'We need to do more': Mer­ck CEO Rob Davis high­lights M&A, deals strat­e­gy ahead of '28 Keytru­da patent cliff

With megablock­buster Keytru­da’s patent cliff loom­ing in 2028, Mer­ck has made some bold M&A moves in an at­tempt to find its next big mon­ey­mak­er, in­clud­ing last year’s $11.5 bil­lion ac­qui­si­tion of Ac­celeron. Ac­cord­ing to CEO Robert Davis, there’s plen­ty more of that com­ing in 2022.

The chief ex­ec­u­tive high­light­ed the Ac­celeron deal — in which the phar­ma gi­ant snapped up the po­ten­tial block­buster pul­monary ar­te­r­i­al hy­per­ten­sion (PAH) drug so­tater­cept — and last year’s Pan­dion Ther­a­peu­tics ac­qui­si­tion as ex­am­ples of the com­pa­ny’s ap­proach go­ing in­to the new year.

“We will con­tin­ue to be ap­pro­pri­ate­ly ag­gres­sive in pur­su­ing com­pelling ex­ter­nal in­no­va­tion and we will sup­ple­ment our pipeline with an ap­proach that is sci­ence-led but port­fo­lio-in­formed,” Davis said. “While we have a strong track record of busi­ness de­vel­op­ment, we know we need to do more.”

He al­so em­pha­sized mol­nupi­ravir as a key dri­ver of sales, fore­cast­ing $5 bil­lion to $6 bil­lion in rev­enue this year. By the end of this week, the com­pa­ny will have de­liv­ered 3.1 mil­lion cours­es of the treat­ment to dis­tri­b­u­tion hubs, Davis said on the call.

“We do see the po­ten­tial for mol­nupi­ravir be­yond the cur­rent sit­u­a­tion with Covid-19 and the pan­dem­ic, giv­en the fact that it does have such good ac­tiv­i­ty more broad­ly,” Davis said on the call.

De­spite re­port­ing a 17% growth in full-year sales — $48.7 bil­lion, about $952 mil­lion of which was from mol­nupi­ravir alone — Mer­ck’s stock $MRK slipped just over 3% on Thurs­day, pric­ing in at $78.41 per share.

As al­ways, the phar­ma gi­ant will con­tin­ue its push to ex­pand Keytru­da’s la­bel to in­clude ear­li­er lines of ther­a­py and new com­bi­na­tions for can­cer pa­tients, in­clud­ing in the ad­ju­vant space where it was ap­proved last quar­ter in re­nal cell car­ci­no­ma.

“We’re look­ing at move­ment in­to the ear­li­er spaces dri­ving ap­prox­i­mate­ly 50% of the growth for the drug, for Keytru­da, through 2025,” Davis said. “And we think by 2025, it’ll be about 30% of our to­tal rev­enue com­ing from the ad­ju­vant in­di­ca­tions we have. So this is an area where we’re start­ing to put runs on the board, and I think we’re go­ing to show the breadth of what Keytru­da can do both in main­te­nance as well as in the metasta­t­ic space.”

Dean Li

The cash cow PD-1 im­munother­a­py raked in $17.2 bil­lion last year, up 20% from the year be­fore. Mer­ck hopes the drug will guide the com­pa­ny in be­com­ing the leader in on­col­o­gy by 2025, ac­cord­ing to Dean Li, ex­ec­u­tive VP and pres­i­dent of Mer­ck Re­search Lab­o­ra­to­ries. The chal­lenge, how­ev­er, will be main­tain­ing that sta­tus af­ter the patent cliff in 2028.

“We have an ex­pand­ing port­fo­lio of com­mer­cial and de­vel­op­men­tal on­col­o­gy as­sets be­yond Keytru­da, which of­fer mean­ing­ful growth op­por­tu­ni­ties be­yond 2028,” Davis promised on the call.

M&A ap­pears to be a large part of that plan, as all signs point to­ward a Big Phar­ma M&A hunt this year. Mer­ck’s Ac­celeron deal was the in­dus­try’s sec­ond-largest takeover last year, just be­hind CSL’s $11.7 bil­lion ac­qui­si­tion of Vi­for Phar­ma.

“We are see­ing in the biotech space, val­u­a­tions have pulled back quite a bit,” Davis said. “I think it’s too ear­ly to see whether or not this is a per­ma­nent re­bas­ing in the mar­ket or, or if it is just a tem­po­rary change in the mar­ket­place. We need to see how that plays out.”

He not­ed that with IPOs start­ing to slow, he’ll be in­ter­est­ed to see if cash in­vest­ments do as well.

