Merck: Beneath The Surface
2000 Galloping Hill Road
Kenilworth, NJ 07033
Telephone: 908-740-4000
Website: merck.com
Best-Selling Products
| Product | 2014 Sales | 2013 Sales |
|---|---|---|
| Januvia | $3,931 | $4,004 |
| Zetia | $2,650 | $2,658 |
| Remicade | $2,372 | $2,271 |
| Janumet |
$2,071 |
$1,829 |
| Gardasil |
$1,738 |
$1,831 |
| Isentress |
$1,673 |
$1,643 |
| Vytorin | $1,516 | $1,643 |
| ProQuad/M-M-R II/Varivax | $1,394 | $1,306 |
| Nasonex | $1,099 | $1,335 |
| Singulair | $1,092 | $1,196 |
All sales are in millions of dollars.
Financial Performance
| 2014 | 2013 | |
|---|---|---|
| Revenue | $42,237 | $44,033 |
| Net income | $11,934 | $4,517 |
| Diluted EPS | $4.07 | $1.47 |
| R&D expense | $7,180 | $7,503 |
| 1H15 | 1H14 | |
|---|---|---|
| Revenue | $19,210 | $21,198 |
| Net income | $1,646 | $3,764 |
| Diluted EPS | $0.57 | $1.25 |
| R&D expense | $3,407 | $3,238 |
In millions of dollars, except EPS
While Merck’s present portfolio of marketed products have done little to inspire of late, the company’s recent launches and late-stage pipeline are another matter entirely. Sales of Merck’s nine blockbuster products (not counting the ProQuad vaccine grouping) dropped 1.5 percent in 2014, with only one – Janumet – enjoying double-digit growth. Results were no better in first-half 2015, with none earning double-digit growth and several suffering significant losses due to generic competition.
On the other hand, Merck’s pipeline has been popping. The company earned approvals for seven new products during the course of 2014 — most prominently the oncology drug Keytruda — and a number of others (not to mention a number of other Keytruda indications, as the compound is being studied in more than 30 cancers) are in late-stage development or have already been submitted to regulators. The company also made two big-ticket strategic moves at the end of the year — the $14.2 billion sale of its consumer care business and the $9.5 billion acquisition of Cubist Pharmaceuticals Inc. (which brought with it Zerbaxa, one of those seven new approvals). And Merck also divested multiple sites within its manufacturing network around the world and completed the closure of its facilities in Whitehouse Station and Summit, N.J.
All of this appears to bode well for the success of Merck’s ongoing strategic initiative to sharpen its commercial and research & development focus, redesign its operating model, and reduce its cost base. “Over the past 15 months, we’ve seen the results of our transformation strategy, including advancing major pipeline candidates, completing multiple business development actions and securing first-in-class product approvals,” said Kenneth C. Frazier, chairman and CEO of Merck, at the beginning of 2015. “As a result of our strong and continued commitment to the pursuit of science and R&D, our labs are focused on many of the most innovative areas in biomedical research today, which we believe is the best way to create intrinsic value for both society and for our shareholders.”
Merck’s top-line revenue in 2014 was $42.24 billion, down 4.1 percent compared with the previous year. Net income was $11.93 billion, an increase of 164.2 percent, but this was significantly impacted by the divestiture of Merck Consumer Care. According to the company’s own non-GAAP calculations, which exclude gains on divestitures, restructuring costs and other one-time items, net income for the year was down by 2.6 percent. Similarly, while GAAP EPS for the year rose $2.60 to $4.07, Merck’s non-GAAP calculations had EPS at $3.49, exactly the same as the non-GAAP EPS number for 2013. R&D expense for the year totalled $7.18 billion, a decrease of 4.3 percent.
In the first half of 2015, top-line revenue was $19.21 billion, down 9.4 percent. GAAP net income dropped 56.3 percent to $1.65 billion and GAAP EPS was down 68 cents to $0.57, but non-GAAP income fell just 5.4 percent to $4.87 billion and non-GAAP EPS dropped two cents to $1.70. Company leaders have projected full-year 2015 GAAP EPS at between $1.52 and $1.71, with non-GAAP EPS estimated to fall between $3.45 and $3.55.
Collaborations and acquisitions
In August 2014, Merck and Pfizer Inc. entered into an agreement to explore the therapeutic potential of the combination of Pfizer’s Xalkori with Keytruda in a Phase Ib clinical study evaluating the safety and tolerability of the combination in patients with ALK-positive advanced or metastatic non-small cell lung cancer. This multi-center, open-label clinical study was expected to begin in 2015. Pfizer will conduct the study.
Both companies previously announced plans to evaluate the safety and efficacy of Keytruda in combination with Pfizer’s small molecule kinase inhibitor Inlyta in patients with renal cell carcinoma. Separately, Keytruda plus Pfizer’s PF-05082566, an investigational immuno-oncology agent that targets the human 4-1BB receptor, will be evaluated in multiple cancer types.
