Merck’s $14 Billion Market-Value Plunge Is More Than Last Quarter’s Revenue

(Bloomberg) -- Merck & Co.’s two-day slump has cost the drugmaker almost $14 billion in market value, more than the $11.8 billion it reported in second-quarter revenue.

The shares fell as much as 5.5% on Tuesday before trimming losses, adding to a 3.6% decline in the prior session. Merck has been one of the worst performers as investors flee the pharmaceutical sector amid political risks and a rotation out of high-flying stocks. The company’s top-selling cancer treatment, Keytruda, and diabetes medicine Januvia are among those at risk from House leader Nancy Pelosi’s “scary” new plan to cut drug prices, according to Evercore ISI analyst Michael Newshel.

While other drugmakers have a larger exposure to Medicare, Merck has been one of the most popular names for pharma investors and has fallen victim to the broader unwinding of positions as investors shift to value stocks, Jefferies health strategist Jared Holz said. The iShares Edge MSCI USA Momentum Factor exchange-traded extended losses for a third day, falling as much as 2.2%.

Despite the sell-off this week, Merck remains up 6% for the year and is the top performing large pharma stock in the U.S., according to data compiled by Bloomberg.

To contact the reporter on this story: Tatiana Darie in New York at tdarie1@bloomberg.net

To contact the editor responsible for this story: Catherine Larkin at clarkin4@bloomberg.net

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