Merck's (MRK) Winrevair treatment needs to show an at least 20-meter improvement in the 6-minute walk distance test to build investor confidence, though results in the high-teens would still be encouraging, RBC Capital Markets said in a Tuesday note.

The company is set to present on March 29 the results of a phase 2 study of Winrevair in combined post- and precapillary pulmonary hypertension due to heart failure with preserved ejection fraction, and RBC analysts said results above 17 meters should support moving forward with phase 3 trials.

Winrevair has drawn investor attention given the upside potential for sales in group 2 pulmonary hypertension, which could present a market opportunity as big as pulmonary arterial hypertension, or PAH, according to the note.

Some concerns around Winrevair's safety profile have been raised, but RBC analysts said a "slightly worse" adverse events profile should be expected given that the patients in this trial are older and sicker than those in the PAH program.

RBC estimated that Merck's stock could add $3 to $5 per share on a positive readout, could trade flat on ambiguous data, and could fall $4 to $6 on a negative readout.

The firm maintained its outperform rating on Merck with a $142 price target.

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