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Merck 2022: The three towers

Merck’s exceptional revenue growth in 2021 and the first half of 2022 came thanks to three big brands, one of which is not even approved by the FDA …

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Merck’s exceptional revenue growth in 2021 and the first half of 2022 came thanks to three big brands, one of which is not even approved by the FDA yet. 

By Joshua Slatko • josh.slatko@medadnews.com

 

Merck & Co.

126 East Lincoln Avenue

Rahway, NJ 07065

908-740-4000 • merck.com

Financial Performance
  2021 2020 1H 2022 1H 2021
Revenue $48,704 $41,518 $30,494 $22,029
Net income $13,049 $7,067 $8,254 $4,724
Diluted EPS $5.14 $2.78 $3.25 $1.86
R&D expense $12,245 $13,397 $5,374 $6,732

All figures are in millions of dollars, except EPS.

Best-selling products

All sales are in millions of dollars.

2021 sales

  • Keytruda $17,186 
  • Gardasil $5,673 
  • Januvia $3,324 
  • ProQuad/MMR II/Varivax $2,135 
  • Janumet $1,964 
  • Bridion $1,532 
  • Lynparza $989
  • Lagevrio $952
  • Pneumovax 23 $893 
  • Simponi $825 
  • RotaTeq $807 
  • Isentress $769 
  • Lenvima $704

1H 2022 sales

  • Keytruda $10,061 
  • Lagevrio $4,424
  • Gardasil $3,133 
  • Januvia $1,535 
  • ProQuad/MMR II/Varivax $1,047 
  • Janumet $931 
  • Bridion $821 
  • Lynparza $541 
  • Lenvima $459 
  • RotaTeq $389 
  • Simponi $366 
  • Pneumovax 23 $325 
  • Isentress $305

Outcomes Creativity Index Score: 9

  • Manny Awards — N/A
  • Cannes Lions — N/A
  • Clio Health — N/A
  • Creative Floor Awards — 4
  • London International Awards – N/A
  • MM+M Awards — 4
  • One Show — 1

 

CEO and President Robert M. Davis

Merck in 2022 looks like a company of three towers. The first, Keytruda, continues to break sales records and add indications at a furious pace, with $20 billion in sales for the year not out of the question. The second, Gardasil, has been around a long time but is enjoying a late-career bounce as the COVID pandemic fades. And the third, a tower that did not even exist just a year ago, is the COVID treatment Lagevrio, a drug that has not even been finally approved by the FDA yet, which went from launch via EUA in December 2021 to second place in the company’s portfolio through two quarters of 2022. The three towers together accounted for the large majority of Merck’s top-line growth in 2021, and nearly all of it in the first half of 2022. 

“I continue to be immensely proud of how the Merck team is performing in all facets of our business — scientifically, commercially and operationally,” said Robert M. Davis, CEO and president, in the company’s Q2 2022 earnings announcement. “Our strategy is working and our future is bright. I am very confident that we are well-positioned to achieve our near- and long-term goals, anchored by our commitment to deliver innovative medicines and vaccines to patients and value to all of our stakeholders, including shareholders.”

Merck’s top-line revenue in 2021 was $48.7 billion, up 17.3 percent for the year. Nearly all of that growth fell right into the bottom line, with net income rising 84.6 percent to $13.05 billion and earnings per share nearly doubling from $2.78 to $5.14. The trend continued into 2022, with top-line revenue for the first two quarters up 38.4 percent to $30.49 billion, net income up another 74.7 percent to $8.25 billion, and EPS rising by $1.39 to $3.25 per share. Merck leaders project that the company’s full-year EPS for 2022 will fall between $5.89 and $5.99. 

Acquisitions and partnerships

In July, Merck and Orion Corp. announced a global development and commercialization agreement for Orion’s investigational candidate ODM-208 and other drugs targeting cytochrome P450 11A1 (CYP11A1), an enzyme important in steroid production. ODM-208 is an oral, non-steroidal inhibitor of CYP11A1 being evaluated in a Phase II clinical trial for the treatment of patients with metastatic
castration-resistant prostate cancer.

Under the terms of the agreement, Orion and Merck will jointly develop and commercialize ODM-208. Merck made an upfront payment to Orion of $290 million. Orion is responsible for the manufacture of clinical and commercial supply of ODM-208. In addition, the contract provides both parties with an option to convert the initial joint development and commercialization agreement into a global exclusive license to Merck. If the option is exercised, Merck would assume full responsibility for all accrued and future development and commercialization expenses associated with the program. Orion would be eligible to receive milestone payments associated with progress in the development and commercialization of ODM-208 as well as tiered double-digit royalties on sales if the product is approved.

In August, Merck and Orna Therapeutics, a biotechnology company pioneering a new investigational class of engineered circular RNA (oRNA) therapies, announced a collaboration agreement to discover, develop, and commercialize multiple programs, including vaccines and therapeutics in the areas of infectious disease and oncology.

Under the terms of the agreement, Merck made an upfront payment to Orna of $150 million. In addition, Orna is eligible to receive up to $3.5 billion in development, regulatory, and sales milestones associated with the progress of the multiple vaccine and therapeutic programs, as well as royalties on any approved products derived from the collaboration. Orna will retain rights to its
oRNA-LNP technology platform and will continue to advance other wholly owned programs in areas such as oncology and genetic disease. Merck will also invest $100 million of equity in Orna’s recently completed Series B financing round.

Orna’s proprietary oRNA technology creates oRNAs from linear RNAs by self-circularization. oRNA molecules have been shown to have greater stability in vivo than linear mRNA and have the potential to produce larger quantities of therapeutic proteins inside the body. Newly synthesized oRNA molecules are more compactly packaged into custom lipid nanoparticles, which Orna has engineered to target key tissues in the body. Preclinical data have demonstrated the potential of oRNA expression and delivery as an approach for further development in multiple areas, including vaccines and oncology therapeutics.

Product performance

Keytruda

Keytruda is tracking towards $20 billion in sales for 2022, as well as adding a long list of new approvals from the European Commission.

