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Merck KGaA seeking partners to develop drug pipeline


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Merck KGaA seeking partners to develop drug pipeline

Merck KGaA is looking for partnerships to develop some of its pipeline drugs even as sales are starting to flow in from new products.

The Darmstadt, Germany-based company is exploring partnerships for its potential cancer treatment TGF-ß Trap as well as for a BTK-inhibitor, which is being developed for multiple sclerosis.

While TGF-ß Trap is undergoing phase 1 trials for non-small cell lung cancer and human papillomavirus-associated cancers, the BTK-inhibitor evobrutinib is in the phase 2 stage.

With a focus on research and development, the company will require disciplined capital allocation and a major strategic partner to maximize the potential of its assets in different indications, Belén López, CEO of Merck's healthcare business said on an earnings call.

Merck agreed earlier in May to partner with Pleasanton, Calif.-based SFJ Pharmaceuticals Inc. to develop abituzumab as the initial treatment for a certain type of colorectal cancer.

Reuters reported in April that the German company was looking for partners to help fund clinical studies for its experimental drugs, including lung cancer drug tepotinib.

Merck is gearing up to present clinical trial results for TGF-ß Trap and tepotinib at the annual conference of American Society of Clinical Oncology.

"Our focused strategy and our disciplined approach to funding will ask for a very robust pipeline prioritization in terms of what are we going to externalize, be a partnering or external funding, what kind of co-development approaches are we going to look versus what we are going to keep in-house. And eventually, such a decision is not going to be a static but is a function of emerging clinical data, the evolving market opportunity, internal resources, et cetera," said López.

Merck also reported modest sales from newly launched products — skin cancer drug Bavencio and multiple sclerosis therapy Mavenclad. Bavencio brought in €12 million mainly in the U.S., and Mavenclad contributed €13 million in net sales largely from Germany.

The company is planning a U.S. filing for Mavenclad in the second quarter of 2018, with higher sales expected from a launch in the U.K. and other European markets.

Bavencio, which has recently suffered setbacks in a lung cancer and a gastric cancer clinical trial, is expected to reach mid-double-digit sales for in 2018.

Merck, which also sells laboratory products as part of its life science business, is targeting an incremental 2 billion in sales from its drug pipeline by 2022.

While the company's life science business continues to be stable with a slight rise in revenue at 1.49 billion from 1.48 billion, net sales from performance materials business, which makes liquid crystal displays, fell 12% year over year to 564 million.

CFO Marcus Kuhnert told analysts that the competitive environment has "quite fundamentally changed," but it would be too narrow to nail down the problem only to competition in China, adding that the company is facing a tougher environment with other customers as many of the big panel manufacturers are returning to a dual or even multiple sourcing strategy.

"That means we are struggling to defend the very high market shares we were enjoying for certain period of time in the past because that does not go well together with the strategy of the big panel manufacturers to have a more balanced supply going forward," said Kuhnert.