Merck 2020: Keytruda and a spin-off

Merck is cutting weight to focus on the company’s world-beating oncologic and other high-growth-potential products.

Merck & Co.

2000 Galloping Hill Road
Kenilworth, NJ 07033
Telephone: 908-740-4000
Website: merck.com

FINANCIAL PERFORMANCE

(All figures are in millions of dollars, except EPS)

2019

Revenue $46,840

Net income $9,777

Diluted EPS $3.81

R&D expense $9,872

1H 2020

Revenue $22,929

Net income $6,229

Diluted EPS $2.45

R&D expense $4,331

BEST-SELLING Rx PRODUCTS

(All sales are in millions of dollars)

2019

Keytruda $11,084

Gardasil, Gardasil 9 $3,737

Januvia $3,482

ProQuad, M-M-R II, Varivax $2,275

Janumet $2,041

Bridion $1,131

Isentress, Isentress HD $975

Pneumovax 23 $926

NuvaRing $879

Zetia, Vytorin $874

Simponi $830

RotaTeq $791

Implanon, Nexplanon $787

Singulair $698

Noxafil $662

1H 2020

Keytruda $6,672

Gardasil, Gardasil 9 $1,753

Januvia $1,628

Janumet $993

ProQuad, M-M-R II, Varivax $813

Bridion $524

Isentress, Isentress HD $441

Simponi $406

RotaTeq $391

Zetia, Vytorin $374

Pneumovax 23 $373

Implanon, Nexplanon $326

Lynparza $323

Lenvima $279

Singulair $255

Outcomes Creativity Index Score: 21
Manny Awards – N/A
Cannes Lions – N/A
LIA: Health & Wellness – N/A
Clio Health – N/A
One Show: HW&P – N/A
MM&M Awards – 9
Global Awards – 4
Creative Floor Awards – 8

Prizefighters often add on weight to move up to higher divisions; Merck & Co. is doing the opposite. As its heavyweight champion oncologic Keytruda blows past sales records, the company has decided to cut weight – to spin off less innovation-focused parts of business operations in order to focus more closely on the high-growth opportunities in its portfolio.

“Merck had an extraordinary year (in 2019) and is in a position of operational and financial strength,” said Kenneth C. Frazier, chairman and CEO of Merck, in February 2020. “It is this position of strength, born of our focused execution, that gives us the confidence to spin off our Women’s Health, trusted Legacy Brands and Biosimilar products into a new company, which will position us to deliver even greater value to patients and shareholders.”

Certainly Merck’s enormous investment in the development of Keytruda has proven itself wise. In 2019 the drug took over as the No. 1 cancer product by sales worldwide, became only the sixth prescription drug ever to pass $10 billion in annual sales, and landed at No. 2 in global sales among all prescription products, trailing only Humira, whose throne it may well challenge in the relatively near future. The analysts at GlobalData have projected that Keytruda will become the world’s best-selling drug by 2023 and pass $22 billion in annual sales by 2025; EvaluatePharma is projecting $24.9 billion by 2026.

Pushed along by the jump in Keytruda sales, Merck’s top line rose to $46.84 billion in 2019, an improvement of 10.7 percent. Net income was up by more than half, from $6.19 billion to $9.78 billion, and diluted earnings per share rose by $1.49 to $3.81 for the year. In the first half of 2020 top-line sales edged up 1.6 percent to $22.93 billion, with net income up 13.1 percent to $6.23 billion and EPS up 30 cents to $2.45. Company leaders projected that full-year 2020 earnings per share will fall between $4.58 and $4.73.

Spin-off

Merck announced in February the intention to spin off products from the Women’s Health, trusted Legacy Brands, and Biosimilars businesses into a new, yet-to-be-named, independent, publicly traded company. The spin-off, Merck executives say, will allow both management teams to drive increased responsiveness to the particular needs of their patients and customers and achieve faster growth through focused and fit-for-purpose operating models.

According to company leaders, Merck will continue to benefit from strong growth across its current key pillars of Oncology, Vaccines, Hospital and Animal Health, while remaining fully committed to investing in R&D in pursuit of breakthrough innovations across all areas of science and to driving value from its deep late-stage pipeline.

Merck will retain the company’s current growth pillars of Oncology, Vaccines, Hospital and Animal Health and continue to invest in research and development of breakthrough innovations across all areas of science. Led by innovative products, as well as its diabetes business and other key products, Merck will continue to benefit from broad commercial scale and remains committed to ensuring continued access to its innovative medicines across the globe.