Firming up its place as the world’s best-selling oncologic medicine, Keytruda generated $17.19 billion in sales for Merck in 2021, an improvement of 19.5 percent over the previous year. According to company leaders, sales in the United States continued to build across the multiple approved indications, in particular for the treatment of advanced NSCLC as monotherapy, and in combination with chemotherapy for both nonsquamous and squamous metastatic NSCLC, along with continued uptake in the TNBC, RCC, HNSCC, MSI-H cancer, and esophageal cancer indications. Keytruda sales growth in international markets reflected continued uptake predominately for the NSCLC, HNSCC, and RCC indications, particularly in Europe. In the first half of 2022, sales of Keytruda grew another 24.6 percent to $10.06 billion.

In January, the European Commission approved Keytruda as monotherapy for the adjuvant treatment of adults with renal cell carcinoma at increased risk of recurrence following nephrectomy, or following nephrectomy and resection of metastatic lesions. This approval was based on results from the Phase III KEYNOTE-564 trial, in which Keytruda demonstrated a statistically significant improvement in disease-free survival, reducing the risk of disease recurrence or death by 32 percent after a median follow-up of 23.9 months compared to placebo, in patients at increased risk of recurrence (defined in the clinical trial protocol as intermediate-high or high risk following nephrectomy and those with resected advanced disease). Updated efficacy results with a median follow-up time of 29.7 months demonstrated Keytruda reduced the risk of disease recurrence or death by 37 percent compared with placebo.

Also in January, Merck announced the final results from the Phase III KEYNOTE-394 trial investigating Keytruda plus best supportive care in patients in Asia with advanced hepatocellular carcinoma previously treated with sorafenib. KEYNOTE-394 is the first trial with an anti-PD-1/L1 as a second-line monotherapy treatment to show an improvement in overall survival, progression-free survival, and objective response rate versus placebo plus BSC for these patients.

Keytruda plus BSC demonstrated a statistically significant and clinically meaningful improvement in the primary endpoint of OS, reducing the risk of death by 21 percent compared to placebo plus BSC for patients with previously treated advanced HCC. For patients treated with Keytruda plus BSC, median OS was 14.6 months compared to 13.0 months for patients treated with placebo plus BSC. The percentage of patients who were alive at two years was 34.3 percent for Keytruda plus BSC compared to 24.9 percent for placebo plus BSC.

That same month, Merck and Eisai announced the publication of results from the Phase III KEYNOTE-775/Study 309 trial evaluating the combination of Keytruda plus Lenvima, versus chemotherapy (treatment of physician’s choice of doxorubicin or paclitaxel) for patients with advanced endometrial carcinoma following at least one prior platinum-based regimen in any setting. Results showed that the Keytruda plus Lenvima combination demonstrated statistically significant improvements in the dual primary endpoints of overall survival and progression-free survival compared to chemotherapy.

In March, FDA approved Keytruda as a single agent for the treatment of patients with advanced endometrial carcinoma that is microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR), as determined by an FDA-approved test, who have disease progression following prior systemic therapy in any setting and are not candidates for curative surgery or radiation. The approval was based on new data from Cohorts D and K of the KEYNOTE-158 trial. The objective response rate was 46 percent for patients who received Keytruda, including a complete response rate of 12 percent and a partial response rate of 33 percent, at a median follow-up time of 16.0 months. Of the responding patients, 68 percent had responses lasting 12 months or longer, and 44 percent had responses lasting 24 months or longer. Median duration of response was not reached.

Additionally in March, Merck announced results from the pivotal Phase III KEYNOTE-091 trial, also known as EORTC-1416-LCG/ETOP-8-15 – PEARLS. The study found that adjuvant treatment with Keytruda significantly improved disease-free survival, one of the dual primary endpoints, reducing the risk of disease recurrence or death by 24 percent compared to placebo in patients with stage IB (≥4 centimeters) to IIIA non-small cell lung cancer following surgical resection regardless of PD-L1 expression. Median DFS was 53.6 months for Keytruda versus 42.0 months for placebo, an improvement of nearly one year. 

There was also an improvement in DFS for patients whose tumors express PD-L1 (tumor proportion score [TPS] ≥50%) treated with Keytruda compared to placebo, the other dual primary endpoint; these results did not reach statistical significance per the pre-specified statistical plan. Among these patients, median DFS was not reached in either arm. Additionally, a favorable trend in overall survival, a key secondary endpoint, was observed for Keytruda versus placebo regardless of PD-L1 expression; these OS data were not mature and did not reach statistical significance at the time of this interim analysis. The trial will continue to evaluate DFS in patients whose tumors express high levels of PD-L1 (TPS ≥50%) and OS.

Lynparza, Merck

Lynparza is looking to crack the blockbuster barrier for the first time for Merck in 2022 as the drug earned a new approval in breast cancer from the FDA in March.

That same month, Merck stopped the Phase III KEYLYNK-010 trial investigating Keytruda in combination with Lynparza for the treatment of patients with metastatic castration-resistant prostate cancer who progressed after treatment with chemotherapy and either abiraterone acetate or enzalutamide. Merck discontinued the study following the recommendation of an independent Data Monitoring Committee after the DMC reviewed data from a planned interim analysis. At the interim analysis, the combination of Keytruda and Lynparza did not demonstrate a benefit in overall survival, one of the study’s dual primary endpoints, compared to the control arm of either abiraterone acetate or enzalutamide. The trial’s other dual primary endpoint, radiographic progression free survival, was evaluated at an earlier interim analysis and did not demonstrate improvement compared to the control arm.

In April, the European Commission approved Keytruda as monotherapy for the treatment of microsatellite instability-high (MSI-H) or deficient mismatch repair (dMMR) tumors in adults with unresectable or metastatic colorectal cancer after previous
fluoropyrimidine-based combination therapy; advanced or recurrent endometrial carcinoma, who have disease progression on or following prior treatment with a platinum-containing therapy in any setting and who are not candidates for curative surgery or radiation; unresectable or metastatic gastric, small intestine or biliary cancer, who have disease progression on or following at least one prior therapy.

The approvals were based on data from KEYNOTE-164 (NCT02460198) and KEYNOTE-158 (NCT02628067), multicenter, non-randomized, open-label Phase II trials evaluating Keytruda in patients with advanced MSI-H or dMMR solid tumors. In colorectal cancer, the ORR was 34 percent, including a complete response rate of 10 percent and a partial response rate of 24 percent, at a median follow-up time of 37.3 months. Median DOR was not reached, and of responding patients, 92 percent had responses lasting at least three years.