In September 2014, Merck and Sun Pharmaceutical Industries Ltd. announced an exclusive worldwide licensing agreement for Merck’s investigational therapeutic antibody candidate tildrakizumab, which is being evaluated in Phase III registration trials for the treatment of chronic plaque psoriasis.
Under the terms of the agreement, Sun will acquire worldwide rights to tildrakizumab for use in all human indications from Merck in exchange for an upfront payment of $80 million. Merck will continue all clinical development and regulatory activities, which will be funded by Sun. Upon product approval, Sun will be responsible for regulatory activities, manufacturing, and commercialization of the approved product. Merck is eligible to receive undisclosed payments associated with regulatory (including product approval) and sales milestones, as well as tiered royalties ranging from mid-single digit through teen percentage rates on sales.
In October 2014, Merck completed the sale of the Merck Consumer Care business to Bayer AG. Bayer acquired Merck’s existing over-the-counter business, including the global trademark and prescription rights for Claritin and Afrin, for $14.2 billion, or about $9 billion in after-tax proceeds, less customary closing adjustments as well as certain contingent amounts held back that will be payable upon the manufacturing site transfer in Canada and regulatory approvals in Mexico and Korea.
In conjunction with this transaction, Merck also entered into a worldwide collaboration with Bayer to develop and commercialize soluble guanylate cyclase (sGC) modulators. This collaboration includes Bayer’s Adempas, the first in a novel class of compounds and the only treatment approved for both pulmonary arterial hypertension and chronic thromboembolic pulmonary hypertension, as well as the investigational compound vericiguat, in Phase II development. The collaboration also includes opt-in rights for other early-stage sGC compounds in development by both companies. Merck made an upfront payment of $1 billion in connection with the sGC collaboration.
In November, Merck and NewLink Genetics Corp. entered into an exclusive worldwide license agreement to research, develop, manufacture, and distribute NewLink’s investigational rVSV-EBOV (Ebola) vaccine candidate. The vaccine candidate, originally developed by the Public Health Agency of Canada, is being evaluated in Phase I clinical trials. Pending the results of ongoing Phase I trials, the U.S. National Institutes of Health has announced plans to initiate, in early 2015, a large randomized, controlled Phase III study to evaluate the safety and efficacy of the rVSV-EBOV vaccine and another investigational Ebola vaccine co-developed by the National Institute of Allergy and Infectious Diseases and GlaxoSmithKline.
In December, Merck signed a definitive agreement to acquire Cubist Pharmaceuticals for $102 per share in cash. The transaction had an equity valuation of $8.4 billion and also included $1.1 billion in net debt and other considerations for a total transaction value of about $9.5 billion. The deal duly closed in January.
Cubist’s antibiotic Cubicin, the only approved once-a-day therapy for both S. aureus bacteremia and complicated skin and skin structure infections (cSSSI), has been used to treat more than 2 million patients and continues to be an important therapy in the acute care environment. Cubist’s in-line and late-stage pipeline of anti-infective medicines, including Zerbaxa (approved by FDA in December) is expected to enhance Merck’s hospital acute care business in a variety of therapeutic areas, including Gram-positive and Gram-negative multi-drug resistant infections.
Also in December, Merck announced the acquisition of OncoEthix, a Swiss-based privately held biotech company specializing in oncology drug development. Merck gained an investigational, novel oral BET (bromodomain) inhibitor, OTX015, which is in Phase Ib studies for treating hematological malignancies and advanced solid tumors.
BET proteins are considered potential therapeutic targets in cancer, as they play a pivotal role in regulating the transcription of key regulators of cancer cell growth and survival, including c-Myc. Interim data from ongoing Phase I clinical studies of OTX015 have demonstrated meaningful clinical activity in patients with hematological malignancies. An international, open-label Phase I study evaluating OTX015 in five different solid tumors was initiated in November 2014.
In January, Merck and Eli Lilly and Co. announced an oncology clinical trial collaboration to evaluate the safety, tolerability, and efficacy of Keytruda in combination with Lilly compounds in multiple clinical trials. Merck will conduct a Phase II study examining the combination of Keytruda with Alimta in first-line nonsquamous, non-small cell lung cancer. Lilly will conduct a multiple-arm Phase I/II study examining the combination of Cyramza with Keytruda in multiple tumors. Lilly will conduct a Phase I/II study examining the combination of necitumumab with Keytruda in NSCLC.
In February, Merck and NGM Biopharmaceuticals Inc. entered into a multi-year collaboration to research, discover, develop, and commercialize novel biologic therapies across a wide range of therapeutic areas. The collaboration includes multiple drug candidates currently in preclinical development at NGM, including NP201, which is being evaluated for the treatment of diabetes, obesity, and nonalcoholic steatohepatitis (NASH). NGM will lead the research and development of the existing preclinical candidates and have the autonomy to identify and pursue other discovery stage programs at its discretion. Merck will have the option to license all resulting NGM programs following human proof of concept trials. If Merck exercises this option, Merck will lead global product development and commercialization for the resulting products, if approved.
