Chicago, IL – March 3, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Millipore Corporation (MIL), Merck & Company (MRK), General Dynamics (GD), Lockheed Martin Corp. (LMT) and Raytheon Co. (RTN).

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Here are highlights from Tuesday’s Analyst Blog:

Merck KGaA Buys Millipore

Millipore Corporation (MIL), a leading life science company, and Merck KGaA, the Germany-based pharmaceutical and chemicals company, entered into a definitive agreement under which Merck will acquire all outstanding shares of common stock of Millipore for US$107 per share in cash, or a total transaction value, including net debt, of approximately €5.3 billion (US$7.2 billion).

MercK KGaA, also called the German Merck or Merck Dermstadt is one of the oldest chemical and pharmaceutical companies in the world. The company lost its foreign assets following the First World War, including its U.S. subsidiary that eventually became Merck & Company (MRK). Since Merck & Company holds the rights to the Merck name in the U.S., Merck KGaA operates here under the name EMD Chemicals (EMD stands for Emanuel Merck, Dermstadt). Merck KGaA was privately owned until 1995 when it went public in Germany. However, the Merck family remains its controlling shareholder.

The transaction was approved by the boards of directors of both companies. Millipore and Merck will create a €2.1 billion (US$2.9 billion) world-class partner in the life science sector, achieving significant scale in high-margin specialty products with an attractive growth profile.

Together, Millipore and Merck will have a significant presence in high-growth segments and an enhanced geographic presence. Combining the research and development capabilities of both companies will create a powerful innovation platform to develop cutting-edge technologies that are tailored even more closely to the needs of customers.

General Dynamics Wins Contract

General Dynamics’ (GD) wholly-owned subsidiary – General Dynamics NASSCO, has been awarded an $824.6 million contract by the U.S. Navy for the construction of two T-AKE dry cargo-ammunition ships.

Construction of the two ships is scheduled to begin in the second and fourth quarters of 2010, respectively. NASSCO expects to deliver both ships to the Navy's Military Sealift Command in 2012.

General Dynamics NASSCO has the only full-service ship construction and repair yard on the West Coast of the U.S. The shipyard delivered its ninth T-AKE ship on February 24 and is currently building the tenth through the twelfth ship of the class.

General Dynamics’ total backlog was $65.5 billion at fiscal-end 2009, reflecting an increase mainly in both the Aerospace and Combat Systems segments.

Headquartered in Falls Church, VA, General Dynamics is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and information systems and technologies. The company operates through four business segments − Information Systems & Technology, Combat Systems, Marine Systems, and Aerospace. Its major competitors are Lockheed Martin Corp. (LMT) and Raytheon Co. (RTN).

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MercK KGaA, also called the German Merck or Merck Dermstadt is one of the oldest chemical and pharmaceutical companies in the world. The company lost its foreign assets following the First World War, including its U.S. subsidiary that eventually became Merck & Company  (MRK). Since Merck & Company holds the rights to the Merck name in the U.S., Merck KGaA operates here under the name EMD Chemicals (EMD stands for Emanuel Merck, Dermstadt). Merck KGaA was privately owned until 1995 when it went public in Germany. However, the Merck family remains its controlling shareholder.

The transaction was approved by the boards of directors of both companies. Millipore and Merck will create a €2.1 billion (US$2.9 billion) world-class partner in the life science sector, achieving significant scale in high-margin specialty products with an attractive growth profile.
 
Together, Millipore and Merck will have a significant presence in high-growth segments and an enhanced geographic presence. Combining the research and development capabilities of both companies will create a powerful innovation platform to develop cutting-edge technologies that are tailored even more closely to the needs of customers.
 
The acquisition will be funded through available cash and a term loan provided by Bank of America, Merrill Lynch, BNP Paribas and Commerzbank Aktiengesellschaft. Merck plans to replace part of the facility by issuing bonds later. Merck is committed to retaining a solid investment-grade rating.
 
Millipore has a strong position in the attractive bioresearch and bio-production segments, offering a comprehensive range of products, technologies and services for pharma and biotech companies, as well as for academia, to improve laboratory productivity and develop and optimize manufacturing processes.
 
Millipore has been continuously transforming itself into a life science leader by driving innovation, entering new markets and generating exceptional operational performance. In 2009, Millipore generated sales of US$1.7 billion, with around 6,000 employees in more than 30 countries. The transaction is expected to be completed by the second half of 2010.

We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.

