Can Merck Grow Without A Megamerger?

Even a batch of new drugs may not be enough

For a stock that was once an icon for investors and a company that's arguably the premier drug-discovery juggernaut, Merck isn't getting much respect. Drug stocks trade at almost 29 times 1999 earnings, but Merck & Co.'s price-earnings ratio is only about 26, even after a recent runup. The reason: Wall Street expects a big slowdown in Merck's growth rate after 2000 as a number of its drugs go off patent and lose a lot of sales to cheaper generic versions.

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