Merck Paid $208 Million to Stop Its Drugs From Working. Here's Why That's Bullish.
In biopharma, it sometimes makes sense for companies to spend a lot of money on buying or developing technical capabilities that seem to be counterproductive at first glance. For instance, on April 5, Merck (NYSE: MRK) spent $208 million to acquire a business called Abceutics, which is developing a technology to nullify the effects of certain medicines that Merck is heavily invested in producing.
Buying Abceutics is bullish for Merck, because in this context, stopping the drugs from working is a key capability that'll help to differentiate any future products from the competition. Here's why.
To fully appreciate why Merck's purchase of Abceutics is a positive sign for the stock, it's necessary to understand what Abceutics actually offers for its pipeline, which requires a quick discussion of the relevant science.
Source Fool.com
Merck KGaA Stock
Currently there is a rather positive sentiment for Merck KGaA with 3 Buy predictions and 1 Sell predictions.
On the other hand, the target price of 146 € is below the current price of 149.2 € for Merck KGaA, so the potential is actually -2.14%.