The spin-off of NewCo will reduce Merck’s Human Health manufacturing footprint by about 25 percent and the number of Human Health products it manufactures and markets by about 50 percent. This will allow for a more focused operating model in support of the growth products. As a result, Merck expects to optimize its resources, grow faster, and achieve meaningful operating margin expansion over time through increased productivity and efficiency.

NewCo will pursue global leadership and focused, sustainable growth in Women’s Health led by the growing and patent-protected Nexplanon (etonogestrel implant) franchise and fueled by the contraceptive and fertility businesses. NewCo executives expect to establish a leading position in Biosimilars along with its partner, Samsung Bioepis Co., focusing on its current portfolio including Renflexis (infliximab-abda) and Brenzys (etanercept) in immunology and Ontruzant (trastuzumab-dttb) in oncology, and is well-positioned to be a partner in the commercialization of biosimilars worldwide. Company leaders say NewCo will have a portfolio of profitable and trusted brands consisting of dermatology, pain, respiratory, select cardiovascular products including Zetia and Vytorin, as well as the rest of Merck’s Diversified Brands, with strong cash flows that will support investments in future growth opportunities. In addition, NewCo will pursue opportunities to partner with biopharmaceutical innovators looking to commercialize their products by taking advantage of NewCo’s scale and presence in fast growing international markets.

NewCo will have a global footprint with about 75 percent of sales generated from ex-U.S. markets, significant scale and geographic reach, world-class commercial capabilities, and about 10,000 to 11,000 employees. NewCo is expected to have headquarters in New Jersey. The spin-off is expected to be completed in the first half of 2021.

Acquisitions & partnerships

During January 2020, Merck announced an exclusive worldwide research collaboration and license agreement with Taiho Pharmaceutical Co., and Astex Pharmaceuticals, a wholly owned subsidiary of Otsuka Pharmaceutical Co., focused on the development of small-molecule inhibitors against several drug targets, including the KRAS oncogene, which are being investigated for treating cancer.

Merck, Taiho and Astex are combining preclinical candidates and their data with knowledge and expertise from their respective research programs. Merck is funding R&D and is responsible for commercialization of products globally. Taiho has retained co-commercialization rights in Japan and an option to promote in specific areas of Southeast Asia.

In April, Merck and the Institute for Systems Biology announced a new research collaboration to investigate and define the molecular mechanisms of SARS-CoV-2 infection and COVID-19 and identify targets for medicines and vaccines. Merck has also entered into an agreement with the Biomedical Advanced Research and Development Authority, part of the office of the Assistant Secretary for Preparedness and Response within an agency of the U.S. Department of Health and Human Services, for BARDA to provide funding support for this research effort under Contract No. HHSO100201600031C.

Through this collaboration, scientists from ISB, health workers from the Swedish Medical Center, and a consortium of research organizations and biomedical companies will analyze blood samples and nasal swabs from Swedish Medical Center patients with SARS-CoV-2 using samples from several time points (initial presentation, acute illness, and convalescence). Blood samples will be examined using proteomic, metabolomic, transcriptomics, and genetic techniques to evaluate the impact of infection on different organs, and to identify potential biomarkers to predict the risk of severe disease. In addition, samples will be analyzed to create a profile of the immune response, including quantitative changes in immune cells in patients following SARS CoV-2 infection and characterization of neutralizing antibodies in samples from convalescent patients. These insights can be used to inform vaccine design and antibody therapy.

In May, Merck and Ridgeback Biotherapeutics LP entered into a collaboration agreement to develop EIDD-2801, an orally available antiviral candidate in early clinical development for the treatment of patients with COVID-19. Merck, through a subsidiary, gained exclusive worldwide rights to develop and commercialize EIDD-2801 and related molecules. Ridgeback Bio received an undisclosed upfront payment, specified milestones, and a share of the net proceeds of EIDD-2801 and related molecules, if approved. Merck is responsible for clinical development, regulatory filings, and manufacturing.

Also in May, Merck and IAVI – a nonprofit scientific research organization dedicated to addressing urgent, unmet global health challenges – announced a new collaboration to develop an investigational vaccine against SARS-CoV-2 to be used for the prevention of COVID-19. This vaccine candidate will use the recombinant vesicular stomatitis virus technology that is the basis for Merck’s Ebola Zaire virus vaccine, Ervebo, which was the first rVSV vaccine approved for use in humans.

IAVI and Merck are working together to advance the development and global clinical evaluation of a SARS-CoV-2 vaccine candidate designed and engineered by IAVI scientists. The vaccine candidate is in preclinical development; clinical studies were planned to start in 2020. Merck is leading regulatory filings globally.