In endometrial cancer, the ORR was 51 percent, including a CR rate of 16 percent and a PR rate of 35 percent, at a median follow-up time of 21.9 months. Median DOR was not reached, and of responding patients, 85 percent had responses lasting at least one year, and 60 percent had responses lasting at least three years.

In gastric cancer, the ORR was 37 percent, including a CR rate of 14 percent and a PR rate of 24 percent, at a median follow-up time of 13.9 months. Median DOR was not reached, and of responding patients, 90 percent had responses lasting at least one year, and 81 percent had responses lasting at least three years.

In small intestine cancer, the ORR was 56 percent, including a CR rate of 15 percent and a PR rate of 41 percent, at a median follow-up time of 29.1 months. Median DOR was not reached, and of responding patients, 93 percent had responses lasting at least one year, and 73 percent had responses lasting at least three years.

In biliary cancer, the ORR was 41 percent, including a CR rate of 14 percent and a PR rate of 27 percent, at a median follow-up time of 19.4 months. Median DOR was 30.6 months, and of responding patients, 89 percent had responses lasting at least one year, and 42 percent had responses lasting at least three years.

Also in April, the European Commission approved Keytruda in combination with chemotherapy, with or without bevacizumab, for the treatment of persistent, recurrent or metastatic cervical cancer in adults whose tumors express PD-L1 (Combined Positive Score [CPS] ≥1). This approval was based on results from the Phase III KEYNOTE-826 trial, in which Keytruda plus chemotherapy with or without bevacizumab demonstrated a statistically significant improvement in overall survival and progression-free survival compared to chemotherapy with or without bevacizumab in this patient population. Additionally, more patients responded to the Keytruda regimen, with an objective response rate of 68 percent versus 50 percent, respectively.

In the KEYNOTE-826 trial, median OS in patients whose tumors express PD-L1 CPS ≥1 was not reached for the Key­truda regimen versus 16.3 months for the chemotherapy regimen. Median PFS in patients whose tumors express PD-L1 CPS ≥1 was 10.4 months for the Keytruda regimen versus 8.2 months for the chemotherapy regimen. The ORR in patients whose tumors express PD-L1 CPS ≥1 was 68 percent, including a complete response rate of 23 percent and a partial response rate of 45 percent for patients receiving the Keytruda regimen versus 50 percent, including a CR rate of 13 percent and a PR rate of 37 percent for patients receiving the chemotherapy regimen.

In May, the European Commission approved Keytruda in combination with chemotherapy as neoadjuvant treatment, and then continued as monotherapy as adjuvant treatment after surgery for adults with locally advanced or early-stage triple-negative breast cancer (TNBC) at high risk of recurrence. The approval was based on results from the pivotal Phase III KEYNOTE-522 trial, in which Keytruda in combination with chemotherapy before surgery and continued as a single agent after surgery prolonged event-free survival, reducing the risk of EFS events or death by 37 percent compared to neoadjuvant chemotherapy alone in this patient population. Median follow-up time for all patients was 37.8 months. KEYNOTE-522 was the first large, randomized Phase III study to report a statistically significant and clinically meaningful EFS result among patients with stage II and III TNBC. With this decision, this Keytruda combination became the first immunotherapy option approved for patients in the European Union in this setting.

In June, the European Commission approved Keytruda as monotherapy for the adjuvant treatment of adults and adolescents aged 12 years and older with stage IIB or IIC melanoma and who have undergone complete resection. Additionally, the EC approved expanding the indications for Keytruda in advanced (unresectable or metastatic) melanoma and stage III melanoma (as adjuvant treatment following complete resection) to include adolescent patients aged 12 years and older.

The approval of Keytruda for the adjuvant treatment of patients with resected stage IIB or IIC melanoma was based on results from the Phase III KEYNOTE-716 trial, in which Key­truda significantly prolonged recurrence-free survival, reducing the risk of disease recurrence or death by 39 percent compared to placebo in this patient population at a median follow-up of 20.5 months. Key­truda in this adjuvant setting also significantly prolonged distant metastasis-free survival, reducing the risk of distant metastasis by 36 percent compared to placebo in this patient population at a median follow-up of 26.9 months.

In July, Merck announced that the Phase III KEYNOTE-412 trial evaluating Keytruda with concurrent chemoradiation therapy (CRT) followed by Keytruda as maintenance therapy (the Keytruda regimen), did not meet its primary endpoint of event-free survival for the treatment of patients with unresected locally advanced head and neck squamous cell carcinoma. At the final analysis of the study, there was an improvement in EFS for patients who received the Keytruda regimen compared to placebo plus CRT; however, these results did not meet statistical significance per the pre-specified statistical plan.

In August, Merck and Eisai announced that the Phase III LEAP-002 trial investigating Keytruda plus Lenvima versus Lenvima monotherapy did not meet its dual primary endpoints of overall survival and progression-free survival as a first-line treatment for patients with unresectable hepatocellular carcinoma (uHCC). There were trends toward improvement in OS and PFS for patients who received Keytruda plus Lenvima versus Lenvima monotherapy; however, these results did not meet statistical significance per the pre-specified statistical plan. The median OS of the Lenvima monotherapy arm in LEAP-002 was longer than that observed in previously reported clinical trials evaluating Lenvima monotherapy in uHCC. Merck and Eisai are studying the Keytruda plus Lenvima combination through the LEAP (LEnvatinib And Pembrolizumab) clinical program in more than 10 different tumor types (endometrial carcinoma, hepatocellular carcinoma, melanoma, non-small cell lung cancer, renal cell carcinoma, head and neck cancer, biliary tract cancer, colorectal cancer, gastric cancer, esophageal cancer, glioblastoma, and pancreatic cancer) across more than 15 clinical trials.