In March, Merck and Eisai Co. announced a clinical trial collaboration to evaluate the safety, tolerability, and efficacy of Merck’s anti-PD-1 therapy Keytruda in combination with Eisai oncology compounds Lenvima (a multi-targeting RTK inhibitor) and Halaven (a microtubule dynamics inhibitor) in multiple clinical trials.
The planned studies include a multicenter, open-label Phase Ib/II study of Lenvima plus Keytruda in select solid tumors and an open-label, single-arm, multicenter Phase Ib/II study to evaluate the efficacy and safety of Halaven in combination with Keytruda in metastatic triple-negative breast cancer. The studies are expected to begin in the second half of 2015.
Also in March, Merck and Syndax Pharmaceuticals Inc. entered into a clinical trial collaboration to evaluate the safety and efficacy of combining Syndax’s entinostat, an investigational epigenetic therapy, with Keytruda. The Phase 1b/2 study will evaluate this novel combination regimen in patients with either advanced non-small cell lung cancer or melanoma. The study is expected to begin enrolling patients in the second half of 2015.
Entinostat is an oral, highly selective histone deacetylase inhibitor granted Breakthrough Therapy Designation in combination with hormone therapy in advanced hormone receptor positive breast cancer and currently in Phase III testing in this indication. Entinostat has been shown in preclinical models to reduce the number and function of host immune suppressor cells thereby enhancing the anti-tumor activity of immune checkpoint blockade.
In April, Merck and TetraLogic Pharmaceuticals Corp., a clinical-stage biopharmaceutical company focused on discovering and developing novel small molecule therapeutics in oncology and infectious diseases, entered into an oncology clinical study collaboration. The companies will collaborate on a Phase I study to evaluate the safety and efficacy of birinapant, TetraLogic’s SMAC-mimetic, in combination with Keytruda, in patients with relapsed or refractory solid tumors. The study is expected to begin in late 2015.
Keytruda and birinapant target different elements of cancer’s block against the immune system. TetraLogic’s birinapant is a potent, bivalent SMAC-mimetic that binds with differential affinity to multiple members of the IAP family in order to re-establish the immune system’s ability to kill abnormal cells via an extracellular TNF signal. The proposed collaboration is based on preclinical data that suggest SMAC-mimetics have the potential to enhance existing immuno-oncology agents such as Keytruda. TetraLogic and Merck will collaborate on an initial Phase I dose-escalation study of birinapant in combination with Keytruda in patients with relapsed or refractory solid tumors. TetraLogic will sponsor and fund the study and Merck will provide Keytruda.
In May, Merck and Amgen announced an expanded collaboration to evaluate the efficacy and safety of talimogene laherparepvec, Amgen’s investigational oncolytic immunotherapy, in combination with Keytruda in a Phase I, open-label trial of patients with recurrent or metastatic squamous cell carcinoma of the head and neck. In addition, the companies announced that a global, randomized Phase III trial evaluating the combination in patients with regionally or distantly metastatic melanoma is being initiated. The compounds are already being studied in a Phase I, open-label trial in this patient population.
Both immunotherapies are designed to modulate the immune system. Talimogene laherparepvec is an investigational oncolytic immunotherapy designed to selectively replicate in tumors (but not normal tissue) and to initiate an immune response against cancer cells.
That same month, Merck and NanoString Technologies Inc. announced a clinical research collaboration to develop an assay that will optimize immune-related gene expression signatures and evaluate the potential to predict benefit from Keytruda in multiple tumor types. The collaboration will utilize NanoString’s nCounter Analysis System to optimize gene expression signatures as part of the clinical development program for Keytruda.
Also in May, Merck and Plexxikon Inc., a member of Daiichi Sankyo Group, announced a collaborative clinical trial that will evaluate the combination of PLX3397, Plexxikon’s investigational CSF-1R inhibitor, and Keytruda, which provides the potential for a double blockade of cancer-induced immune suppression. The Phase I/II trial will enroll patients with advanced melanoma and multiple other solid tumors with the goal of determining the safety and tolerability of the combination therapy. The trial was expected to begin enrollment by mid-year.
PLX3397 is a novel oral small molecule that potently and selectively inhibits CSF-1R, KIT, and mutant FLT3 kinases. CSF1R and KIT regulate key components of both the tumor and its microenvironment (macrophages, osteoclasts, mast cells). In addition to melanoma and other solid tumors to be studied in this collaborative trial, PLX3397 is being evaluated in several other clinical indications, including tenosynovial giant cell tumor (TGCT), historically called pigmented villonodular synovitis (PVNS) or giant cell tumor of the tendon sheath (GCT-TS), breast cancer and glioblastoma.