Additionally during May, Merck agreed to acquire Themis, a company focused on vaccines and immune-modulation therapies for infectious diseases and cancer. Themis has a broad pipeline of vaccine candidates and immune-modulatory therapies developed using its innovative measles virus vector platform based on a vector originally developed by scientists at the Institut Pasteur, a world-leading European vaccine research institute, and licensed exclusively to Themis for select viral indications. In March, Themis joined a consortium together with the Institut Pasteur and The Center for Vaccine Research at the University of Pittsburgh, supported by funding from the Coalition for Epidemic Preparedness Innovations, to develop a vaccine candidate targeting SARS-CoV-2 for the prevention of COVID-19. Merck completed the acquisition of Themis in June.

In August, Merck and Hanmi Pharmaceutical entered into an exclusive licensing agreement for the development, manufacture and commercialization of efinopegdutide (formerly HM12525A), Hanmi’s investigational once-weekly glucagon-like peptide-1/glucagon receptor dual agonist, for the treatment of nonalcoholic steatohepatitis.

Under the agreement, Merck will be granted an exclusive license to develop, manufacture and commercialize efinopegdutide in the United States and globally. Hanmi has received an upfront payment of $10 million and is eligible to receive milestone payments up to $860 million associated with the development, regulatory approval and commercialization of efinopegdutide, as well as double-digit royalties on sales of approved product. Hanmi retains an option to commercialize efinopegdutide in Korea.

Merck and Seattle Genetics announced in September two new strategic oncology collaborations. The companies will globally develop and commercialize Seattle Genetics’ ladiratuzumab vedotin, an investigational antibody-drug conjugate (ADC) targeting LIV-1, which is undergoing Phase II studies for breast cancer and other solid tumors. The collaboration will pursue a broad joint development program assessing ladiratuzumab vedotin as monotherapy and in combination with Keytruda in triple-negative breast cancer, hormone receptor-positive breast cancer and other LIV-1-expressing solid tumors.

Seattle Genetics received a $600 million upfront payment and Merck will make a $1 billion equity investment in 5 million shares of Seattle Genetics common stock at $200 per share. Seattle Genetics is eligible for progress-dependent milestone payments of up to $2.6 billion.

Keytruda

With sales growth of 54.6 percent to $11.08 billion in 2019, Keytruda has become the No. 1 oncologic in the world by sales, and No. 2 only to Humira among all pharmaceutical brands. Merck leaders credited this growth to the launch of multiple new indications globally and building sales across multiple approved indications in the United States, in particular NSCLC as monotherapy and in combination with chemotherapy for both nonsquamous and squamous metastatic NSCLC, along with uptake in the RCC and adjuvant melanoma indications. Other indications contributing to U.S. sales growth in 2019 included HNSCC, urothelial carcinoma, melanoma, and MSI-H cancer.

In the first half of 2020, Keytruda sales rose another 36.1 percent to $6.67 billion. According to company executives, this was driven by higher demand from continuing new indication launches, although the COVID-19 pandemic had a dampening effect on growing demand. Sales growth in the United States in the first half of 2020 was driven in particular by the indications for the treatment of NSCLC as monotherapy and in combination with chemotherapy for both nonsquamous and squamous metastatic NSCLC, along with uptake in the adjuvant melanoma and RCC indications. Other indications contributing to U.S. sales growth included HNSCC, bladder cancer, melanoma and MSI-H cancer. Keytruda sales growth in international markets was driven by continued uptake in approved indications, particularly in the European Union.

In January, FDA approved Keytruda as monotherapy for the treatment of patients with Bacillus Calmette-Guerin-unresponsive, high-risk, non-muscle invasive bladder cancer with carcinoma in situ with or without papillary tumors who are ineligible for or have elected not to undergo cystectomy.

The approval was based on data from KEYNOTE-057, a multicenter, open-label, single-arm trial in 96 patients with BCG-unresponsive, high-risk, non-muscle invasive bladder cancer with carcinoma in situ with or without papillary tumors who are ineligible for or have elected not to undergo cystectomy. In this study, Keytruda showed a complete response rate of 41 percent. Among the 39 patients who achieved a complete response, the median duration of response was 16.2 months, and 46 percent had a response of 12 months or longer.

Also in January, Merck announced that the Phase III KEYNOTE-604 trial investigating Keytruda in combination with chemotherapy met one of its dual primary endpoints of progression-free survival in the first-line treatment of patients with extensive-stage small cell lung cancer. In the study, treatment with Keytruda in combination with chemotherapy (etoposide plus cisplatin or carboplatin) resulted in a statistically significant improvement in PFS compared to chemotherapy alone, which was observed at a prior interim analysis. At the final analysis of the study, there was also an improvement in overall survival (OS) for patients treated with Keytruda in combination with chemotherapy compared to chemotherapy alone; however, these OS results did not meet statistical significance per the pre-specified statistical plan.