Also in August, Merck announced that the Phase III KEYNOTE-921 trial evaluating Keytruda in combination with chemotherapy (docetaxel) compared to chemotherapy alone did not meet its dual primary endpoints of overall survival and radiographic progression-free survival for the treatment of patients with metastatic castration-resistant prostate cancer (mCRPC). In the study, there were modest trends toward an improvement in both OS and rPFS for patients who received Keytruda plus chemotherapy compared with chemotherapy alone; however, these results did not meet statistical significance per the pre-specified statistical plan.

Gardasil, Merck

Gardasil sales rose by 44.1 percent to $5.67 billion in 2021, driven primarily by strong global demand, particularly in China.

The HPV vaccine Gardasil brought in $5.67 billion in sales for Merck in 2021, enjoying impressive growth of 44.1 percent. According to company leaders, this was driven primarily by strong global demand, particularly in China, as well as increased supply. Higher pricing in China and the United States also contributed to sales growth in 2021. In the first half of 2022, sales of Gardasil were up another 45.7 percent to $3.13 billion.

Sales of the type 2 diabetes products Januvia and Janumet were both relatively flat in 2021, with Januvia up 0.5 percent to $3.32 billion and Janumet down 0.4 percent to $1.96 billion. Merck leaders say this reflected continued pricing pressure and lower demand in the United States, largely offset by higher demand in certain international markets, particularly in China. Januvia and Janumet were set to lose market exclusivity in the United States in January 2023, in the EU in September 2022, and in China in July 2022. In the first half of 2022, Januvia sales fell 3.6 percent to $1.54 billion, while sales of Janumet declined 3.2 percent to $931 million.

Merck’s ProQuad/MMR II/Varivax family of vaccines generated sales of $2.14 billion in 2021, an improvement of 13.7 percent over the previous year. According to company executives, this was due to higher sales in the United States reflecting higher demand driven by the ongoing COVID-19 pandemic recovery, as well as higher pricing. In the first half of 2022, ProQuad/MMR II/Varivax sales rose another 8.5 percent to $1.05 billion. 

The neuromuscular blocking agent reversal drug Bridion brought in sales of $1.53 billion in 2021, up 27.9 percent compared with 2020. Merck leaders said this was due to higher demand globally, particularly in the United States and Europe, attributable to the COVID-19 pandemic recovery, as well as increased usage of neuromuscular blockade reversal agents and Bridion’s growing share within the class. Bridion was also approved by FDA in June 2021 for pediatric patients aged 2 years and older undergoing surgery. First-half 2022 Bridion sales were up by another 12.9 percent to $821 million. 

Developed and marketed in partnership with AstraZeneca, the oncologic Lynparza generated sales of $989 million for Merck in 2021, enjoying growth of 36.4 percent. Company executives say this was due to continued uptake across the multiple approved indications in the United States, Europe, Japan, and China. In the first half of 2022 Lynparza sales rose another 13.9 percent to $541 million.

In March, the FDA approved Lynparza for the adjuvant treatment of adult patients with deleterious or suspected deleterious germline BRCA-mutated (gBRCAm), human epidermal growth factor receptor 2 (HER2)-negative high-risk early breast cancer who have been treated with neoadjuvant or adjuvant chemotherapy. The approval was based on results from the Phase III OlympiA trial, including data for the trial’s primary endpoint of invasive disease-free survival. In the OlympiA trial, Lynparza demonstrated a statistically significant improvement in IDFS, reducing the risk of invasive breast cancer recurrences, second cancers, or death by 42 percent versus placebo. Updated results from the OlympiA trial showed Lynparza reduced the risk of death by 32 percent versus placebo, a statistically significant improvement in OS, a key secondary endpoint. The European Commission subsequently approved Lynparza for a similar indication in August. 

In August, the FDA accepted and granted priority review to an sNDA for Lynparza in combination with abiraterone and prednisone or prednisolone for the treatment of adult patients with metastatic castration-resistant prostate cancer. The sNDA was based on results from the Phase III PROpel trial. In PROpel, Lynparza in combination with abiraterone and prednisone or prednisolone reduced the risk of disease progression or death by 34 percent versus placebo plus abiraterone and prednisone or prednisolone. Median radiographic progression-free survival was 24.8 months for the Lynparza plus abiraterone arm versus 16.6 months for the placebo plus abiraterone arm.

In September, AstraZeneca and Merck announced long-term follow-up results from the Phase III PAOLA-1 and SOLO-1 trials in first-line advanced ovarian cancer, which represent the longest-term data for any PARP inhibitor in this setting. The Phase III PAOLA-1 trial evaluated Lynparza in combination with bevacizumab as first-line maintenance therapy in patients with advanced ovarian cancer, who were without evidence of disease after surgery or following response to platinum-based chemotherapy. Final overall survival, a key secondary endpoint, in those who received Lynparza plus bevacizumab was 56.5 months versus 51.6 months with bevacizumab alone in patients with newly diagnosed advanced ovarian cancer. These OS results were not statistically significant.

In an exploratory subgroup analysis of HRD-positive patients, Lynparza plus bevacizumab provided a clinically meaningful improvement in OS, reducing the risk of death by 38 percent versus bevacizumab alone. Reportedly, 65.5 percent of patients who received Lynparza plus bevacizumab were still alive at five years versus 48.4 percent who received bevacizumab alone. Lynparza plus bevacizumab also improved median progression-free survival to nearly four years (46.8 months) versus 17.6 months with bevacizumab plus placebo, and 46.1 percent of patients who received Lynparza in combination with bevacizumab remain progression free versus 19.2 percent of patients who received bevacizumab alone. The safety and tolerability profile of Lynparza in this trial was in line with that observed in prior clinical trials, with no new safety signals. Adverse events of special interest for Lynparza in combination with bevacizumab versus bevacizumab alone included myelodysplastic syndrome/acute myeloid leukemia/aplastic anemia (1.7 percent versus 2.2 percent), new primary malignancies (4.1 percent versus 3.0 percent) and pneumonitis/interstitial lung disease/bronchiolitis (1.3 percent versus 0.7 percent).

