Dive Brief:

• Sales of Merck & Co.'s cancer immunotherapy Keytruda crested $1 billion in the third quarter, but were not enough to offset declines across the company's pharmaceutical portfolio from loss of market exclusivity for several key products. 
• Overall revenues fell 2% year-over-year to $10.3 billion, driven by an $800 million decline in third quarter sales of those drugs no longer shielded from competition — such as the cholesterol meds Zetia and Vytorin.
• Even with that financial hit, Merck would have recorded a quarter of growth if not for the effects of a damaging cyberattack on the pharma in June. Disruption from the attack resulted in $135 million in lost sales and forced Merck to borrow supplies of its Gardasil vaccine from the U.S. government to cover shipments after a temporary production shutdown. 

Dive Insight:

Keytruda (pembrolizumab)  was the main bright spot for Merck as it weathered blows from the NotPetya cyberattack, new competition and pricing pressures in hepatitis C. 

While Bristol-Myers Squibb's Opdivo (nivolumab) remains the top-selling checkpoint inhibitor, Merck's immunotherapy has continued to make up ground, particularly as it builds a further advantage in lung cancer.

Keytruda now holds approvals as first-line treatment of metastatic non-small cell lung cancer (NSCLC) in patients with higher than 50% PD-L1 expression, as well as in all comers when combined with Eli Lilly & Co.'s chemotherapy Alimta (pemetrexed). 

Setbacks for Opdivo as well as AstraZeneca plc's Imfinzi (durvalumab) in the first-line NSCLC setting have given Merck time to build share. While rivals still loom, Merck now says one in three NSCLC patients in the U.S. are being started on Keytruda — making it the most prescribed drug for newly diagnosed metastatic lung cancer. 

And while lung cancer prescriptions make up 55% of Keytruda sales, Merck is also seeing gains in other indications. 

"We have seen strong momentum for the bladder cancer launch," said Adam Schechter, head of Global Human Health at Merck, on a Oct. 27 call with analysts. "Within just two months, in the second line or greater setting, Keytruda achieved I/O leadership in new [prescription] share despite being the fifth market entrant."

Bladder cancer sales made up 5% of total Keytruda sales in the third quarter, Merck said in response to an inquiry from BioPharma Dive. 

A study called Keynote-189, which is designed to confirm Keytruda's benefit when combined with Alimta, is widely seen as crucial to cementing Merck's edge. In its earnings update, Merck disclosed that it has amended the study to include overall survival as a co-primary endpoint — pushing the estimated completion date back to February 2019. 

Executives said the decision was made to revise the study in order to assign greater statistical power to the overall survival endpoint, which is seen as a better measure of the full benefit of immunotherapies like Keytruda. 

The changes should mitigate risk to Merck's accelerated approval in all-comer first-line NSCLC, although the delay might frustrate some given approaching study readouts from Bristol-Myers and Roche in the space. 

Merck needs to press its existing advantage, too, as the third quarter demonstrated the challenges facing the rest of its portfolio. While Zepatier (elbasvir/grazoprevir), its hepatitis C entrant, notched 185% year-over-year growth, Merck said it expects competitive pressure on the drug throughout the remainder of this year and into next year.