In April, FDA approved an additional recommended dosage of 400 milligrams every six weeks (Q6W) for Keytruda across all adult indications, including monotherapy and combination therapy. This indication received accelerated approval based on pharmacokinetic data, the relationship of exposure to efficacy, and the relationship of exposure to safety. Continued approval for this dosing may be contingent upon verification and description of clinical benefit in the confirmatory trials. This new dosage option is available in addition to the dose of 200 milligrams every three weeks (Q3W).

Also in April, Merck announced the presentation of interim data from Cohort B of KEYNOTE-555, a Phase I trial evaluating a 400 milligram every six-week (Q6W) dosing regimen for Keytruda in patients with metastatic melanoma. Results of the study – which represent the first clinical outcomes evaluating Q6W dosing for Keytruda – demonstrated efficacy and safety comparable to findings from previous melanoma trials evaluating Keytruda monotherapy. Interim data showed an overall response rate of 38.6 percent in patients who received Keytruda 400 milligrams Q6W, the primary endpoint of the study.

Merck announced in May positive results from two studies from the company’s lung cancer research program. Initial results from the Phase II KEYNOTE-799 trial evaluating Keytruda plus concurrent chemoradiation therapy demonstrated an objective response rate of 67.0 percent in Cohort A (squamous and nonsquamous non-small cell lung cancer patients who received paclitaxel plus carboplatin) and 56.6 percent in Cohort B (nonsquamous NSCLC patients who received cisplatin plus pemetrexed) in untreated patients with unresectable, locally advanced stage III NSCLC. Additionally, new and updated data from the final analysis of the pivotal Phase 3 KEYNOTE-189 trial showed that 45.7 percent of patients with metastatic nonsquamous NSCLC treated with Keytruda in combination with chemo were alive at two years versus 27.3 percent of patients treated with chemo alone.

Also in May, Merck announced positive results from the Phase III KEYNOTE-355 trial investigating Keytruda as first-line treatment in patients with metastatic triple-negative breast cancer. In patients whose tumors expressed PD-L1 with Combined Positive Score ≥10, Keytruda plus chemotherapy demonstrated a statistically significant and clinically meaningful improvement in progression-free survival, reducing the risk of disease progression or death by 35 percent and improving PFS to a median of 9.7 months compared to 5.6 months for those receiving chemotherapy alone. In patients whose tumors expressed PD-L1 with CPS ≥1, Keytruda plus chemotherapy improved PFS versus chemotherapy alone (median PFS = 7.6 months versus 5.6 months), however, these results did not meet statistical significance. As previously announced, the trial will continue without changes to evaluate the other dual primary endpoint of OS.

In June, FDA approved Keytruda as monotherapy for the first-line treatment of patients with unresectable or metastatic microsatellite instability-high or mismatch repair deficient colorectal cancer. The approval was based on results from the Phase III KEYNOTE-177 trial, in which Keytruda significantly reduced the risk of disease progression or death by 40 percent compared with chemotherapy, the current standard of care. In the study, treatment with Keytruda also more than doubled median progression-free survival compared with chemotherapy (16.5 months versus 8.2 months).

This approval was granted less than one month following the submission of a new supplemental biologics license application, which was reviewed under FDA’s Real-Time Oncology Review pilot program. This review also was conducted under Project Orbis, an initiative of the FDA Oncology Center of Excellence that provides a framework for concurrent submission and review of oncology drugs among its international partners.

Also in June, FDA approved Keytruda as monotherapy for the treatment of patients with recurrent or metastatic cutaneous squamous cell carcinoma that is not curable by surgery or radiation. This approval was based on data from the Phase II KEYNOTE-629 trial, in which Keytruda demonstrated meaningful efficacy and durability of response, with an objective response rate of 34 percent, including a complete response rate of 4 percent and a partial response rate of 31 percent. Among responding patients, 69 percent had ongoing responses of six months or longer. After a median follow-up time of 9.5 months, the median duration of response had not been reached.

Also in June, FDA approved Keytruda as monotherapy for the treatment of adult and pediatric patients with unresectable or metastatic tumor mutational burden-high [≥10 mutations/megabase (mut/Mb)] solid tumors, as determined by an FDA-approved test, that have progressed following prior treatment and who have no satisfactory alternative treatment options. This indication was approved under accelerated approval based on tumor response rate and durability of response. FDA also approved FoundationOne CDx as the companion diagnostic to identify patients with solid tumors that are TMB-H (≥10 mutations/ megabase) who may benefit from immunotherapy treatment with Keytruda .