The Phase III SOLO-1 trial evaluated Lynparza as monotherapy as first-line maintenance therapy in patients with advanced ovarian cancer, who were without evidence of disease after surgery or following response to platinum-based chemotherapy. In the trial, Lynparza demonstrated a clinically meaningful improvement in OS versus placebo in patients with germline BRCA-mutated (gBRCAm) newly diagnosed advanced ovarian cancer, reducing the risk of death by 45 percent versus placebo (not statistically significant). Median OS was not reached with Lynparza versus 75.2 months with placebo. At the seven-year descriptive OS analysis, 67 percent of Lynparza patients were alive versus 47 percent of placebo patients (44 percent of whom had a subsequent PARP inhibitor), and 45 percent of Lynparza patients versus 21 percent of placebo patients were alive and had not received a first subsequent treatment. Additional data showed median time to first subsequent therapy (TFST) was 64.0 months with Lynparza versus 15.1 months with placebo.

Lagevrio, Merck

The Merck/Ridgeback COVID drug Lagevrio went from zero to about $5.37 billion in sales from December 2021 through June 2022.

The COVID treatment molnupiravir, now known as Lagevrio, received an emergency use authorization from FDA in December 2021 and managed to generate $952 million in sales for Merck through the end of the year from a standing start. In the first half of 2022, sales of Lagevrio totaled $4.42 billion, pushing it quickly to second in sales in Merck’s entire portfolio. 

In April, Merck and partner developer Ridgeback Biotherapeutics announced final analyses evaluating virologic outcomes throughout and following a five-day course of Lagevrio as part of the Phase III MOVe-OUT trial, which studied Lagevrio versus placebo for the treatment of COVID-19 in non-hospitalized adults with mild-to-moderate COVID-19 who were at high risk for progressing to severe disease. In participants with infectious virus isolated at baseline and for whom post-baseline infectivity data were available, Lagevrio was associated with more rapid elimination of infectious virus than placebo. At Day 3 of treatment, among patients with infectious virus at baseline, infectious SARS-CoV-2 was detected in 0.0 percent of patients who received Lagevrio, compared with 20.8 percent of patients who received placebo. At Day 5, infectious virus was detected in 0.0 percent of patients in the Lagevrio arm compared with 2.2 percent in the placebo arm. At Day 10, no infectious virus was detected in either arm for patients with infectious virus at baseline. Lagevrio was also associated with greater mean reductions from baseline in SARS-CoV-2 RNA than placebo from Days 3 through 10, though Lagevrio and placebo were associated with comparable rates of viral RNA clearance through Day 29.

In June, Merck and Ridgeback announced additional data from the Phase III MOVe-OUT trial evaluating Lagevrio in non-hospitalized adults with mild-to-moderate COVID-19 who were at high risk for progressing to severe disease. Analyses of pre-specified exploratory endpoints indicate that a lower proportion of Lagevrio-treated participants in the modified intent-to-treat (MITT) population had an acute care visit or a COVID-19-related acute care visit versus placebo-treated participants in the MITT population: 7.2 percent of participants who received Lagevrio reported an acute care visit through Day 29, versus 10.6 percent of placebo participants, with a relative risk reduction of 32.1 percent; 6.6 percent of participants who received Lagevrio reported a COVID-19-related acute care visit, versus 10.0 percent of placebo participants, with a RRR of 33.8 percent. 

Based on a post hoc analysis, fewer Lagevrio-treated participants in the MITT population required respiratory interventions (including conventional oxygen therapy, a high-flow heated and humidified device, noninvasive mechanical ventilation, or invasive mechanical ventilation) versus placebo-treated participants, with a RRR of 34.3 percent for all respiratory interventions. Based on additional post hoc analyses, participants in the safety population who received Lagevrio showed earlier and larger reductions in mean C-reactive protein (CRP) values, and earlier and larger improvements in mean change from baseline oxygen saturation (SpO2) values, compared with participants who received placebo. The safety population consisted of all participants who had undergone randomization and had received at least one dose of Lagevrio.

Post hoc analyses also suggest that among the subgroup of participants who were hospitalized after randomization in MOVe-OUT, the median time to hospital discharge was nine days for participants who received Lagevrio, versus 12 days in the placebo group. Consistent with the full MITT population data, post hoc analyses also suggest that fewer Lagevrio-treated participants who were hospitalized after randomization required respiratory interventions versus placebo-treated participants, with a RRR of 21.3 percent for all respiratory interventions.

Lenvima, Merck

Sales of the oncologic Lenvima rose 21.4 percent in 2021 to $704 million.

Being developed as part of a collaboration with Eisai, the oncologic Lenvima produced $704 million in sales for Merck in 2021, an improvement of 21.4 percent. Company leaders credited this to higher demand in the United States and China. In the first half of 2022, Lenvima sales rose another 48.1 percent to $459 million. 

In the pipeline

In January, the FDA issued a Complete Response Letter regarding Merck’s New Drug Application for gefapixant, an investigational, non-narcotic, orally administered selective P2X3 receptor antagonist, under development for the treatment of refractory chronic cough or unexplained chronic cough in adults. In the CRL, FDA requested additional information related to measurement of efficacy. The CRL was not related to the safety of gefapixant.

In March, Merck announced the presentation of findings from a systematic literature review and meta-analysis of data from real-world observational studies of Prevymis for primary prophylaxis of cytomegalovirus infection and disease in patients undergoing allogeneic hematopoietic cell transplantation (alloHCT) who were CMV-seropositive. In the analysis of 48 real-world observational studies, compared to controls (mostly preemptive therapy), primary prophylaxis with Prevymis was associated at 100 days of follow-up after alloHCT with 87 percent lower odds of CMV reactivation; 91 percent lower odds for clinically significant CMV infection; 69 percent lower odds of CMV disease; 94 percent lower odds of CMV-related hospitalization; and 48 percent lower odds of Grade 2 or greater graft versus host disease. Consistent results were observed at 200 days of follow-up with respect to CMV reactivation, clinically significant CMV infection, and CMV disease.

In June, FDA approved an expanded indication for Vaxneuvance to include children 6 weeks through 17 years of age. Vaxneuvance is now indicated for active immunization for the prevention of invasive disease caused by Streptococcus pneumoniae serotypes 1, 3, 4, 5, 6A, 6B, 7F, 9V, 14, 18C, 19A, 19F, 22F, 23F and 33F in individuals 6 weeks of age and older.