Also in May, Merck and Tesaro Inc. announced a collaboration to evaluate the combination of Tesaro’s niraparib plus Keytruda in a Phase I/II clinical trial. This trial is planned to evaluate the preliminary safety and efficacy of niraparib plus Keytruda in patients with triple negative breast cancer or ovarian cancer. This trial will be conducted by Tesaro and Merck and is expected to begin by the end of 2015.
Niraparib is an oral, selective inhibitor of PARP-1 and PARP-2. PARP, or poly (ADP-ribose) polymerase, is a DNA repair protein that restores single strand DNA breaks. By inhibiting PARP, certain cancer cells may be rendered unable to repair DNA damage, which can lead to cell death. Two Phase III trials are ongoing to evaluate a single oral dose of niraparib as a maintenance therapy for patients with ovarian cancer (the NOVA study) and as a treatment for patients with BRCA-positive breast cancer (the BRAVO study).
In June, Merck and Dynavax Technologies Corp. entered into two clinical trial collaboration agreements to investigate the potential synergistic effect of combining immunotherapies from both companies’ pipelines: Merck’s Keytruda and its investigational anti-interleukin-10 immunomodulator, MK-1966, with Dynavax’s investigational toll-like receptor 9 agonist, SD-101. SD-101, Keytruda, and MK-1966 are immunotherapies designed to enhance the body’s own defenses in fighting cancer. SD-101 is designed to mediate anti-tumor effects by triggering both innate and adaptive immune responses, including the induction of high levels of Type 1 interferon to stimulate recruitment of T-cells. MK-1966 is an investigational anti-IL-10 immunomodulator designed to neutralize the immune-suppressive environment for tumors.
The collaboration includes a study that will evaluate the safety and efficacy of combining SD-101 with Keytruda in patients with advanced melanoma; this Phase Ib/II, multicenter, open-label study is expected to be initiated in the second half of 2015. It also includes a study evaluating the safety and efficacy of combining SD-101 with MK-1966 in patients with solid or hematological malignancies; this Phase I study is expected to be initiated in the second half of 2015.
In July, Merck signed a definitive agreement to acquire cCAM Biotherapeutics, a privately held biopharmaceutical company focused on the discovery and development of novel cancer immunotherapies. The acquisition provides Merck with several early immunotherapy candidates including cCAM Biotherapeutics’ lead pipeline candidate, CM-24 – a novel monoclonal antibody (mAb) targeting the immune checkpoint protein CEACAM1 that is currently being evaluated in a Phase I study for the treatment of advanced or recurrent malignancies, including melanoma, non-small cell lung, bladder, gastric, colorectal, and ovarian cancers. Based on the transaction, cCAM Biotherapeutics, domiciled in Israel, will become a wholly owned subsidiary of Merck and continue to advance the development of CM-24 in its ongoing Phase I clinical trial.
Also in July, Merck and Allergan plc entered into an agreement under which Allergan would acquire the exclusive worldwide rights to Merck’s investigational small molecule oral calcitonin gene-related peptide (CGRP) receptor antagonists, which are being developed for the treatment and prevention of migraine. The agreement gives Allergan rights to two CGRP receptor antagonists. The first of these is MK-1602, an oral small molecule antagonist for the acute treatment of migraines. A Phase II study of MK-1602 has been completed and end of Phase II discussions with FDA are planned prior to initiating Phase III. A Phase III study is expected to begin in 2016. The second, MK-8031, is an oral small molecule antagonist for the prevention of migraines. A Phase II study of MK-8031 is expected to begin in 2016.
In August, Merck entered into clinical collaboration agreements with Immune Design to evaluate the safety and efficacy of two Immune Design immuno-oncology investigative agents, G100 and LV305, separately combined with Keytruda, in Phase I trials in patients with non-Hodgkin’s lymphoma and melanoma, respectively.
The first clinical trial will examine intratumoral administration of G100 with intravenous administration of Keytruda in patients with follicular NHL receiving local radiation. In addition to an evaluation of the safety of the combination, the study will assess the response in both injected and non-injected lesions. The second clinical trial in melanoma will evaluate safety and response to the combination of LV305 and Keytruda in patients who have not yet responded to treatment with Keytruda alone after three months of treatment. G100 is a potent toll-like receptor-4 agonist designed to generate a robust anti-tumor immune response when administered directly to the tumor micro-environment. LV305, in contrast, is designed to activate the immune system through the in vivo generation of cytotoxic T cells, initially against a specific tumor-associated antigen, NY-ESO-1.
Also in August, Merck and The University of Texas MD Anderson Cancer Center entered into a strategic clinical research collaboration to evaluate Keytruda in combination with other treatments, such as chemotherapy, radiation therapy, and/or novel antitumor medicines. Under the terms of the agreement, collaborative studies will be conducted in gastroesophageal, adenocarcinoma, pancreatic adenocarcinoma, and hepatocellular carcinoma tumors over the three year period of the collaboration. The first studies are scheduled to start enrolling later this year.
