Morning Bell With Jim Cramer: Reviewing the Merck Acquisition

Jim Cramer shares insights about the Merck acquisition, CVS challenged by Amazon entering the pharmacy-delivery space, and Regeneron FDA approval.

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In the last episode of Mad Money, Jim Cramer said we're starting to see a glimpse of what the post-COVID world will look like and it looks fantastic.

TheStreet's Katherine Ross and Cramer are talking about the Merck acquisition, CVS challenged by Amazon entering the pharmacy-delivery space, and Regeneron FDA approval.

Merck Stock: Buy or Sell?

Merck & Co  (MRK) - Get Report said Monday that it will pay $425 million for OncoImmune, a privately held biotech that has developed a promising treatment for patients suffering a severe form of COVID-19.

Rockville, Maryland-based Oncolmmune published late-stage data from a phase 3 trial evaluating its lead therapeutic candidate, CD24Fc, in September that showed a 60% higher probability of improvement for patients suffering severe or critical COVID-19 when compared to placebo. The risk of death or respiratory failure was also reduced by more than 50%, Oncolmmune data indicated.

Cramer said that the stocks that he considered “quandary” are Merck and Johnson & Johnson  (JNJ) - Get Report. He added that people were not thrilled about the Merck acquisition as they have been waiting for a medication that could get them out of the hospital in case they get COVID-19.

CVS Stock: Buy or Sell?

CVS Health  (CVS) - Get Report, Walgreens  (WBA) - Get Report, and Rite Aid  (RAD) - Get Report have been all under pressure on the news that Amazon  (AMZN) - Get Report is entering the pharmacy-delivery space.

CVS Health and Walgreens are two of the biggest players in the space and are each down more than 8% on the day.

Bulls will argue the obvious, which is that both stocks trade at low valuations — Walgreens trades at 8.5 times this year’s earnings estimates while CVS trades at 9 times — and both pay nice dividends.

Cramer said that people’s hands are in the fate of CVS “until the present clarifies.”

Regeneron Stock: Buy or Sell?

The Food and Drug Administration granted over the weekend an emergency use authorization for Covid-19 treatments by Regeneron  (REGN) - Get Report casirivimab and imdevimab -- which the authority says can now be given together to treat mild to moderate disease in people older than age 12.

“The emergency authorization of these monoclonal antibodies administered together offers health care providers another tool in combating the pandemic,” said Dr. Patrizia Cavazzoni, acting director of the FDA’s Center for Drug Evaluation and Research, in a press statement.

Cramer said that Regeneron is the drug you get if you get COVID-19 but there is no indication that they can do it at scale and which will cause an allocation due to unclear distribution.

“The optimism that is coming from the vaccine world I think is too great and if you are buying stocks, for now, you’re really buying for the fall of next year and as long as you have that patience then you’re in good shape,” he added.

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