Tak­ing dou­ble Covid-19 hits, Mer­ck writes off $170M for scrapped drug, high­lights $600M in missed sales

Mer­ck ac­quired MK-7110, the Covid-19 drug orig­i­nal­ly de­vel­oped by On­coIm­mune, for $425 mil­lion in cash. The de­ci­sion to scrap it has cost at least $170 mil­lion on pa­per.

The write-off amount was among a few de­tails the phar­ma gi­ant di­vulged in its lat­est quar­ter­ly fil­ing, which of­fered a clos­er look at its ill-fat­ed pan­dem­ic R&D cam­paign.

Here’s what we’ve learned: The $50 mil­lion that Mer­ck had in­vest­ed in the new ven­ture that On­coIm­mune spun out with every­thing that’s not re­lat­ed to MK-7110 was good for a 20% stake, mark­ing a $17 mil­lion pre­mi­um for On­coIm­mune’s shares.

“Mer­ck al­so rec­og­nized oth­er net li­a­bil­i­ties of $22 mil­lion,” the fil­ing read. “The Com­pa­ny record­ed Re­search and de­vel­op­ment ex­pens­es of $462 mil­lion in 2020 re­lat­ed to this trans­ac­tion.”

While Mer­ck had been im­pressed with the Phase III da­ta On­coIm­mune post­ed last Sep­tem­ber — sug­gest­ing that its drug, then known as CD24Fc, could re­duce the risk of res­pi­ra­to­ry fail­ure or death in se­vere Covid-19 pa­tients by 50% — the FDA thought oth­er­wise. The reg­u­la­tors’ re­quest for ad­di­tion­al da­ta would push any po­ten­tial EUA to 2022 the ear­li­est, Mer­ck not­ed back in April, and even then they would be faced with “tech­ni­cal, clin­i­cal and reg­u­la­to­ry un­cer­tain­ties.” So in­stead of run­ning that new tri­al, they de­cid­ed to drop it.

That was af­ter Mer­ck al­ready dis­con­tin­ued its vac­cine pro­gram, pledg­ing in­stead to lend its man­u­fac­tur­ing mus­cle to oth­er Covid-19 vac­cine mak­ers in­clud­ing J&J. The on­ly re­main­ing pro­gram, Ridge­back and Emory-de­vel­oped an­tivi­ral mol­nupi­ravir, is be­ing test­ed in the out­pa­tient set­ting while in­ves­ti­ga­tors de­cid­ed not to pro­ceed with a Phase III in hos­pi­tal­ized pa­tients.

It’s all about con­cen­trat­ing Mer­ck’s re­sources on the most vi­able ther­a­peu­tics and vac­cines, the com­pa­ny em­pha­sized.

The pan­dem­ic, af­ter all, has tak­en a toll on Mer­ck’s bot­tom line — with the neg­a­tive im­pact on sales es­ti­mat­ed at $600 mil­lion in the first quar­ter alone. The dip in sales marked a sour note for out­go­ing CEO Ken Fra­zier’s fi­nal earn­ings call af­ter a 29-year ca­reer.

From the 10-Q:

Rough­ly two-thirds of Mer­ck’s Phar­ma­ceu­ti­cal seg­ment rev­enue is com­prised of physi­cian-ad­min­is­tered prod­ucts, which, de­spite strong un­der­ly­ing de­mand, have been af­fect­ed by so­cial dis­tanc­ing mea­sures and few­er well vis­its. Re­duced ac­cess to health care providers com­bined with the pri­or­i­ti­za­tion of COVID-19 vac­cines and pub­lic health guid­ance on co-ad­min­is­tra­tion with oth­er vac­cines has re­sult­ed in re­duced ad­min­is­tra­tion of many of the Com­pa­ny’s hu­man health prod­ucts, no­tably vac­cines in the Unit­ed States, which the Com­pa­ny an­tic­i­pates will con­tin­ue while pan­dem­ic-re­lat­ed ac­cess mea­sures re­main in place.

Albert Bourla (Photo by Steven Ferdman/Getty Images)

UP­DAT­ED: Pfiz­er fields a CRL for a $295M rare dis­ease play, giv­ing ri­val a big head start

Pfizer won’t be adding a new rare disease drug to the franchise club — for now, anyway.

The pharma giant put out word that their FDA application for the growth hormone therapy somatrogon got the regulatory heave-ho, though they didn’t even hint at a reason for the CRL. Following standard operating procedure, Pfizer said in a terse missive that they would be working with regulators on a followup.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 129,600+ biopharma pros reading Endpoints daily — and it's free.

Alexander Lefterov/Endpoints News

A new can­cer im­munother­a­py brings cau­tious hope for a field long await­ing the next big break­through

Bob Seibert sat silent across from his daughter at their favorite Spanish restaurant near his home in Charleston County, SC, their paella growing cold as he read through all the places in his body doctors found tumors.