FDA’s approval was based on data from seven randomized, double-blind clinical studies assessing safety, tolerability and immunogenicity of Vaxneuvance in infants, children, and adolescents. Clinical data from the pivotal study showed that immune responses elicited by Vaxneuvance following a four-dose pediatric series were non-inferior to the currently available 13-valent pneumococcal conjugate vaccine (PCV13) for the 13 shared serotypes based on serotype-specific immunoglobulin G (IgG) geometric mean concentrations (GMCs).

In a secondary analysis, immune responses for Vaxneuvance following a four-dose pediatric series were superior to PCV13 for shared serotype 3 and the two serotypes unique to Vaxneuvance, 22F and 33F. Randomized controlled trials assessing the clinical efficacy of Vaxneuvance compared to PCV13 have not been conducted. Data from the clinical program also support the use of Vaxneuvance concomitantly with other commonly administered routine pediatric vaccines, and in a variety of clinical settings, such as interchangeable use following initiation of an infant vaccination schedule with PCV13 or in a catch-up setting for older children who are either pneumococcal vaccine-naïve or who previously received an incomplete series of another PCV. Additionally, data support the use of Vaxneuvance in special populations, such as in preterm infants and children living with HIV infection or sickle cell disease.

In August, the FDA granted Fast Track designation for Merck’s investigational anticoagulant therapy MK-2060 for the reduction in risk of major thrombotic cardiovascular events in patients with end-stage renal disease. MK-2060 is an investigational monoclonal antibody designed to inhibit Factor XI and its ability to activate downstream proteins involved in the blood coagulation cascade. MK-2060 is being evaluated in a Phase II study for the treatment of patients with ESRD receiving hemodialysis.

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EY Eyes Comeback for Biopharma M&A

EY noted that the total value of biopharma M&A in 2022 was $88 billion, down 15% from $104 billion in 2021. The $88 billion accounted for most of the…

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A recent trickle of mergers and acquisitions (M&A) announcements in the billion-dollar-and-up range suggests that biopharma may be ready to resume dealmaking this year—although the value and number of deals isn’t expected to return to the highs seen just before the pandemic.

2022 ended with a handful of 10- and 11-figure M&A deals, led by Amgen’s $27.8 billion buyout of Horizon Therapeutics, announced December 13. The dealmaking continued into January with three buyouts announced on the first day of the recent J.P. Morgan Healthcare Conference: AstraZeneca agreed to acquire CinCor Pharma for up to $1.8 billion, while Chiesi Farmaceutici agreed to shell out up to $1.48 billion cash for Amryt, and Ipsen Group said it will purchase Albireo Pharma for $952 million-plus.

Biopharmas generated about $88 billion in M&A deals in 2022, down 15% from $104 billion in 2021. The $88 billion accounted for most of the $135 billion in 124 deals in the life sciences. The number of biopharma deals fell 17%, to 75 deals from 90. The other 49 deals totaling $47 million consisted of transactions in “medtech,” which includes diagnostics developers and companies specializing in “virtual health” such as telemedicine. [EY]
EY—the professional services firm originally known as Ernst & Young—recently noted that the total value of biopharma M&A in 2022 was $88 billion, down 15% from $104 billion in 2021 [See Chart]. The $88 billion accounted for most of the $135 billion in 124 deals in the life sciences. That $135 billion figure is less than half the record-high $313 billion recorded in 2019, including $261 billion in 70 biopharma deals.

The number of biopharma deals fell 17% to 75 deals from 90. EY’s numbers include only deals greater than $100 million. The other 49 deals totaling $47 million consisted of transactions in “medtech,” which includes diagnostics developers and companies specializing in “virtual health” such as telemedicine.

We expect this to be a more active year as the sentiment starts to normalize a little bit,” Subin Baral, EY Global Life Sciences Deals Leader, told GEN Edge.

Baral is not alone in foreseeing a comeback for biopharma M&A.

John Newman, PhD, an analyst with Canaccord Genuity, predicted last week in a research note that biopharma companies will pursue a growing number of smaller cash deals in the range of $1 billion to $10 billion this year. He said rising interest rates are discouraging companies from taking on larger blockbuster deals that require buyers to take on larger sums of debt.

“We look for narrowing credit spreads and lower interest rates to encourage larger M&A ($50 billion and more) deals. We do not anticipate many $50B+ deals that could move the XBI +5%,” Newman said. (XBI is the SPDR S&P Biotech Electronic Transfer Fund, one of several large ETFs whose fluctuations reflect investor enthusiasm for biopharma stock.)

Newman added: “We continue to expect a biotech swell in 2023 that may become an M&A wave if credit conditions improve.”

Foreseeing larger deals than Newman and Canaccord Genuity is PwC, which in a commentary this month predicted: “Biotech deals in the $5–15 billion range will be prevalent and will require a different set of strategies and market-leading capabilities across the M&A cycle.”

Those capabilities include leadership within a specific therapeutic category, for which companies will have to buy and sell assets: “Prepared management teams that divest businesses that are subscale while doubling down on areas where leadership position and the right to win is tangible, may be positioned to deliver superior returns,” Glenn Hunzinger, PwC’s U.S. Pharma & Life Science Leader, and colleagues asserted.

The Right deals

Rising interest and narrowing credit partially explain the drop-off in deals during 2022, EY’s Baral said. Another reason was sellers adjusting to the drop in deal valuations that resulted from the decline of the markets which started late in 2021.

Subin Baral, EY Global Life Sciences Deals Leader

“It took a little bit longer to realize the reality of the market conditions on the seller side. But on the buyer side, the deals that they were looking at were not just simply a valuation issue. They were looking at the quality of the assets. And you can see that the quality deals—the right deals, as we call them—are still getting done,” Baral said.

The right deals, according to Baral, are those in which buyers have found takeover targets with a strong, credible management team, solid clinical data, and a clear therapeutic focus.

“Rare disease and oncology assets are still dominating the deal making, particularly oncology because your addressable market continues to grow,” Baral said. “Unfortunately, what that means is the patient population is growing too, so there’s this increased unmet need for that portfolio of assets.”

