I follow quite a lot of companies, so the usefulness of a watchlist to me cannot be overstated. Without my watchlist, I’d be unable to keep up on my favorite sectors and see what’s really moving the market. Even worse, I’d be lost when the time came to choose which stock I’m buying or shorting next.
Today is Watchlist Wednesday, so I’m discussing three companies that have crossed my radar in the past week — and at what point I may consider taking action on these calls with my own money. Keep in mind that these aren’t concrete buy or sell recommendations, nor do I guarantee I’ll take action on the companies being discussed. What I can promise is that you can follow my real-life transactions through my profile and that I, like everyone else here at The Motley Fool, will continue to hold the integrity of our disclosure policy in the highest regard.
This week I thought it’d be fun to be a bit health-care-centric!
Merck & Co., Inc. (NYSE:MRK)
Merck & Co., Inc. (NYSE:MRK) may be a gigantic, low-beta pharmaceutical company that you usually glance right over when scanning for income and value plays, but chances are you haven’t kept up on two exciting developments that could help reignite its growth engine.
To begin with, the annual American Society of Clinical Oncology meeting in Chicago this past week shed light on a new class of immunotherapy drugs known as PD-1 inhibitors that suppress a protein suspected to be crucial to tumor growth. Heading into this meeting all eyes were on Bristol Myers Squibb Co. (NYSE:BMY)‘s Nivolumab — and for good reason. In early-stage trials, the combination of Bristol Myers Squibb Co. (NYSE:BMY)’s FDA-approved Yervoy and Nivolumab produced an overall response rate of 40% in advanced melanoma. The real surprise, though, came from Merck & Co., Inc. (NYSE:MRK) with its anti-PD-1 drug Lambrolizumab, which delivered an equally impressive overall response rate of 38% in advanced melanoma. There are still a lot of trials left to be run, but these ORRs are phenomenal. Having already received the designation of “breakthrough therapy” from the Food and Drug Administration, Lambrolizumab should be enough to get Merck & Co., Inc. (NYSE:MRK) investors excited.
However, Merck & Co., Inc. (NYSE:MRK) shareholders don’t have to wait years before a potential blockbuster drug reaches the market. Investigational osteoporosis drug odanacatib is currently under safety and efficacy review by Merck with a new drug application expected to be filed by 2014. Odanacatib was so effective at reducing fracturing in late-stage trails that outside monitors stopped the trial early. With peak sales potential of $3 billion, according to Leerink Swann, Merck could be basking in a big sales boost sooner than later. To sum up, get Merck on your watchlist now!
Clovis Oncology Inc (NASDAQ:CLVS)
Welcome to fantasyland; population: Clovis Oncology Inc (NASDAQ:CLVS) shareholders! As my Foolish colleague and health care analyst David Williamson pointed out this week, shareholders enjoyed the best possible perk of biotech ownership Monday based on ASCO data — a daily double. Clovis Oncology Inc (NASDAQ:CLVS) shares exploded higher as both its Rucaparib study of solid tumors, and CO-1686 for EGFR-mutant non-small-cell lung cancer, demonstrated strong early-stage results.