“Whether or not that dri­ves to sell­ers be­ing will­ing to see the re­state­ment of val­ues that will al­low us to do deals at dif­fer­ent lev­els we’ll have to see,” Davis con­tin­ued. “But it doesn’t change the im­por­tance we see of do­ing busi­ness de­vel­op­ment for the com­pa­ny.”

The CEO point­ed to the com­pa­ny’s oth­er fran­chis­es be­yond on­col­o­gy, in­clud­ing its HPV vac­cine Gar­dasil, which saw a 44% sales growth last year and could dou­ble sales by 2030, ac­cord­ing to Davis. There’s al­so their next-gen, 15-va­lent pneu­mo­coc­cal vac­cine Vaxneu­vance, which got the OK back in Ju­ly — how­ev­er, Pfiz­er beat it to the punch with its own 20-strain shot. The FDA is ex­pect­ed to de­cide on a sup­ple­men­tal BLA for Vaxneu­vance in chil­dren 6 weeks through 17 years old by April 1.

Li al­so gave brief up­dates on is­la­travir and gefapix­ant, which were re­cent­ly hit with a par­tial hold and a CRL, re­spec­tive­ly.

Is­la­travir is one of the two cen­ter­pieces of Mer­ck and Gilead’s joint ef­fort to de­vel­op a long-act­ing HIV ther­a­py, along­side Gilead’s cap­sid in­hibitor lenaca­pavir. Back in De­cem­ber, FDA placed clin­i­cal holds on the INDs for oral and im­plant for­mu­la­tions of is­la­travir for HIV-1 pre-ex­po­sure pro­phy­lax­is (PrEP); the in­jectable for­mu­la­tion of is­la­travir for HIV-1 treat­ment and pro­phy­lax­is; and the oral do­ravirine/is­la­travir (DOR/ISL) HIV-1 once-dai­ly treat­ment. The holds were put in place af­ter sci­en­tists flagged a drop in im­mune cell counts in pa­tients re­ceiv­ing the treat­ment.

“We are work­ing to un­der­stand the da­ta and the prin­ci­ples of the find­ing,” Li said. “We be­lieve in the po­ten­tial of the nu­cle­o­side re­verse tran­scrip­tase and translo­ca­tion in­hibitor mech­a­nism for both the pre­ven­tion and treat­ment of HIV, and we in­tend to share up­dates in the fu­ture.”

Gefapix­ant, on the oth­er hand, was once tout­ed as a “pipeline in a prod­uct.” But while the drug dra­mat­i­cal­ly re­duced chron­ic cough in a Phase III tri­al, so did place­bo, leav­ing the re­search team with a mar­gin­al suc­cess on the p-val­ue side of the equa­tion. There were al­so some con­cern­ing side ef­fects in late-stage work, in­clud­ing a taste-al­ter­ing ef­fect called dys­geu­sia. The FDA hand­ed Mer­ck a CRL for the drug just last month.

How­ev­er, Li main­tained on the Q4 call that “there were no safe­ty con­cerns for gefapix­ant,” and that the FDA had re­quest­ed more in­for­ma­tion “re­lat­ed to the mea­sure­ment of ef­fi­ca­cy.”

Up­dat­ed: FDA re­mains silent on or­phan drug ex­clu­siv­i­ty af­ter last year's court loss

Since losing a controversial court case over orphan drug exclusivity last year, the FDA’s Office of Orphan Products Development has remained entirely silent on orphan exclusivity for any product approved since last November, leaving many sponsors in limbo on what to expect.

That silence means that for more than 70 orphan-designated indications for more than 60 products, OOPD has issued no public determination on the seven-year orphan exclusivity in the Orange Book, and no new listings of orphan exclusivity appear in OOPD’s searchable database, as highlighted recently by George O’Brien, a partner in Mayer Brown’s Washington, DC office.

Thomas Gad, Y-mAbs Therapeutics founder and interim CEO

FDA re­jects Y-mAbs’ neu­rob­las­toma drug af­ter tak­ing is­sue with clin­i­cal tri­al de­sign

Uncertainty about clinical trial evidence has led the FDA to hand down a complete response letter for Y-mAbs’ neuroblastoma drug, casting a cloud on the future of a candidate that had gone through a long development journey in a rare pediatric cancer.

Y-mAbs said it’s disappointed “but not surprised” given that the agency’s oncology drug advisory committee had voted 16-0 against its drug’s approval a few weeks ago.

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Illustration: Assistant Editor Kathy Wong for Endpoints News

As mon­ey pours in­to dig­i­tal ther­a­peu­tics, in­sur­ance cov­er­age crawls

Talk therapy didn’t help Lily with attention deficit hyperactivity disorder, or ADHD. But a video game did.