Several of 2022’s largest M&A deals fit into that “right” category, Baral said—including Amgen-Horizon, Pfizer’s $11.6-billion purchase of Biohaven Pharmaceuticals and the $6.7-billion purchase of Arena Pharmaceuticals (completed in March 2022); and Bristol-Myers Squibb’s $4.1-billion buyout of Turning Point Therapeutics.

“Quality companies are still getting funded one way or the other. So, while the valuation dropped, people were all expecting a flurry of deals because they are still companies with a shorter runway of cash that will be running to do deals. But that really didn’t happen from a buyer perspective,” Baral said. “The market moved a little bit from what was a seller’s market for a long time, to what we would like to think of as the pendulum swinging towards a buyers’ market.”

Most biopharma M&A deals, he said, will be “bolt-on” acquisitions in which a buyer aims to fill a gap in its clinical pipeline or portfolio of marketed drugs through purchases that account for less than 25% of a buyer’s market capitalization.

Baral noted that a growing number of biopharma buyers are acquiring companies with which they have partnered for several years on drug discovery and/or development collaborations. Pfizer acquired BioHaven six months after agreeing to pay the company up to $1.24 billion to commercialize rimegepant outside the U.S., where the migraine drug is marketed as Nurtec® ODT.

“There were already some kind of relationships there before these deals actually happened. But that also gives an indication that there are some insights to these targets ahead of time for these companies to feel increasingly comfortable, and pay the valuation that they’re paying for them,” Baral said.

$1.4 Trillion available

Baral sees several reasons for increased M&A activity in 2023. First, the 25 biopharma giants analyzed by EY had $1.427 trillion available as of November 30, 2022, for M&A in “firepower”—which EY defines as a company’s capacity to carry out M&A deals based on the strength of its balance sheet, specifically the amount of capital available for M&A deals from sources that include cash and equivalents, existing debt, and market cap.

That firepower is up 11% from 2021, and surpasses the previous record of $1.22 trillion in 2014, the first year that EY measured the available M&A capital of large biopharmas.

Unlike recent years, Baral said, biopharma giants are more likely to deploy that capital on M&A this year to close the “growth gap” expected to occur over the next five years as numerous blockbuster drugs lose patent exclusivity and face new competition from lower-cost generic drugs and biosimilars.

“There is not enough R&D in their pipeline to replenish a lot of their revenue. And this growth gap is coming between 2024 and 2026. So, they don’t have a long runway to watch and stay on the sidelines,” Baral said.

This explains buyers’ interest in replenishing pipelines with new and innovative treatments from smaller biopharmas, he continued. Many smaller biopharmas are open to being acquired because declining valuations and limited cash runways have increased investor pressure on them to exit via M&A. The decline of the capital markets has touched off dramatic slowdowns in two avenues through which biopharmas have gone public in recent years—initial public offerings (IPOs) and special purpose acquisition companies (SPACs).

EY recorded just 17 IPOs being priced in the U.S. and Europe, down 89% from 158 a year earlier. The largest IPO of 2022 was Prime Medicine’s initial offering, which raised $180.3 million in net proceeds for the developer of a “search and replace” gene editing platform.

Another 12 biopharmas agreed to SPAC mergers with blank-check companies, according to EY, with the largest announced transaction (yet to close at deadline) being the planned $899 million merger of cancer drug developer Apollomics with Maxpro Capital Acquisition.

“For the smaller players, the target biotech companies, their alternate source of access to capital pathways such as IPOs and SPACs is shutting down on them. So how would the biotech companies continue to fund themselves? Those with quality assets are still getting funded through venture capital or other forms of capital,” Baral said. “But in general, there is not a lot of appetite for the biotech that is taking that risk.

Figures from EY show a 37% year-to-year decline in the total value of U.S. and European VC deals, to $16.88 billion in 2022 from $26.62 billion in 2021. Late-stage financing rounds accounted for just 31% of last year’s VC deals, down from 34% in 2021 and 58% in 2012. The number of VC deals in the U.S. and Europe fell 18%, to 761 last year from 930 in 2021.

The decline in VC financing helps explain why many smaller biopharmas are operating with cash “runways” of less than 12 months. “Depending on the robustness of their data, their therapeutic area, and their management, there will be a natural attrition. Some of these companies will just have to wind down,” Baral added.

M&A headwinds

Baral also acknowledged some headwinds that are likely to dampen the pace of M&A activity. In addition to rising interest rates and inflation increasing the cost of capital, valuations remain high for the most sought-after drugs, platforms, and other assets—a result of growing and continuing innovation.

Another headwind is growing regulatory scrutiny of the largest deals. Illumina’s $8 billion purchase of cancer blood test developer Grail has faced more than two years of challenges from the U.S. Federal Trade Commission and especially the European Commission—while Congress acted last year to begin curbing the price of prescription drugs and insulin through the “Inflation Reduction Act.”

Those headwinds may prompt many companies to place greater strategic priority on collaborations and partnerships instead of M&A, Baral predicted, since they offer buyers early access to newer technologies before deciding whether to invest more capital through a merger or acquisition.

“Early-stage collaboration, early minority-stake investment becomes increasingly important, and it has been a cornerstone for early access to these technologies for the industry for a long, long time, and that is not changing any time soon,” Baral said. “On the other hand, even on the therapeutic area side, early-stage development is still expensive to do in-house for the large biopharma companies because of their cost structure.

“So, it is efficient cost-wise and speed-wise to buy these assets when they reach a certain point, which is probably at Phase II onward, and then you can pull the trigger on acquisitions if needed,” he added.

The post EY Eyes Comeback for Biopharma M&A appeared first on GEN - Genetic Engineering and Biotechnology News.

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Pfizer’s Albert Bourla spells out ‘transition year’ for Covid products, with sales expected to reach a low point

On the heels of a record sales year, Pfizer is bracing for impact as it expects Covid-19 revenue to bottom out in 2023.
That’s due to lower compliance…

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On the heels of a record sales year, Pfizer is bracing for impact as it expects Covid-19 revenue to bottom out in 2023.

That’s due to lower compliance with vaccine recommendations, fewer primary vaccines being administered, and a “significant” government supply that’s expected to last throughout early this year, execs said Tuesday on the company’s Q4 earnings call.