The accelerated approval was based on data from a prospectively-planned retrospective analysis of 10 cohorts (A through J) of patients with various previously treated unresectable or metastatic solid tumors with TMB-H, who were enrolled in KEYNOTE-158 (NCT02628067), a multicenter, non-randomized, open-label trial evaluating Keytruda (200 milligrams every three weeks).

In the 102 patients whose tumors were TMB-H, Keytruda demonstrated an ORR of 29 percent, with a complete response rate of 4 percent and a partial response rate of 25 percent. After a median follow-up time of 11.1 months, the median DOR had not been reached (range, 2.2+ to 34.8+ months). Among the 30 responding patients, 57 percent had ongoing responses of 12 months or longer, and 50 percent had ongoing responses of 24 months or longer.

In a pre-specified analysis of patients with TMB ≥13 mut/Mb, Keytruda demonstrated an ORR of 37 percent, with a complete response rate of 3 percent and a partial response rate of 34 percent. Among the 26 responding patients, 58 percent had ongoing responses of 12 months or longer, and 50 percent had ongoing responses of 24 months or longer. In an exploratory analysis in 32 patients whose cancer had TMB ≥10 mut/Mb and <13 mut/Mb, the ORR was 13 percent, including two complete responses and two partial responses.

Also in June, Merck announced that the Phase III KEYNOTE-361 trial evaluating Keytruda in combination with chemotherapy for the first-line treatment of patients with advanced or metastatic urothelial carcinoma (bladder cancer) did not meet its pre-specified dual primary endpoints of overall survival or progression-free survival, compared with standard of care chemotherapy. In the final analysis of the study, there was an improvement in OS and PFS for patients treated with Keytruda in combination with chemotherapy (cisplatin or carboplatin plus gemcitabine) compared to chemo alone; however, these results did not meet statistical significance per the pre-specified statistical plan. The monotherapy arm of the study was not formally tested, since superiority was not reached for OS or PFS in the Keytruda combination arm.

In July, FDA accepted two new supplemental biologics license applications for Keytruda. FDA accepted and granted priority review for a new sBLA seeking accelerated approval for Keytruda in combination with chemotherapy for the treatment of patients with locally recurrent unresectable or metastatic triple-negative breast cancer whose tumors express PD-L1 (Combined Positive Score [CPS] ≥10), based on the Phase III KEYNOTE-355 trial. FDA also accepted a new sBLA for Keytruda for the treatment of patients with high-risk early-stage TNBC, in combination with chemotherapy as neoadjuvant treatment, and then as a single agent as adjuvant treatment after surgery, based on the Phase III KEYNOTE-522 trial.

In KEYNOTE-355, Keytruda plus chemotherapy demonstrated a statistically significant and clinically meaningful improvement in progression-free survival compared with chemotherapy alone in patients whose tumors expressed PD-L1 at CPS ≥10. About 38 percent of patients enrolled in KEYNOTE-355 had tumors expressing PD-L1 at CPS ≥10. The trial will continue without changes to evaluate the other dual primary endpoint of OS.

In KEYNOTE-522 – the first randomized trial of an anti-PD-1 therapy in the neoadjuvant/adjuvant setting for TNBC – neoadjuvant Keytruda plus chemotherapy resulted in a statistically significant increase in pathologic complete response in patients with early-stage TNBC, regardless of PD-L1 expression. The Keytruda regimen also demonstrated a favorable trend for the other dual primary endpoint of event-free survival.

Also in July, FDA accepted and granted priority review for a new supplemental biologics license application for Keytruda as monotherapy for the treatment of adult patients with relapsed or refractory classical Hodgkin lymphoma. This sBLA is based on data from the pivotal Phase III KEYNOTE-204 trial, in which Keytruda demonstrated a statistically significant and clinically meaningful improvement in progression-free survival, one of the dual primary endpoints. Keytruda reduced the risk of disease progression or death by 35 percent and showed a median PFS of 13.2 months compared with 8.3 months for patients treated with brentuximab vedotin, a current standard of care in this patient population.