CRYSTAL is a multi-national study conducted by Merck KGaA. Erbitux, when added to Folfiri (a chemotherapy regimen) increased median overall survival to 19.9 months in an intent-to-treat population of first-line metastatic colorectal cancer (mCRC) patients compared to 18.6 months in the recipients of Folfiri only.

Moreover, when studied in a subset of mCRC patients with normal or wild-type version of a gene called KRAS, the median overall survival increased to 23.5 months in patients who received Erbitux plus Folfiri as against 20 months for those who took Folfiri alone.

The other study, COIN, was conducted in the UK by the Medical Research Council. The study did not find any overall survival benefit in combining Erbitux with chemotherapy as a first-line treatment for metastatic colon cancer patients having a particular genetic profile. The overall survival was 17 months in the Erbitux arm compared to 17.9 months for just chemotherapy.

Erbitux was tested in both the studies as a primary treatment for metastatic colorectal cancer. The drug is currently approved as a secondary treatment for colorectal cancer. It has also been approved for treating head and neck cancers.

The market for epidermal growth factor receptor drugs is currently dominated by Erbitux. Drugs in this class block a protein (epidermal growth factor), which facilitates cancer cell growth. Erbitux’s 2008 sales came in at $1.6 billion, about 10 times more than Amgen’s (AMGN) Vectibix. Both drugs compete with Roche's Avastin that blocks blood supply to tumors.

In the trial, Vectibix significantly improved progression-free survival (PFS) in patients with tumors containing a specific gene known as KRAS. Tumor KRAS status was confirmed in 91% of the 1,186 patients enrolled in the trial, the highest number ever reported for a second-line trial.

The combination treatment of Vectibix and Folfiri achieved the co-primary endpoint by improving the median PFS by 2 months (5.9 months versus 3.9 months) compared to Folfiri alone. The combination also showed significant improvement (35% versus 10%) in tumor response rate in patients. However, even though the median overall survival was numerically better (14.5 months versus 12.5 months), it did not achieve statistical significance for Vectibix.

Amgen is also looking at Vectibix as a first-line treatment option. A study known as PRIME showed patients had a 1.6-month benefit for progression-free survival when treated with Vectibix as a first-line therapy.

Colorectal cancer is the fourth most common cancer in men and the third most common cancer in women worldwide. With more than 630,000 deaths worldwide per year, it is the second leading cause of cancer-related death in the Western world.

Although Vectibix is a key product in the anti-epidermal growth factor receptor therapy, Erbitux dominates the market. Erbitux, which recorded sales of $1.6 billion in 2008, was discovered by ImClone, a part of Eli Lilly (LLY), and is sold by Merck KGaA and Bristol-Myers Squibb (BMY). Amgen is trying hard to increase its presence in this market. We have a Neutral rating on the stock.

The company had delivered 20,000 doses of the drug, for emergency use in the treatment of inhalation anthrax, to the U.S. Strategic National Stockpile in the first quarter of this year and completed the delivery in the second quarter. It recognized $153.8 million in ABthrax revenue in the first quarter.

Human Genome is under contract to deliver doses of the drug to the U.S. Strategic National Stockpile, which stores huge quantities of medicine and medical supplies to be used in national emergencies like a flu outbreak, terrorist attacks or earthquakes that are brutal enough to deplete local supplies.

As a reminder, ABthrax, for anthrax disease, is being developed under a contract entered into in 2006 with the Biomedical Advanced Research and Development Authority (BARDA) of the Office of the Assistant Secretary for Preparedness and Response (ASPR), U.S. Department of Health and Human
Services (HHS). Under the contract, HGS filed a Biologics License Application (BLA) with the FDA in the second quarter of 2009.

This order for additional doses of ABthrax comes on the heels of stupendous news for the company whereby Human Genome and its partner GlaxoSmithKline Plc (GSK) announced positive results for its lupus drug Benlysta in a phase III study (BLISS-52). Results from another late-stage study (BLISS-76) for
the same indication are expected this November.

Positive results from BLISS-76 should allow the company to submit marketing applications in the U.S., Europe and other regions in the first half of 2010. However, once Benlysta hits the market, it could face tough competition from Atacicept, which is under late-stage development for lupus nephritis by Merck KGaA/ZymoGenetics (ZGEN).

Encouraging results from BLISS-52 have caused Human Genome's price to soar. However, we would like to see results from BLISS-76 before we recommend the shares to investors as it is a high-risk program - historically, lupus has been found to be a difficult to treat disease. We maintain our Hold rating on HGSI shares.