma, usually surgery, to cut the risk of melanoma returning.

Keytruda is on pace to hit $17 billion in sales this year and is on the cusp of becoming the best-selling drug in the world, according to Axios.

Novartis, meanwhile, is keeping its fingers crossed that it gets a favorable FDA ruling on its cholesterol-lowering drug Leqvio. The company can only hope the drug has a faster uptake in the U.S. than it did in Europe, where sales in the first nine months after approval were a disappointing $9 million.

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I am/we are Long JNJ
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