He had texted his wife, a pediatric intensive care nurse, when he got the alert that his online chart was ready. Although he saw immediately it was bad, many of the terms — peritoneal, right iliac — were inscrutable. But she was five hours downstate, at a loud group dinner the night before another daughter’s cheer competition.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Graphic: Alexander Lefterov for Endpoints News

Small biotechs with big drug am­bi­tions threat­en to up­end the tra­di­tion­al drug launch play­book

Of the countless decisions Vlad Coric had to make as Biohaven’s CEO over the past seven years, there was one that felt particularly nerve-wracking: Instead of selling to a Big Pharma, the company decided it would commercialize its migraine drug itself.

“I remember some investors yelling and pounding on the table like, you can’t do this. What are you thinking? You’re going to get crushed by AbbVie,” he recalled.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 129,600+ biopharma pros reading Endpoints daily — and it's free.

Mar­ket­ingRx roundup: Pfiz­er de­buts Pre­vnar 20 TV ads; Lil­ly gets first FDA 2022 pro­mo slap down let­ter

Pfizer debuted its first TV ad for its Prevnar 20 next-generation pneumococcal pneumonia vaccine. In the 60-second spot, several people (actor portrayals) with their ages listed as 65 or older are shown walking into a clinic as they turn to say they’re getting vaccinated with Prevnar 20 because they’re at risk.

The update to Pfizer’s blockbuster Prevnar 13 vaccine was approved in June, and as its name suggests is a vaccine for 20 serotypes — the original 13 plus seven more that cause pneumococcal disease. Pfizer used to spend heavily on TV ads to promote Prevnar 13 in 2018 and 2019 but cut back its TV budgets in the past two fall and winter seasonal spending cycles. Prevnar had been Pfizer’s top-selling drug, notching sales of just under $6 billion in 2020, and was the world’s top-selling vaccine before the Covid-19 vaccines came to market last year.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 129,600+ biopharma pros reading Endpoints daily — and it's free.

Roy Baynes, Merck

FDA bats back Mer­ck’s ‘pipeline in a prod­uct,’ de­mands more ef­fi­ca­cy da­ta

Despite some heavy blowback from analysts, Merck execs maintained an upbeat attitude about the market potential of its chronic cough drug gefapixant. But the confidence may be fading somewhat today as Merck puts out news that the FDA is handing back its application with a CRL.

Dubbed by Merck’s development chief Roy Baynes as a “pipeline in a product” with a variety of potential uses, Merck had fielded positive late-stage data demonstrating the drug’s ability to combat chronic cough. The drug dramatically reduced chronic cough in Phase III, but so did placebo, leaving Merck’s research team with a marginal success on the p-value side of the equation.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 129,600+ biopharma pros reading Endpoints daily — and it's free.

Florida Gov. Ron DeSantis (AP Photo/Wilfredo Lee, File)

Opin­ion: Flori­da is so mAb crazy, Ron De­San­tis wants to use mAbs that don't work

Florida Gov. Ron DeSantis is trying so hard to politicize the FDA and demonize the federal government that he entered into an alternate universe on Monday evening in describing a recent FDA action to restrict the use of two monoclonal antibody, or mAb, treatments for Covid-19 that don’t work against Omicron.

Without further ado, let’s break down his statement from last night, line by line, adjective by adjective.

Steve Worland, eFFECTOR CEO

Sur­prise piv­ot rocks eF­FEC­TOR's I/O plans — al­though ex­ecs promise big­ger slice of the NSCLC mar­ket in the long run

When eFFECTOR Therapeutics went public last summer on the coattails of a reverse merger with Locust Walk’s SPAC, the potential of its lead drug, tomivosertib, as a combo agent with Merck’s flagship PD-1 Keytruda was hailed as the main draw.

But the biotech is now axing those plans and essentially starting over.

In a surprise move, San Diego-based eFFECTOR said it’s halting the development of tomivosertib in non-small cell lung cancer patients who have already progressed on Keytruda monotherapy after running into enrollment challenges in a Phase IIb trial.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 129,600+ biopharma pros reading Endpoints daily — and it's free.

Not cheap­er by the dozen: Bris­tol My­ers be­comes the 12th phar­ma com­pa­ny to re­strict 340B sales

Bristol Myers Squibb recently joined 11 of its peer pharma companies in limiting how many contract pharmacies can access certain drugs discounted by a federal program known as 340B.

Bristol Myers is just the latest in a series of high-profile pharma companies moving in their own direction as the Biden administration’s Health Resources and Services Administration struggles to rein in the drug discount program for the neediest Americans.

Joaquin Duato, J&J CEO (Photo by Charles Sykes/Invision/AP)

New J&J CEO Joaquin Du­a­to promis­es an ag­gres­sive M&A hunt in quest to grow phar­ma sales

Joaquin Duato stepped away from the sideline and directly into the spotlight on Tuesday, delivering his first quarterly review for J&J as its newly-tapped CEO after an 11-year run in senior posts. And he had some mixed financial news to deliver today while laying claim to a string of blockbuster drugs in the making and outlining an appetite for small and medium-sized M&A deals.

Duato also didn’t exactly shun large buyouts when asked about the future of the company’s medtech business — where they look to be in either the top or number 2 position in every segment they’re in — even though the bar for getting those deals done is so much higher.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 129,600+ biopharma pros reading Endpoints daily — and it's free.