Also in July, FDA issued a complete response letter regarding Merck’s and Eisai’s applications seeking accelerated approval of Keytruda plus Lenvima, the orally available multiple receptor tyrosine kinase inhibitor discovered by Eisai, for the first-line treatment of patients with unresectable hepatocellular carcinoma. The applications were based on data from the Phase Ib KEYNOTE-524/Study 116 trial, which showed clinically meaningful efficacy in the single-arm setting. Ahead of the Prescription Drug User Fee Act action dates of Merck’s and Eisai’s applications, another combination therapy was approved based on a randomized, controlled trial that demonstrated overall survival. Consequently, the CRL stated that Merck’s and Eisai’s applications do not provide evidence that Keytruda in combination with Lenvima represents a meaningful advantage over available therapies for the treatment of unresectable or metastatic HCC with no prior systemic therapy for advanced disease. Since the applications for KEYNOTE-524/Study 116 no longer meet the criteria for accelerated approval, both companies plan to work with FDA to take appropriate next steps, which include conducting a well-controlled clinical trial that demonstrates substantial evidence of effectiveness and the clinical benefit of the combination. As such, LEAP-002, the Phase III trial evaluating the Keytruda plus Lenvima combination as a first-line treatment for advanced HCC, is currently underway and fully enrolled.

In August, Merck announced that the pivotal Phase III KEYNOTE-590 trial evaluating Keytruda in combination with chemotherapy (cisplatin plus 5-fluorouracil), met its primary endpoints of overall survival and progression-free survival for the first-line treatment of patients with locally advanced or metastatic esophageal cancer. Based on an interim analysis conducted by an independent Data Monitoring Committee, Keytruda in combination with chemotherapy demonstrated a statistically significant and clinically meaningful improvement in OS and PFS compared with chemotherapy (cisplatin plus 5-FU), the current standard of care, in the intention-to-treat population. The study also met the key secondary endpoint of objective response rate, with significant improvements for Keytruda in combination with chemotherapy compared with chemotherapy alone.

Other product performances

The Januvia and Janumet diabetes franchise generated sales of $5.52 billion in 2019, a decline of 6.6 percent. According to company leaders, this decrease was a result of continued pricing pressure in the United States, partially offset by higher demand in most international markets. The patents that provide market exclusivity for Januvia and Janumet in the United States and Europe will expire in July 2022, although six-month pediatric exclusivity may extend this date. The supplementary patent certificate that provides market exclusivity for Janumet in the EU will expire in April 2023. In the first half of 2020, combined Januvia and Janumet sales declined another 6.2 percent to $2.62 billion. The declines were primarily due to continued U.S. pricing pressure and lower demand in certain markets resulting from the COVID-19 pandemic, partially offset by demand in China.

Gardasil, Merck’s HPV vaccine, generated sales of $3.74 billion in 2019, an improvement of 18.6 percent. According to company leaders, this was driven primarily by higher demand in the Asia Pacific region, particularly in China, and higher demand in certain European markets reflecting increased vaccination rates for both boys and girls. Growth was partially offset by lower sales in the United States. The U.S. sales decline was driven by the borrowing of Gardasil 9 doses from the U.S. Centers for Disease and Control Prevention Pediatric Vaccine Stockpile, offset in part by higher demand and pricing. In the first half of 2020, Gardasil sales edged up another 1.7 percent to $1.75 billion, again driven by higher demand in China and in the EU, partially offset by the unfavorable effects of the COVID-19 pandemic, particularly in the United States and Hong Kong, SAR, and PRC.

In June, FDA approved an expanded indication for Gardasil 9 for the prevention of oropharyngeal and other head and neck cancers caused by HPV Types 16, 18, 31, 33, 45, 52, and 58. The oropharyngeal and head and neck cancer indication was approved under accelerated approval based on effectiveness in preventing HPV-related anogenital disease. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial. The study is currently underway.

The ProQuad/M-M-R II/Varivax vaccine franchise generated sales of $2.28 billion for Merck in 2019, an improvement of 26.5 percent. ProQuad growth was driven primarily by higher volumes and pricing in the United States, as well as volume growth in the EU largely reflecting a competitor supply issue. M-M-R II’s improvement came due to higher sales in the United Sates reflecting increased demand due to measles outbreaks, as well as higher pricing. Growth of Varivax sales was due to government tenders in Latin America, as well as higher pricing and volume growth in the United States. In the first half of 2020, the franchise fell back to earth, with sales declining 30.6 percent to $813 million. According to company leaders, the decline in ProQuad sales was due primarily to the COVID-19 pandemic, while the drop in M-M-R II came due to a decline in measles outbreaks and the impact of COVID-19. The decline in Varivax sales reflected lower government tenders in Brazil as well as lower demand in the United States resulting from the COVID-19 pandemic.

Bridion, indicated for the reversal of two types of neuromuscular blocking agents used during surgery, passed the blockbuster barrier in 2019 with sales of $1.13 billion on growth of 23.3 percent. According to company executives, this was driven by higher demand globally, particularly in the United States. In the first half of 2020, sales of Bridion declined by 1.7 percent to $524 million, primarily attributable to lower demand resulting from fewer elective surgeries due to the COVID-19 pandemic.