The agreement aims to define what combination modalities will work best with Keytruda in these types of tumors by exploring promising new alternatives. All studies will feature state-of-the-art monitoring protocols and built-in flexibility to take advantage of the very latest information available. Past research collaborations with Merck and MD Anderson were pivotal in achieving the FDA approval of Keytruda as a treatment for unresectable or metastatic melanoma.
Product performance
The Januvia diabetes family remained atop Merck’s product sales charts in 2014, with revenue for Januvia itself dropping 1.8 percent to $3.93 billion while revenue for its plus-metformin cousin Janumet was up 13.2 percent to $2.07 billion. The franchise growth, company leaders say, was driven primarily by higher sales of both Januvia and Janumet in the United States and by volume growth in Europe, partially offset by lower sales of Januvia in Japan due to lower pricing. In April 2014, all dipeptidyl peptidase-4 inhibitors, including Januvia, were subject to repricing in Japan. In the first half of 2015, Januvia sales edged up 0.6 percent to $1.93 billion, while Janumet sales rose 6.8 percent to $1.06 billion.
In June, Merck announced the primary results of the Trial Evaluating Cardiovascular Outcomes with Sitagliptin, a placebo-controlled study of the cardiovascular safety of Januvia, added to usual care in more than 14,000 patients. The study achieved its primary composite CV endpoint of non-inferiority (defined as the time to the first confirmed event of any of the following: CV-related death, nonfatal myocardial infarction, nonfatal stroke, or hospitalization for unstable angina) compared to usual care without sitagliptin. In addition, there was no increase in hospitalization for heart failure and rates of all-cause mortality were similar in both treatment groups, which were two key secondary endpoints.
Up next in terms of leading 2014 sales for Merck’s portfolio was the Zetia cardiovascular family. Zetia itself generated $2.65 billion in sales in 2014, down 0.3 percent from the previous year, while Vytorin, the Zetia/Zocor combination, brought in $1.52 billion in sales, a drop of 7.7 percent. The sales decline was driven primarily by lower volumes of Vytorin in the United States and Zetia in Canada, where it lost market exclusivity. In the first half of 2015, sales of Zetia dropped 9.5 percent to $1.2 billion, while sales of Vytorin were down 17.6 percent to $640 million.
Merck’s next best seller in 2014 was the autoimmune drug Remicade, which brought in $2.37 billion in sales, up 4.4 percent from the previous year. Remicade’s follow-on, Simponi, grew its sales by 37.8 percent to $689 million. This growth, company leaders say, was driven by demand in Europe reflecting in part a positive impact from Simponi’s new ulcerative colitis indication, granted in September 2013. In the first half of 2015, Remicade sales dropped 21.1 percent to $956 million due to loss of exclusivity in Europe, while sales of Simponi fell 0.9 percent to $327 million.
The HPV vaccine Gardasil brought in $1.74 billion in sales for Merck in 2014, down 5.1 percent compared with the previous year. According to company leaders, this decline reflects lower sales in Asia Pacific, Japan, and Canada, partially offset by higher government tenders in Brazil from the national immunization program, as well as higher public sector purchases in the United States. In the first half of 2015, sales of Gardasil dropped 0.9 percent to $785 million.
In December, FDA approved Gardasil 9, Merck’s 9-valent HPV vaccine, for use in girls and young women 9 to 26 years of age for the prevention of cervical, vulvar, vaginal, and anal cancers caused by HPV types 16, 18, 31, 33, 45, 52, and 58, pre-cancerous or dysplastic lesions caused by HPV types 6, 11, 16, 18, 31, 33, 45, 52, and 58, and genital warts caused by HPV types 6 and 11. Gardasil 9 is also approved for use in boys 9 to 15 years of age for the prevention of anal cancer caused by HPV types 16, 18, 31, 33, 45, 52, and 58, precancerous or dysplastic lesions caused by HPV types 6, 11, 16, 18, 31, 33, 45, 52, and 58, and genital warts caused by HPV types 6 and 11. Gardasil 9 includes the greatest number of HPV types in any available HPV vaccine. In February, CDC’s Advisory Committee on Immunization Practices voted to include Gardasil 9 in the recommendations for use of HPV vaccines.
Sales of the HIV drug Isentress rose 1.8 percent to $1.67 billion in 2014, primarily reflecting volume growth in Europe and the emerging markets, particularly in Latin America resulting from government tenders, partially offset by volume declines in the United States reflecting competitive pressures. In the first half of 2015, Isentress sales were down 9.8 percent to $760 million due to timing of tender purchases in the emerging markets and volume declines in the United States.
Sales of the nasal allergy product Nasonex fell 17.7 percent in 2014 to $1.1 billion, driven primarily by lower demand in the United States, as well as by lower volumes in Europe and Canada from generic competition. By agreement, generic manufacturers were able to launch a generic version of Nasonex in most European markets on Jan. 1, 2014, and generic versions of Nasonex have since launched in several markets. In the first half of 2015, Nasonex sales fell another 11.6 percent to $504 million.
