- Merck & Co. shares fell nearly 5% in value Monday morning, building on losses from Friday over worries the pharma company could see its edge in first-line lung cancer erode.
- Late Friday afternoon, Merck announced in a brief statement that it would withdraw an application for European approval of Keytruda in combination with chemotherapy as a first-line treatment of non-small cell lung cancer (NSCLC).
- Keytruda is currently approved for that indication in the U.S., but a confirmatory study that could lock down the immunotherapy's advantage over rivals will now read out later than expected. Coupled with the withdrawal, Merck's hold on the first-line market looks a touch shakier, even as sales of the drug have grown strongly.
Little other details were offered up on Friday about Merck's decision to pull its marketing application in the E.U. The update from the company did not specify a reason, but reports have suggested that the European Medicines Agency may have been reluctant to back approval of the combination. Formal notification of the withdrawal from the EMA is expected on November 10.
Reuters cited a Merck spokesperson as saying the company hadn't made any decisions about when it might resubmit to European authorities. KEYNOTE-189, the company's Phase 3 study to confirm its early findings of benefit for the Keytruda (pembrolizumab) plus chemo combo, is now expected to read out in February 2019.
The combo's currently accelerated approval in the U.S., and the now-withdrawn application to the EMA, were both based on a cohort of a smaller study known as KEYNOTE-021.
"We were not surprised at the withdrawal of the application in the EU given that KN-21G's approval in the U.S. was itself far from certain, due to the small dataset supporting the application," wrote Cowen analyst Steve Scala in a Oct. 30 note. "The EU prefers larger Phase  trials, particularly when the target population is large, such as in this case."
Still, with lung cancer studies from Bristol-Myers Squibb & Company and Roche nearing read outs, the withdrawal does raise some concern about whether rivals could make inroads on Keytruda's most important market.
In its statement announcing the withdrawal, Merck reiterated its confidence in the KEYNOTE-021 data, which showed improvements in both overall response rate and progression-free survival for patients receiving the combo versus chemotherapy alone.
Jefferies equity analysts Jeffrey Holford expects Merck would resubmit in 2019 using data from its KEYNOTE-189 study, if successful. The delay to that study was due to Merck's decision to elevate overall survival to a co-primary endpoint, requiring a longer period to evaluate data from the trial.
Third quarter results, published Friday, showed Keytruda sales during the period topped $1 billion, nearly catching the market set by Bristol-Myers' Opdivo (nivolumab). More than 50% of Keytruda sales were in lung cancer, where the drug is the only checkpoint inhibitor approved in the first-line setting as both a monotherapy and a combination.
Those approvals has given Keytruda an edge over its rivals in one of the most lucrative cancer markets. While the company's accelerated approval in the U.S. does not look at risk, study delays and the withdrawal could open the door to Roche or Bristol-Myers.