CEO Albert Bourla anticipates $13.5 billion in Comirnaty sales this year, down 64% from 2022, and just $8 billion in Paxlovid revenue, down 58% from 2022.

“We expect 2023 to be a transition year in the US,” he said on the call, adding that the company sold more vaccine and treatment doses this year than were actually used. “This resulted in a government inventory build that we expect to be absorbed sometime in 2023 — probably the second half of the year. Around that time, we expect to start selling Comirnaty through commercial channels at commercial prices.”

Just 15.5% of eligible Americans have received bivalent booster doses, compared to 69.2% who completed their primary series, according to the CDC’s latest data. Last week, the FDA’s vaccines advisory committee voted unanimously in favor of “harmonizing” Covid vaccine compositions, meaning all new vaccine recipients would receive a bivalent shot, regardless of whether they’ve received the primary series.

Even so, only 31% of people in the US received a Covid vaccine this year, and Pfizer expects that number to dip to about 24% in 2023.

David Denton

Bourla’s expecting a similar slump in Paxlovid sales, due to existing unused government supply. According to data from ASPR updated last week, states have about 4 million unused Paxlovid courses.

The antiviral significantly underperformed this year, missing Bourla’s prior full-year projections by just over $3 billion. Comirnaty seemed to pick up the slack, however, raking in roughly $37.8 billion in global sales, or about $3.8 billion more than Bourla predicted at the end of the third quarter.

“While patient demand for our Covid products is expected to remain strong throughout 2023, much of that demand is expected to be fulfilled by products that were delivered to governments in 2022 and recorded as revenues last year,” CFO David Denton said on the call.

Angela Hwang

Commercial pricing for both Comirnaty and Paxlovid will likely kick in around the second half of this year, according to Bourla. While the pharma giant previously said it expects to charge between $110 and $130 for the BioNTech-partnered shot (almost quadrupling the price), chief commercial officer Angela Hwang said the team is still “preparing what those pricing scenarios could look like” for Paxlovid and will “share more at the right time.”

The Pfizer team is expecting Covid sales to pick back up in the next couple years — and if all goes according to plan, a successful combination shot for flu and Covid-19 would “bring the percentage of Americans receiving the Covid-19 vaccine closer to the portion of people getting flu shots, which is currently about 50%,” Bourla said. The company launched a Phase I study for an mRNA-based combo vaccine back in November.

Lower projected Covid sales led Bourla to set his full-year sales expectations in 2023 at $67 billion to $71 billion, down roughly 30% from 2022, which let down some analysts.

“PFE guidance for 2023 provided with 4Q22 results was disappointing despite the company talking down financial prospects in recent weeks,” SVB Securities analysts wrote in a note to investors on Tuesday.

However, when it comes to R&D investment, Bourla’s keeping his foot on the gas. As the CEO said back in November, “It’s all about what’s next.”

That’s why he’s earmarking around $12.4 billion to $13.4 billion for R&D this year, up nearly 9% from last year. It’s all part of his effort to make up for an expected $17 billion loss due to patent expiries between 2025 and 2030.

Last quarter, he spelled out ambitious plans to bring 19 new products or indications to market over the next year and a half. The chief executive highlighted a few of those programs on Tuesday, including potential combo shots for flu, Covid-19 and RSV, an oral GLP-1 candidate for diabetes and obesity, and potential vaccines for Lyme disease and shingles.

Other programs, however, didn’t make the cut. Pfizer also disclosed on Tuesday that it cut eight programs, including recifercept, an achondroplasia drug that was the centerpiece of Pfizer’s Therachon buyout in 2019, and two Paxlovid indications that failed their respective Phase III trials.

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IMF Upgrades Global Growth Forecast As Inflation Cools

IMF Upgrades Global Growth Forecast As Inflation Cools

The International Monetary Fund published its latest World Economic Outlook on Monday,…

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IMF Upgrades Global Growth Forecast As Inflation Cools

The International Monetary Fund published its latest World Economic Outlook on Monday, painting a slightly less gloomy picture than three and a half months ago, as inflation appears to have peaked in 2022, consumer spending remains robust and the energy crisis following Russia’s invasion of Ukraine has been less severe than initially feared.

But, as Statista's Felix Richter notes, that’s not to say the outlook is rosy, as the global economy still faces major headwinds.

However, the IMF predicts the slowdown to be less pronounced than previously anticipated.

Global growth is now expected to fall from 3.4 percent in 2022 to 2.9 percent this year, before rebounding to 3.1 percent in 2024.

The 2023 growth projection is up from an October estimate of 2.7 percent, as the IMF sees far fewer countries facing recession this year and does no longer anticipates a global downturn.

Infographic: IMF Upgrades Global Growth Forecast as Inflation Cools | Statista

You will find more infographics at Statista

One of the reasons behind the cautiously optimistic outlook is the latest downward trend in inflation, which suggests that inflation may have peaked in 2022.

The IMF predicts global inflation to cool to 6.6 percent in 2023 and 4.3 percent in 2024, which is still above pre-pandemic levels of about 3.5 percent, but significantly lower than the 8.8 percent observed in 2022.

“Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” Pierre-Olivier Gourinchas, the IMF’s chief economist, wrote in a blog post released along with the report.

“Inflation, too, showed improvement, with overall measures now decreasing in most countries—even if core inflation, which excludes more volatile energy and food prices, has yet to peak in many countries.”

The risks to the latest outlook remain tilted to the downside, the IMF notes, as the war in Ukraine could further escalate, inflation continues to require tight monetary policies and China’s recovery from Covid-19 disruptions remains fragile. On the plus side, strong labor markets and solid wage growth could bolster consumer demand, while easing supply chain disruptions could help cool inflation and limit the need for more monetary tightening.

In conclusion, Gourinchas calls for multilateral cooperation to counter “the forces of geoeconomic fragmentation”.

“This time around, the global economic outlook hasn’t worsened,” he writes. “That’s good news, but not enough. The road back to a full recovery, with sustainable growth, stable prices, and progress for all, is only starting.”

However, just because the 'trend' has shifted doesn't mean it's mission accomplished...

That looks an awful lot like Central Bankers' nemesis remains - global stagflation curb stomps the dovish hopes.

Tyler Durden Tue, 01/31/2023 - 14:45

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