Merck’s best performer by growth percentage in the first half of 2020 was the oncologic Lynparza. The company’s share of Lynparza revenue – the product is being developed jointly with AstraZeneca – rose by an even 70 percent for the half, with sales of $323 million. This improvement was largely driven by continued uptake across the multiple approved indications in the United States and in the EU.

In March, Merck and AstraZeneca announced high-level results from the Phase III GY004 trial, led by NRG Oncology and sponsored by the U.S. National Cancer Institute, that examined primarily the efficacy and safety of investigational medicine cediranib in combination with Lynparza versus platinum-based chemotherapy in patients with platinum-sensitive relapsed ovarian cancer. The trial did not meet the primary endpoint in the intent-to-treat population of a statistically significant improvement in progression-free survival with cediranib in combination with Lynparza versus platinum-based chemotherapy. Cediranib is an investigational oral vascular endothelial growth factor receptor inhibitor, which blocks the growth of blood vessels supporting tumor growth.

In May, FDA approved Lynparza for the treatment of adult patients with deleterious or suspected deleterious germline or somatic homologous recombination repair gene-mutated metastatic castration-resistant prostate cancer who have progressed following prior treatment with enzalutamide or abiraterone. Patients are selected for therapy based on an FDA-approved companion diagnostic.

The approval was based on positive results from the Phase III PROfound trial. Results from the PROfound trial showed Lynparza reduced the risk of disease progression or death by 66 percent and improved radiographic progression-free survival to a median of 7.4 months versus 3.6 months with enzalutamide or abiraterone in men with mCRPC selected for BRCA1/2 or ATM gene mutations, the primary endpoint and a subpopulation of HRR gene mutations. Results also showed Lynparza reduced the risk of radiographic disease progression or death by 51 percent and improved rPFS to a median of 5.8 months versus 3.5 months with enzalutamide or abiraterone in the overall trial population of men with HRR gene-mutated mCRPC, a key secondary endpoint.

Also in May, FDA approved Lynparza in combination with bevacizumab as a first-line maintenance treatment of adult patients with advanced epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in complete or partial response to first-line platinum-based chemotherapy and whose cancer is associated with homologous recombination deficiency positive status defined by either a deleterious or suspected deleterious BRCA mutation, and/or genomic instability. Patients are selected for therapy based on an FDA-approved companion diagnostic for Lynparza.

The approval was based on a biomarker subgroup analysis of 387 patients with HRD-positive tumors from the Phase III PAOLA-1 trial, which showed that Lynparza in combination with bevacizumab reduced the risk of disease progression or death by 67 percent. The combo improved progression-free survival to a median of 37.2 months versus 17.7 months with bevacizumab alone in patients with HRD-positive advanced ovarian cancer.

In July, Lynparza was approved in the European Union as a monotherapy for the maintenance treatment of adult patients with germline BRCA1/2 mutations who have metastatic adenocarcinoma of the pancreas and have not progressed after a minimum of 16 weeks of platinum treatment within a first-line chemotherapy regimen. The approval by the European Commission was based on results from the Phase III POLO trial, which demonstrated that Lynparza nearly doubled the time patients with germline BRCA-mutated metastatic pancreatic cancer lived without disease progression or death to a median of 7.4 months versus 3.8 months on placebo.

In the pipeline

FDA regulators approved in February an update to the prescribing information for Belsomra (suvorexant) C-IV to include findings on its use for the treatment of insomnia in patients with mild-to-moderate Alzheimer’s disease. Belsomra is indicated for the treatment of insomnia characterized by difficulties with sleep onset and/or sleep maintenance. This update includes findings of a randomized, double-blind, placebo-controlled, parallel-group, multi-site 4-week polysomnography trial of Belsomra in patients with mild-to-moderate Alzheimer’s disease. In this study, Belsomra exhibited a statistically significant improvement for both Total Sleep Time and Wake After Sleep Onset measures, compared to those treated with placebo, as assessed objectively by polysomnography.

During April, FDA approved Koselugo (selumetinib) for the treatment of pediatric patients two years of age and older with neurofibromatosis type 1 who have symptomatic, inoperable plexiform neurofibromas. FDA approval is based on positive results from the National Cancer Institute Cancer Therapy Evaluation Program-sponsored Phase II SPRINT Stratum 1 trial coordinated by the NCI’s Center for Cancer Research, Pediatric Oncology Branch. This is the first regulatory approval of a medicine for the treatment of NF1 PN, a rare and debilitating genetic condition. Results showed an overall response rate of 66 percent in pediatric patients with NF1 and symptomatic, inoperable PN when treated with Koselugo as a twice-daily oral monotherapy. ORR is defined as the percentage of patients with confirmed complete or partial response of at least 20 percent tumor volume reduction. Of the 33 patients, all patients were confirmed partial response.