As the 10-year-old zooms through icy waters and targets flying creatures on the snow-capped planet Frigidus, she builds attention skills, thanks to Akili Interactive Labs’ video game EndeavorRx. She’s now less anxious and scattered, allowing her to stay on a low dose of ADHD medication, according to her mom Violet Vu.

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Eli Lil­ly’s Alzheimer’s drug clears more amy­loid ear­ly than Aduhelm in first-ever head-to-head. Will it mat­ter?

Ahead of the FDA’s decision on Eli Lilly’s Alzheimer’s drug donanemab in February, the Big Pharma is dropping a first cut of data from one of the more interesting trials — but less important in a regulatory sense — at an Alzheimer’s conference in San Francisco.

In the unblinded 148-person study, Eli Lilly pitted its drug against Aduhelm, Biogen’s drug that won FDA approval but lost Medicare coverage outside of clinical trials. Notably, the study didn’t look at clinical outcomes, but rather the clearance of amyloid, a protein whose buildup is associated with Alzheimer’s disease, in the brain.

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Tim Pearson, Carrick Therapeutics CEO

Pfiz­er backs $60M in­fu­sion in­to Car­rick, teams up on breast can­cer treat­ment

In a big week for Carrick Therapeutics, the company announced $60 million in funding for its lead breast cancer drug and development of a second program, as well as a collaboration with Pfizer for combo development.

The $35 million from Pfizer comes with an agreement under which Pfizer will support Carrick’s Phase II study of samuraciclib in combination with Pfizer’s Faslodex for advanced breast cancer. Along with the investment, Adam Schayowitz, vice president and development head of breast cancer, colorectal cancer and melanoma at Pfizer global product development, will join Carrick’s scientific advisory board.

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Philip Tagari switch­es Am­gen's dis­cov­ery lab for in­sitro's ma­chine learn­ing tools; CEO Joaquin Du­a­to to chair J&J's board

In February, Philip Tagari will take a few days of retirement and then immediately return to industry. He won’t be leading the therapeutics discovery unit for a large biopharma, though.

He’ll trade in his Amgen hat for chief scientist at a machine learning startup that has reeled in hundreds of millions in capital to lay the groundwork for a much-hyped new model of drug discovery that aims to speed up the time to new clinical assets.

Raul Rodriguez, Rigel Pharma CEO

Rigel Phar­ma scores FDA ap­proval for leukemia, kick­ing off show­down with Servi­er in IDH1

When Rigel Pharma bought olutasidenib from Forma Therapeutics, it acquired a drug that already secured a PDUFA date at the FDA — for February 2023. But regulators are ready to give their OK sooner than that.

The FDA has approved the IDH1 inhibitor as a treatment for adult patients with relapsed or refractory acute myeloid leukemia who have a susceptible IDH-1 (isocitrate dehydrogenase-1) mutation as detected by an FDA-greenlit test. Rigel will market it as Rezlidhia.

Paul Hudson, Sanofi CEO (Romuald Meigneux/Sipa via AP Images)

Sanofi and Am­gen are bring­ing cash to cov­er the ta­ble stakes for the Hori­zon M&A game

With the market cap on Horizon Therapeutics $HZNP pushed up to the $23 billion mark today, one of the Big Pharmas in the hunt for a major league buyout deal signaled it’s playing the M&A game with cash.

Paris-based Sanofi, where CEO Paul Hudson has been largely focused on some risky biotech acquisitions to win some respect for its future pipeline prospects, issued a statement early Friday — complying with Rule 2.12 of the Irish takeover rules — making clear that while the certainty or size of an offer can’t be determined, any offer “will be solely in cash.” And Amgen CEO Robert Bradway came right in behind him, filing a statement on the London Stock Exchange overnight that any offer they may make will “likely” be in cash as well.

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Matt Gline, Roivant Sciences CEO (Photo by John Sciulli/Getty Images for GLG)

Pfiz­er and Roivant team up again for an­oth­er 'Van­t', set­ting up an­ti-in­flam­ma­to­ry show­down with Prometheus

Pfizer and Roivant are teaming up to launch a new ‘Vant’ aimed at bringing a mid-stage anti-inflammatory drug to market, the pair announced Thursday.

There’s no name for the startup yet, nor are there any employees. Thus far, the new company and Roivant can be considered “one and the same,” Roivant CEO Matt Gline tells Endpoints News. But Pfizer is so enthusiastic about the target that it elected to keep 25% of equity in the drug rather than take upfront cash from Roivant, Gline said.

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