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Merck & Co. Inc. (MRK) Opens in Green Amid FDA Rejection Related to Diabetes Drugs

Merck & Co. Inc. (NYSE:MRK) entered the markets on April 7 in green, amid a thumbs down from the U.S. Food and Drug Administration on its request to add labels to diabetes drugs informing users that they are not linked to higher risk of heart problems. Merck shares opened 0.09% up to $63.29, as of 9.47 am.

The pharmaceutical company, with a market cap of $173.66, billion asked the FDA to add the labels to its Januvia and Janumet diabetes drugs which raked in $6 billion in 2016. The request was made following 2015 studies conducted on 14,724 patients with type 2 diabetes and a history of heart disease. The results showed no increase in risks to heart problems, like heart failure, Reuters reported April 7.

wavebreakmedia/Shutterstock.com

wavebreakmedia/Shutterstock.com

What Does The Smart Money Sentiment Say?

We saw a decline in trust of Merck shares quarter over quarter. Out of 742 funds that Insider Monkey tracks, 78 funds kept their shares amounting to $2.78 million in the fourth quarter of 2016, a decrease from 84 funds who held shares worth $3.85 billion on the third quarter of the same year. Ken Fisher of Fisher Asset Management saw a slight decrease in shares of Merck & Co. Inc. (NYSE:MRK) by 1% as of December 2016. Fisher holds 6.8 million shares worth $400 million.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

The Bottom Line

Shares of Merck & Co. Inc. (NYSE:MRK) are on the spotlight after the company was refused to place labels on their diabetes drugs to show they do not raise the risk of heart problems. Shares of the company are currently trading on the upper end of its 52-week range. To place a lighter tone on this article, what about checking out the 11 most popular songs about drugs?

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