Merck Undeterred By Upcoming Singulair Loss; Focuses On Phase III
This article was originally published in The Pink Sheet Daily
Executive Summary
Merck reports second quarter earnings, looking past the patent expiration of Singulair to the drugs it icurrently is developing to replace the revenues it is expected to lose.
With its blockbuster asthma drug Singulair (montelukast) set to lose patent protection as soon as next week, Merck & Co. Inc. spent its second quarter conference call on July 27 emphasizing its late-stage pipeline, which includes six drugs that will face approval before the end of 2013.
Singulair made up $1.4 billion of Merck’s $12.3 billion in total second quarter revenues – the largest contribution from any single drug. “When Singulair loses exclusivity in the United States next week, we expect multiple generic entrants on day one. This means that erosion will be rapid and it will be significant. In addition, Singulair will lose exclusivity in major European markets in February of 2013,” said Merck’s President of Global Human Health Adam Schecter.
The diabetes drug franchise of Januvia/Janumet also contributed about $1.4 billion to sales during the quarter. The big pharma’s current earnings, though, took a backseat to its expectations for several drugs it has in Phase III.
“Last year, we reiterated our commitment to R&D, translating cutting edge science and the medically important products is at the heart of what we believe Merck does best,” said Merck CEO Kenneth Frazier during the call. “We are pleased to see significant progress in the pipeline. We remain on track with six major filings over the next 18 months. Among them is odanacatib, our investigational cat-K inhibitor for osteoporosis. Odanacatib represents a potential whole new way to treat osteoporosis.”
Replacing Singulair
Odanacatib, a cathepsin-K inhibitor, represents Merck’s best hope to dominate primary care even as its competitors are looking toward developing drugs for rare diseases to make up for revenue lost to generic competition (Also see "Merck Eyes Primary Care Opportunities Despite Challenges" - Pink Sheet, 29 Feb, 2012.). A phase III trial of the potential blockbuster for osteoporosis recently was ended early when a Data Monitoring Committee recommended stopping the trial due to overwhelming evidence of efficacy (Also see "Odanacatib Phase III Success Suggests Merck’s Primary Care Gamble Is Paying Off" - Pink Sheet, 12 Jul, 2012.).
Frazier said Merck is still closing out the trial after the mid-July recommendation and that it anticipates filing for approval in the U.S. and EU in the first half of 2013 and in third-quarter 2013 in Japan.
Merck is still following up on “safety issues that remain in certain selected areas” that were highlighted by the DMC. Odanacatib inhibits the enzyme responsible for breaking down existing bone tissue. But while the drug reduces resorption, it does not prevent bone formation. However, other drugs in the class have not made it through development – notably Novartis AG’s balicatib, which was dropped due to skin thickening and other side effects. Merck has noted that its candidate is more selective for cat-K.
Beyond odanacatib, Merck intends to file the insomnia treatment suvorexant, which blocks orexins that keep people awake. Studies have shown that the drug was effective through 12 months. Merck is on track to file the drug with FDA this year (Also see "Merck On Track To File Novel Sleep Aid Suvorexant In 2012" - Pink Sheet, 6 Feb, 2012.).
In addition to odanacatib and suvorexant, the company also will seek approval for Bridion (sugammadex), a first in class neuromuscular reversal agent; V503, a follow-on vaccine to its blockbuster Gardasil that expands protection against certain HPV associated cancers; Tredaptive (nicotinic acid/laropiprant), a cholesterol medicine that improves multiple lipid parameters; and vintafolide, a treatment for a variety of tumor types expressing folate receptors, including ovarian and lung cancers, which Merck licensed from Endocyte Inc. in April (Also see "Merck Gains Phase III Drug/Companion Diagnostic In Deal With Endocyte" - Pink Sheet, 16 Apr, 2012.).
Along with the six filings, Merck will begin a Phase III program of its dipeptidyl peptidase-4 (DPP-4) inhibitor for diabetes and a Phase II program for a beta-secretase (BACE) inhibitor for Alzheimer’s disease this year. Merck’s current DPP-4 offerings, Januvia (sitagliptin) and Janumet (sitagliptin/metformin HCl), lead that market with about 75% share, but other companies recently have released offerings that could cut into sales.
When asked if Merck had the capacity to launch three primary care products – odanacatib, Tredaptive, suvorexant – Schecter responded: “We have a significant presence today in every market around the world including now in markets like China and India and Brazil for primary care. I believe that the sales force that we have in the United States and in Europe is appropriately sized to launch important new products into the primary care setting.”