Sales of the asthma/allergic rhinitis drug Singulair were down 8.7 percent in 2014 to $1.09 billion, primarily reflecting lower sales in Europe as a result of generic competition. In the first half of 2015, Singular sales dropped another 17.5 percent to $457 million.
Keytruda
The biggest story out of Merck’s pipeline in the past year has been its new oncology drug Keytruda. In September 2014, FDA approved Keytruda at a dose of 2 mg/kg every three weeks for treating patients with unresectable or metastatic melanoma and disease progression following ipilimumab and, if BRAF V600 mutation positive, a BRAF inhibitor. This indication was approved under accelerated approval based on tumor response rate and durability of response.
Keytruda is the first anti-PD-1 (programmed death receptor-1) therapy approved in the United States and received FDA’s Breakthrough Therapy designation for advanced melanoma, which was granted based on the significance of early study findings and the unmet medical need. For the recommended 2 mg/kg dose based on data in 89 patients, the overall response rate was 24 percent, with one complete response and 20 partial responses. At the time of analysis, 86 percent of patients with objective responses had ongoing responses with durations ranging from 1.4+ to 8.5+ months, including eight patients with ongoing responses of 6 months or longer. Fourteen percent had progression of disease 2.8, 2.9, and 8.2 months after initial response.
Keytruda is a humanized monoclonal antibody that works by increasing the ability of the body’s immune system to fight advanced melanoma. The drug blocks the interaction between PD-1 and its ligands, PD-L1 and PD-L2, and may affect both tumor cells and healthy cells.
The following month after approval, FDA granted Breakthrough Therapy Designation to Keytruda for the treatment of patients with Epidermal Growth Factor Receptor (EGFR) mutation-negative, and Anaplastic Lymphoma Kinase (ALK) rearrangement-negative non-small cell lung cancer whose disease has progressed on or following platinum-based chemotherapy. The Breakthrough Therapy Designation in advanced NSCLC was supported by data from the ongoing Phase Ib KEYNOTE-001 study.
In March, Merck announced that the randomized, pivotal Phase III study (KEYNOTE-006) investigating Keytruda compared to ipilimumab in the first-line treatment of patients with advanced melanoma had met its two primary endpoints of progression-free survival and overall survival, and that the trial would be stopped early based on the recommendation of the study’s independent Data Monitoring Committee. In KEYNOTE-006, Keytruda demonstrated a statistically significant and clinically meaningful improvement in overall survival and progression-free survival compared to ipilimumab.
In June, FDA accepted for review and granted priority review to the supplemental biologics license application for Keytruda for treating patients with advanced non-small cell lung cancer whose disease has progressed on or after platinum-containing chemotherapy and an FDA-approved therapy for EGFR or ALK genomic tumor aberrations, if present. The sBLA submission was based in part on data from the Phase III KEYNOTE-001 trial, including patients with greater than or equal to 50 percent of tumor cells positive for PD-L1 expression.
In July, the European Commission approved Keytruda for the treatment of advanced (unresectable or metastatic) melanoma in adults. The European Commission approval was based on data from three clinical studies conducted in more than 1,500 first-line and previously-treated patients with advanced melanoma. Keytruda received European Commission regulatory approval based on Phase III data which showed it is the first anti-PD-1 therapy to provide a statistically superior survival benefit as a monotherapy compared to ipilimumab, the current standard of care for advanced melanoma.
In August 2015, FDA accepted for review a supplemental biologics license application for Keytruda for the first-line treatment of unresectable or metastatic melanoma patients, which was based in part on the results of KEYNOTE-006. FDA granted priority review with a PDUFA date of December 19, 2015. Additionally, FDA extended the action date for a separate sBLA for Keytruda for the treatment of patients with ipilimumab-refractory advanced melanoma. The new action date is now December 24, 2015.
Recent product approvals and pipeline updates
In July 2014, Merck announced that the first patient had been enrolled in a global Phase III clinical study of letermovir (MK-8228), an investigational antiviral agent. The multicenter, randomized, placebo-controlled study will evaluate the efficacy and safety of letermovir for the prevention of clinically significant cytomegalovirus infection in adult (18 years and older) CMV-seropositive recipients of allogeneic hematopoietic stem cell transplants.
In the study, letermovir will be administered once daily, either as an oral tablet or IV formulation, for 14 weeks after transplant. The primary outcome measure of the study will be the percentage of participants with clinically significant CMV infection through 24 weeks after transplant who were administered letermovir compared to placebo. Merck expects approximately 540 patients will be enrolled in the study at more than 70 centers in 20 countries, including the United States. The estimated study completion date is July 2017.
