Merck's (MRK) data from a phase 2b study evaluating tulisokibart in hidradenitis suppurativa looks solid, potentially adding another indication for tulisokibart as management plans to advance into a phase 3 trial, UBS Securities said in a note Wednesday.

The company reported a 29% to 37% placebo adjusted hidradenitis suppurativa clinical response 50 between the four-week dose and two-week dose at week 16, which appeared to be in-line or better than the phase 2 data from UCB's Bimzelx, the investment firm said.

Even if phase 3 efficacy comes down slightly, UBS said tulisokibart could still be a meaningfully differentiated product as a novel mechanism compared with current standard of care.

As tulisokibart can be dosed either at a two-week interval or a four-week interval, the investigational drug could be priced slightly higher with potentially more frequent dosing for the hidradenitis suppurativa indication, the firm said.

UBS Securities has a buy rating on the stock, with a $175 price target.

Merck shares were 0.7% lower in Thursday trading.

Price: 144.25, Change: -1.07, Percent Change: -0.73