Merck and Pfizer announced in June the presentation of results from the Phase III VERTIS CV cardiovascular outcomes trial that evaluated Steglatro (ertugliflozin) versus placebo, added to background standard of care treatment, in more than 8,200 patients with type 2 diabetes and atherosclerotic CV disease across 531 centers in 34 countries. The study met the primary endpoint of non-inferiority on major adverse CV events, which is composed of a composite of CV death, nonfatal myocardial infarction or nonfatal stroke, compared to placebo.

Overall, the primary MACE outcome was reported in 11.9 percent of patients treated with Steglatro (5 milligram and 15 milligram doses), compared with 11.9 percent of patients treated with placebo. The key secondary endpoints of superiority for ertugliflozin versus placebo were not met. These key secondary endpoints included: time to the first occurrence of the composite of CV death or hospitalization for heart failure, time to CV death alone, and time to the first occurrence of the composite of renal death, dialysis/transplant or doubling of serum creatinine. The pre-specified endpoint of HHF, while not a part of the hierarchical testing sequence, showed a 30 percent reduction in the risk of HHF for ertugliflozin versus placebo.

In July, FDA granted Breakthrough Therapy Designation to the hypoxia-inducible factor-2 alpha (HIF-2α) inhibitor MK-6482, a novel investigational candidate in Merck’s oncology pipeline, for the treatment of patients with von Hippel-Lindau disease-associated renal cell carcinoma with nonmetastatic RCC tumors less than three centimeters in size, unless immediate surgery is required. FDA also granted Orphan Drug Designation to MK-6482 for VHL disease. These designations were based on data from a Phase II trial evaluating MK-6482 in patients with VHL-associated clear cell RCC.

MK-6482 is an investigational, novel, potent, selective, oral HIF-2α inhibitor being evaluated in a Phase III trial in advanced RCC, a Phase II trial in VHL-associated RCC, and a Phase I/II dose-escalation and dose-expansion trial in advanced solid tumors, including advanced RCC. Proteins known as hypoxia-inducible factors, including HIF-2α, can accumulate in patients when VHL, a tumor-suppressor protein, is inactivated. The accumulation of HIF-2α can lead to the formation of both benign and malignant tumors. This inactivation of VHL has been observed in more than 90 percent of ccRCC tumors. Research into VHL biology that led to the discovery of HIF-2α was awarded the Nobel Prize in Physiology or Medicine in 2019.

Additionally during July, FDA accepted for priority review the new drug application for vericiguat, an orally administered soluble guanylate cyclase stimulator, to reduce the risk of cardiovascular death and heart failure hospitalization following a worsening heart failure event in patients with symptomatic chronic heart failure with reduced ejection fraction, in combination with other heart failure therapies. The application was based on results from the Phase III VICTORIA trial, which is the first contemporary outcomes study focused exclusively on a population with worsening chronic heart failure who are at high risk for cardiovascular mortality and repeated heart failure hospitalizations.

In other July news, Merck announced new analyses from the Phase IIb trial (NCT03272347) evaluating the safety and efficacy of islatravir, the company’s investigational oral nucleoside reverse transcriptase translocation inhibitor, in combination with doravirine (Pifeltro), in adults with HIV-1 infection who had not previously received antiretroviral treatment. The first sub-analysis further characterized the tolerability and safety profile of islatravir in combination with doravirine (100 milligrams) through Week 48 across the three dose levels studied (0.25, 0.75, 2.25 milligrams). The second sub-analysis demonstrated that participants who initiated treatment with islatravir and doravirine in combination with 3TC and switched to islatravir and doravirine maintained antiviral activity at Week 48 as measured by HIV-1 RNA <50 copies/mL similar to Delstrigo, with low rates of protocol defined virologic failure.

During September, Merck announced that two Phase III studies evaluating the safety, tolerability and immunogenicity of V114, an investigational 15-valent pneumococcal conjugate vaccine, met their primary immunogenicity objectives. The pivotal PNEU-AGE (V114-019) study in healthy adults 50 years of age or older demonstrated that V114 is non-inferior to the currently available 13-valent pneumococcal conjugate vaccine (PCV13) for the 13 serotypes targeted by both vaccines and superior for serotypes 22F and 33F, the two serotypes targeted by V114 but not PCV13.