In September 2014, FDA designated relebactam (previously known as MK-7655), Merck’s investigational beta-lactamase inhibitor, as a Qualified Infectious Disease Product (QIDP) with designated fast track status. The QIDP and fast track designations apply to intravenous use of relebactam for the treatment of complicated urinary tract infections, complicated intra-abdominal infections, and hospital-acquired bacterial pneumonia/ventilator-associated bacterial pneumonia. QIDP designation offers certain incentives for the development of new antibiotics, including a five-year extension of the data exclusivity provisions under the Hatch-Waxman Act and priority review of the new drug application when filed.
Relebactam is an investigational, class A and C, beta-lactamase inhibitor that is being evaluated in combination with imipenem/cilastatin in ongoing Phase II clinical trials for the treatment of complicated urinary tract infections and complicated intra-abdominal infections. In preclinical studies, relebactam administered in combination with imipenem/cilastatin demonstrated antibacterial activity against a broad range of Gram-negative and beta-lactam-resistant pathogens. Merck plans to initiate Phase III studies with relebactam in combination with imipenem/cilastatin in 2015.
That same month, Merck announced data from the pivotal Phase III fracture outcomes study for odanacatib in postmenopausal women with osteoporosis. Odanacatib is Merck’s investigational once-weekly cathepsin K inhibitor. In the Long-Term Odanacatib Fracture Trial, odanacatib met its primary endpoints and significantly reduced the risk of osteoporotic hip, spine, and nonvertebral fractures compared with placebo. The company expects to submit an NDA to FDA for odanacatib in 2015.
Also in September 2014, Merck announced the presentation of the first data from the Phase III clinical development program for omarigliptin, the company’s investigational once-weekly DPP-4 inhibitor for the treatment of type 2 diabetes. In a study in Japanese patients, omarigliptin provided comparable efficacy and tolerability to Merck’s Januvia. Merck is supporting omarigliptin with a global clinical development program that includes 10 Phase III clinical trials involving about 8,000 patients with type 2 diabetes. These are the first Phase III data presented for omarigliptin and are the pivotal data for filing in Japan, which occurred in November 2014.
In October 2014, FDA accepted a biologics license application for Merck and Sanofi Pasteur’s investigational pediatric hexavalent vaccine, DTaP5-IPVHib-HepB1. If approved, it would be the first pediatric combination vaccine in the United States designed to help protect against six important diseases — diphtheria, tetanus, pertussis (whooping cough), polio (poliovirus types 1, 2, and 3), invasive disease caused by Haemophilus influenzae type b (Hib), and hepatitis B.
The BLA was based on a Phase III randomized, open-label, active-comparator controlled clinical trial with more than 1,400 infants at multiple centers across the United States, evaluating the safety and immunogenicity of the pediatric hexavalent vaccine versus licensed comparator vaccines. The investigational and comparator vaccines were given at two, four, and six months of age. For 18 of the 19 comparisons (all but one pertussis comparison), the antibodies in the group 1 infants were non-inferior to those in the group 2 infants. After the toddler dose of licensed vaccines, antibodies were again measured; the group 1 antibodies were non-inferior to those in group 2 for all 8 pertussis comparisons.
In November, Merck announced the presentation of results from a Phase IIb clinical trial evaluating the safety and efficacy of once-daily oral doravirine, an investigational next-generation non-nucleoside reverse transcriptase inhibitor (NNRTI), plus tenofovir/emtricitabine (TDF/FTC) compared to efavirenz plus TDF/FTC in previously untreated patients with HIV-1 infection. The primary safety analysis from the expansion phase of the study compared the incidence of central nervous system adverse events by week 8 in patients who received doravirine 100 milligrams plus TDF/FTC versus patients who received efavirenz with TDF/FTC. The results showed a significantly lower incidence of one or more of reported CNS AEs (all causality) among the doravirine-treated group compared to the efavirenz-treated group (22.2 percent versus 43.5 percent respectively). Additional follow-up data through 48 weeks of treatment showed a 76 percent overall virologic response rate for all doravirine doses that is comparable to 71 percent reported for patients administered efavirenz. In addition, all treatment groups showed increased CD4 cell counts relative to baseline, consistent with the 24-week findings. After 48 weeks of treatment, patients in the dose ranging part of the study who received doravirine demonstrated a lower overall incidence of drug-related adverse events (36.7 percent) than those who received efavirenz (57.1 percent).
Merck planned to initiate the first Phase III clinical trial of doravirine by the end of 2014. The study will enroll treatment-naïve patients and compare the efficacy, safety and tolerability of doravirine and ritonavir-boosted darunavir, both in combination with other anti-retroviral therapy.
In February, Merck launched Belsomra, its newest insomnia compound, which had been approved by FDA the previous August. The new product is indicated for the treatment of insomnia in adults who have difficulty falling asleep and/or staying asleep. Belsomra is the only orexin receptor antagonist approved for the treatment of insomnia in the United States. Orexin is one of the many neurotransmitters in the brain involved in promoting wakefulness, and Belsomra selectively blocks orexin receptors. In doing this, Belsomra is thought to suppress wake drive in the brain.
