Drug Development

Merck KGaA: This time we’ve got our R&D act together (seriously)

Merck KGaA has one of the worst R&D track records of any biopharma company of its size. Its life sciences group has gone well over a decade without any major new drug approvals. It’s experienced a series of painful and often predictable setbacks in the clinic. And every time it’s promised rapid development progress in recent years, it’s had to back off the pledge.

But this time, the German company insists, they’ve got it down.

In a strategic review out this morning, Merck KGaA is looking to the future. And execs insist that it is bright. Starting next year, the company promises investors that it will begin a string of new drug or indication approvals. By 2022, they say, they’ll be able to count $2.2 billion in added revenue from new drugs.

And it will continue to swear off any major acquisitions of more than $550 million, unless they pay for something big with a divestment.

Merck KGaA’s late-stage pipeline rests on avelumab, a checkpoint inhibitor partnered with Pfizer for a record-setting $850 million upfront in late 2014. And then there’s cladribine, the MS pill that was initially quashed by the FDA and the EMA five years ago after regulators expressed their unhappiness with an inadequate late-stage program as well as worrying safety signals. Now it’s back, with updated data, after old rivals like Biogen have established their markets and look to stave off fresh competition from Roche.

The setback with cladribine, following Merck’s acquisition of the storied Swiss company Serono, triggered one of several reorganizations in the biotech arm of the company. More recently the company has been adding to its organization in Massachusetts.

Counting money from drug launches ahead of approval has often proved a haunting experience. But much of the press out today on the company’s strategic planning comes without any consideration of its past. So long as the focus remains fixed on the future, Merck KGaA continues to look good.

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Sr. Manager, Regulatory Affairs, CMC
CytomX Therapeutics San Francisco, CA
Marketing Associate - Demand Generation
Catalytic Data Science Charleston, SC
Associate Principal, Life Sciences Partnerships
Flatiron Health New York City or San Francisco

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