Over the last few years, Merck’s big R&D group has been concentrating heavily on its PD-1 superstar Keytruda, for obvious reasons. After jumping in as the number two player behind Bristol-Myers, the pharma giant wanted to take the lead — and it did.
Major new deals were put on the back burner, until recently.
But now the company is changing its tune, and there could be significant implications for the industry. Merck CEO Ken Frazier led his Q3 report on the numbers with what for him is an unusually bold comment:
“Our performance in the third quarter demonstrates the strength of our underlying business, with growth from key product launches, good global demand for vaccines, as well as strength from our Animal Health business. We will continue augmenting our pipeline through value-creating business development like our oncology collaboration with AstraZeneca to address unmet medical need and drive future growth.”
That collaboration he referred to was a $2.35 billion upfront pact to partner with AstraZeneca on Lynparza and its experimental MEK inhibitor selumetinib. Tied up with a $6.15 billion bow, Merck struck one of the biggest deals in the industry in the same quarter it bought out the small German biotech Rigontech for $150 million down and $453 million in milestones — one in an irregular series of small deals used to augment the Keytruda franchise.
For a player like Merck to get back to the deal table with billions in mind for new pacts would likely spell a major difference for the industry. Of the big players, Sanofi remains unsatisfied and in need of significant new deals. And the string of new CEOs like Emma Walmsley at GSK and Dave Ricks at Eli Lilly are also getting more aggressive in competing for deals.
Frazier has now planted his standard in biopharma dirt, with the money and inclination to make another splash.
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