Global Insight Perspective | |
Significance | The setting up of BioVentures is aimed at capturing market opportunities through 2017, with research initiated on two biosimilar drugs and a potential launch in 2012. On its drug discovery pipeline, Merck has indicated that it has 47 drug candidates in clinical development. |
Implications | The pharma major is looking to execute a strategic business mix, balancing drug lifecycle management and new drugs, including introducing the biosimilars dynamic. |
Outlook | Merck's move into biologics is likely to be the start of a trend among Big Pharma seeking to optimise the potential presented by the global biosimilars market, which is yet to be legislated in the United States. The successful filing and approval of three potential new drug applications in 2009 will enhance revenue prospects for the firm. |
In a significant development, Merck & Co announced the setting up of a BioVentures unit aimed at developing, manufacturing, and marketing follow-on biologics (the latter are also known as biosimilars). The firm provided an insight into Research and Development (R&D) progress and business strategies, reiterating the aim of expanding its businesses to geographical locations, namely emerging markets, as well.
First, on Merck BioVentures: the division is billed as an example of the diversification in R&D activities that will not only facilitate innovation but also provide a fertile ground for a sustainable business in new, challenging environments such as biosimilars. The division will incorporate Merck's proprietary glyco-engineering technology, expected to drive its biosimilars portfolio. The firm believes that market opportunities for biosimilars will emerge, with patent expiries of key biologics throughout 2017. Hence, in response, Merck is expecting to launch its first biosimilars product, MK-2578, for the treatment of anaemia in 2012, and anticipates five more candidates in late-stage development by that year.
The second focus is on the update provided on the novel drug discovery pipeline advanced registered so far. The firm has 47 drug candidates in various stages of clinical development, nine in Phase III, 15 in Phase II and 23 in Phase I. The therapeutic areas of focus are: bone, respiratory, immunology and endocrine, cardiovascular, diabetes and obesity, infectious diseases, neuroscience, oncology, and vaccines. The table below provides details of seven of the Phase III candidates.
Merck & Co: Drug Candidates in Phase III clinical trials | |||
Drug Candidate | Active Ingredient | Therapeutic Area (Indication) | Anticipated Filing Year |
MK-7418 | Rolofylline | Cardiovascular (Heart Failure) | 2009 |
MK-0974 | Telcagepant | Neuro-Degenerative Disorders (Migraine) | 2009 |
MK-8669 | Deforolimus | Oncology (Bone Sarcomas) | 2010 |
V503 | Human Papillomavirus | Vaccine (cervical cancer) | 2012 |
MK-0822 | Odanacatib | Musculoskeletal (Osteoporosis) | 2012 |
MK-0524A | Niacin/Laropiprant | Cardiovascular | 2012 |
MK-0859 | Anacetrapib | Cardiovascular | 2014 |
Source: Merck & Co | |||
In 2009, Merck will file new drug applications for three candidates, telcagepant, rolofylline and ezetimibe/atorvastatin, and will also seek to gain approval of supplemental filings relating to the widening of indications on Gardasil (human papillomavirus vaccine) and the HIV drug Isentress. The firm has also indicated it expects six drug candidates to progress to Phase III clinical trials in 2009, including V710, a staphylococcus aureus vaccine, and MK 0633, a once-daily 5-lipoxygenase inhibitor as a treatment for chronic obstructive pulmonary disease.
Outlook and Implications
These two developments come against a backdrop of subdued investor response to the firm's 2009 revenue and profit estimates. Merck has already indicated that 2009 will be a difficult year in terms of topline and bottomline growth, but by providing the latest progress report on its strategic plan, the firm has sought to shift attention to the long-term prospects. The BioVentures division is a key development in this regard, showing that the firm recognises the potential for turning a challenge on biological product patents into an opportunity by expanding its biosimilars research portfolio. It is clear that Merck is re-evaluating its business strategies and is not afraid to cross the barrier into the generics industry. As the challenges of generic competition begin to hurt revenues and increase costs, particularly on litigation, Big Pharma firms are expected to pick up on this trend of considering generics as a growth opportunity. The entry into the biosimilars market also offers a different dimension with respect to the U.S. market. There is no specific approval pathway for biosimilars in place at present. However, despite this, Merck's involvement at this stage indicates that the firm is setting up a platform and increasing preparedness to enter that market as soon as the pathway is established. In terms of the R&D pipeline development, the new filings will be watched closely in light of Merck's regulatory setbacks in 2008. If successful, the approval will enhance revenues for its product franchises.
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