Merck sees Keytruda gains, offsetting generic hits to sales
- Merck on Tuesday upped its sales and earnings per share forecasts for 2017, shaking off hits to pharmaceutical revenues from generic competition to several key brands.
- Faster sales of Merck's flagship immunotherapy Keytruda (pembrolizumab) and its hepatitis C drug Zepatier (elbasvir/grazoprevir), along with a strong performance from vaccines, helped the drugmaker beat expectations for the first quarter.
- Attention, unsurprisingly, centered on Keytruda, which is widely seen as having an inside track to securing a dominant market share in first-line lung cancer. Sales, at $584 million for the quarter, grew 134% from the same period last year, but remained well below those of Bristol-Myers Squibb's rival Opdivo (nivolumab).
Merck attributed the growth in Keytruda sales to uptake in first-line lung cancer (restricted to only those patients with high levels of PD-L1 expression), along with rapid expansion into head and neck cancers.
Roughly 40% of Keytruda sales are in non-small cell lung cancer (NSCLC), with 30% in melanoma, 15% in head and neck cancers and the rest from other uses, company executives said on an earnings call with analysts Tuesday.
One factor driving demand is increased testing for PD-L1 expression, said Adam Schechter, head of Global Human Health at Merck, which likely boosted the identification of patients eligible to take Keytruda as their first therapy.
In the more competitive second-line NSCLC market, Merck has been able to maintain a stable market share of around 15%.
Although Keytruda is the only checkpoint inhibitor approved for frontline treatment of some non-small cell lung cancers, competition is fierce to broaden the treatable patient population to low PD-L1 expressors.
The Food and Drug Administration is currently reviewing Merck's combination treatment pairing Keytruda with chemotherapy (pemetrexed) in all NSCLC patients regardless of PD-L1 expression. A decision is expected by May 10 and, if positive, could help cement Merck's hold on the first-line market.
Roche, Bristol-Myers and AstraZeneca all have trials ongoing targeting that market, however, and the immuno-oncology field could still see yet another reversal of fortunes.
Outside of oncology, Merck got a boost from its hepatitis C med Zepatier, which notched sales of $378 million in the first quarter — handily beating expectations. Company execs view the hep C market as a large commercial opportunity, but acknowledged that treating new patients has grown more difficult as more and more are essentially cured of the disease.
Strong performances from Keytruda, Zepatier and Merck's vaccines franchise largely offset loss of market exclusivity in the U.S. for the cholesterol drug Zetia (ezetimibe) and Merck's IV antibiotic Cubicin (daptomycin). In Europe, biosimilar competition had also cut into sales of Remicade (infliximab).
Overall sales rose 1% to $9.43 billion for the first three months of the year. Merck now expects between $39.1 billion and $40.3 billion in 2017 revenues, due to the impact of foreign exchange as well as stronger sales.
- Merck Earnings release
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