In March, Merck was informed that the FDA had canceled the meeting of the Anesthetic and Analgesic Drug Products Advisory Committee that had been scheduled to discuss the resubmission of the new drug application for sugammadex injection, the company’s investigational medicine for the reversal of neuromuscular blockade induced by rocuronium or vecuronium. FDA advised Merck that it plans to conduct additional site inspections related to a hypersensitivity study (Protocol 101). The agency has indicated it plans to conduct these additional inspections prior to an advisory committee meeting and completion of their review.
In April, Merck announced the first presentations of data from the company’s ongoing C-EDGE pivotal Phase III clinical trial program evaluating the investigational once-daily tablet grazoprevir/elbasvir in patients with or without cirrhosis who are infected with chronic hepatitis C virus (HCV) genotypes 1, 4 or 6. Patients in both the HCV infected, treatment-naïve (C-EDGE TN), and HIV/HCV co-infected, treatment-naïve (C-EDGE CO-INFXN) trials treated for 12 weeks achieved rates of sustained virologic response 12 weeks after the completion of treatment (SVR12) of 95 percent. HCV infected, treatment-experienced patients (C-EDGE TE) treated with or without ribavirin (RBV) for 12 weeks achieved SVR12 rates of 94 percent and 92 percent, respectively, and those treated for 16 weeks achieved SVR12 rates of 97 percent and 92 percent, respectively. The grazoprevir/elbasvir combination therapy was granted Priority Review status by FDA in July.
Also in April, Merck announced the results from the pivotal Phase III clinical studies of Zerbaxa (ceftolozane/tazobactam) for Injection in complicated urinary tract infections (cUTI) and complicated intra-abdominal infections (cIAI), respectively. Both studies met the pre-specified primary endpoints, and results of the secondary analyses for the studies were consistent with and supportive of the primary outcomes.
Approved in the United States in December and acquired by Merck in the Cubist transaction, Zerbaxa is indicated for use in combination with metronidazole in adult patients for the treatment of complicated intra-abdominal infections caused by Enterobacter cloacae, Escherichia coli, Klebsiella oxytoca, Klebsiella pneumoniae, Proteus mirabilis, Pseudomonas aeruginosa, Bacteroides fragilis, Streptococcus anginosus, Streptococcus constellatus, and Streptococcus salivarius. Zerbaxa is also indicated in adult patients for the treatment of complicated urinary tract infections, including pyelonephritis, caused by Escherichia coli, Klebsiella pneumoniae, Proteus mirabilis, and Pseudomonas aeruginosa.
In June, Merck announced results from a Phase III study investigating the safety and efficacy of single-dose Emend for Injection, the company’s substance P/neurokinin (NK-1) receptor antagonist, in combination with other antivomiting medicines, for the prevention of chemotherapy-induced nausea and vomiting (CINV) in adult cancer patients receiving moderately emetogenic (vomit-inducing) chemotherapy (MEC). In the study, the first to evaluate an intravenous NK-1 receptor antagonist for the prevention of CINV associated with MEC, the single-dose Emend for Injection regimen provided greater protection from nausea and vomiting following administration of chemotherapy versus an active control of placebo with other anti-vomiting medicines.
In the United States, the single-dose regimen of Emend for Injection is approved for use associated with highly emetogenic cancer chemotherapy. Merck plans to submit these recent data to FDA in the second half of 2015 to seek approval for a regimen containing single-dose Emend for Injection for the prevention of CINV associated with MEC.
Also in June, Merck and partner developer Samsung Bioepis Co. announced that Phase III clinical studies of SB4, an investigational biosimilar of Enbrel, and SB2, an investigational biosimilar of Remicade, met their primary endpoints, demonstrating equivalence to the originator medicine in patients with moderate to severe rheumatoid arthritis despite methotrexate therapy. The primary endpoint in the two studies was the American College of Rheumatology 20 percent response criteria (ACR20), at week 24 and at week 30 of treatment, respectively. In these studies, SB4 and SB2 demonstrated a safety profile equivalent to the originator medicines.
In September, Merck and Samsung Bioepis announced the approval of Brenzys, their biosimilar of Enbrel, by the Ministry of Food and Drug Safety in Korea. Brenzys is indicated for the treatment of rheumatoid arthritis, psoriatic arthritis, axial spondyloarthritis (non-radiographic axial spondyloarthritis and ankylosing spondylitis), and psoriasis in adult patients (age 18 years and older).
The approval of Brenzys in Korea represents the first product approval under Merck’s collaboration with Samsung Bioepis, which is designed to offer high-quality biosimilar alternatives to existing biologic medicines to help address patient and healthcare system needs worldwide. Merck plans to launch Brenzys in South Korea by the end of this year or early next year.
