Merck May Have Too Many Eggs in Its Keytruda Basket


In 2017, Merck & Co.’s wonder drug, Keytruda (pembrolizumab), brought in $3.8 billion, or about 9 percent of the company’s total revenue. It has a price tag in the U.S. of $13,500 and is being investigated in more than 700 clinical trials in more than 30 cancer types. The Wall Street Journal notes that this is dominating more than half of Merck’s budget for clinical trials. Is it too much emphasis on a single drug?

Keytruda is an immuno-oncology checkpoint inhibitor that blocks the PD-1 pathway. It essentially prevents tumors from hiding from the body’s immune system. It has been approved to treat melanoma, non-small cell lung cancer (NSCLC), head and neck squamous cell cancer (HNSCC), classical Hodgkin lymphoma (cHL), advanced urothelial cancer, microsatellite instability-high (MSK-H) or mismatch repair deficient (dMMR) solid tumors, and gastric or gastroesophageal junction (GEJ) adenocarcinoma.

Keytruda’s biggest competitor is Bristol-Myers Squibb's Opdivo (nivolumab), but it’s a race that Keytruda is winning.

But industry watchers and investors have shown some concern that Merck is abandoning other potentially lucrative areas of research to focus on exploiting every last bit of Keytruda’s potential. Roger Perlmutter, executive vice president of Merck & Co., and president of Merck Research Laboratories, told The Wall Street Journal, “I said to everyone, ‘Whatever other projects you working on, you can stop now, because we’re going to be doing this, and we’re going to put a lot of muscle behind this.’”

However, Bernard Munos, a former Eli Lilly and Co., employee turned pharma R&D consultant, told WSJ, “Before Keytruda, Merck’s R&D strategy was to bring as many drugs to market as they could.”

Which is clearly not the case now. And it makes a lot of sense, in many ways. Analysts with Credit Suisse have projected 2022 sales of Keytruda to pass $10 billion, which would make up 22 percent of the company’s total revenue. And some of its other best-sellers, such as Remicade and Vytorin, are losing market share to generics.

“Unfortunately for Merck,” said Vamil Divan, an analyst with Credit Suisse, reported by WSJ, “the rest of the business is not that strong.”

Perlmutter agrees that there is risk, but also points out that it’s not as if Merck has abandoned all R&D. It has more than 40 other drugs currently in the clinic, in areas as diverse as infectious diseases and diabetes.

“This is a very easy business to make mistakes in, and you can always make investments that don’t yield major contributions to human health,” Perlmutter said in an interview with WSJ. “I do feel that we have a responsibility with Keytruda to ensure that we fully demonstrate what this drug can do.”

While Keytruda is being evaluated in more than clinical trials, the interest is very high in Bristol-Myers’ Opdivo, which is being evaluated in more than 600 trials, and AbbVie’s Humira, which is being tested in more than 500 trials.

Just yesterday, Merck announced data from the Phase III EORTC1325/KEYNOTE-054 clinical trial of Keytruda as adjuvant therapy in resected, high-risk stage III melanoma. The data revealed Keytruda showed significantly prolonged recurrence-free survival (RFS), cut the risk of disease recurrence or death by 43 percent compared to placebo, and for the primary endpoint of RFS, the one-year RFS rate was 75.4 percent compared to 61 percent for placebo.

“These data demonstrate compelling evidence that adjuvant treatment for Keytruda provides significant recurrence-free survival benefit after surgery in patients with high-risk Stage III melanoma,” said Roy Baynes, senior vice president and head of Global Clinical Development, chief medical officer, Merck Research Laboratories, in a statement. “These are the first data for Keytruda in the adjuvant setting and mark an important advancement for the treatment of resected stage III melanoma. We are pleased to be sharing these data with global regulatory authorities.”

And many are looking for data to be released today of Keytruda combined with chemotherapy to treat advanced lung cancer. Although a miracle drug, it doesn’t cure everything. The U.S. Food and Drug Administration (FDA) ordered the company to halt two trials last year in blood cancer after patient deaths. But it may be as close to a miracle cure for many types of cancers as has ever been discovered.

Subscription JPEG

Back to news