Latest news with #post-Keytruda
Irish Examiner
29-07-2025
- Business
- Irish Examiner
MSD plans $3bn cuts amid competition for Irish-manufactured cancer drug Keytruda
MSD is slashing $3bn (€2.59bn) from its annual spending as it braces for off-brand competition to its Irish-manufactured cancer drug Keytruda, the best-selling medicine in the world. The drugmaker will cut administrative, sales and research jobs, as well as reduce its real estate holdings around the world, the company said in a statement on Tuesday. The company expects the restructuring to be completed by the end of 2027, the year before Keytruda's key patents expire and the drug faces US government price cuts. The company said it plans to reinvest the savings into developing new drugs and launching new products. MSD shares were down 1.9% in premarket trading in New York. For now, MSD's cash cow is still propelling growth. Keytruda beat analysts' sales estimates in the second quarter, growing by 9% year-over-year and helping the company outperform Wall Street's profit expectations. Quarterly revenue was in-line with analysts' view, and MSD narrowed its full-year projections for sales and profit. The planned restructuring comes just days before US president Donald Trump's long-delayed tariffs on pharmaceutical imports are slated to start. Levies are expected to begin August 1 on drugs brought in from the European Union, with broad tariffs on the entire sector promised later in the month. MSD has already taken defensive action, stockpiling enough doses of Keytruda, which is primarily manufactured in Ireland, to protect itself from any tariffs imposed in 2025. It also previously disclosed plans to invest more than $9bn (€7.78bn) in US manufacturing over the next four years, part of an effort to make more of its medicines domestically. The company reiterated that it expects to spend $200m (€172m) on tariffs in 2025, a number that reflects levies already in place and doesn't account for future tariffs on pharmaceuticals. MSD has lost more than 30% of its value over the last 12 months amid mounting investor concern about its post-Keytruda future. The cancer medicine accounts for nearly half of the company's revenue and continues to grow, foreshadowing a multibillion-dollar hole in the company's business plan. It's also still dealing with the fallout over its second-biggest medicine, the HPV vaccine Gardasil. A dramatic decline in Chinese demand forced it to halt shipments to the country and rescind its previous forecast of $11bn (€9.5bn) in annual sales of the shot by 2030. Gardasil sales fell 55% in the second quarter. Excluding China, sales declined 3%. The company has touted Winrevair, approved to treat a rare lung disease, as a blockbuster in the making and pointed to a pipeline of new medicines for cancer, cardiovascular disease and HIV. Sales of Winrevair outperformed analysts' estimates in the second quarter, an encouraging sign for its ongoing launch. The company's animal health business beat expectations on the quarter, while its vaccine for measles, mumps and rubella fell short of projections. MSD's plan to ease Keytruda's inevitable decline rests in part on persuading patients and physicians to adopt an easier-to-use version of the drug, expected to win approval later this year. The revamped Keytruda, which is administered through a shot rather than an intravenous infusion, will eventually capture between 30% and 40% of the market for the original, MSD said.
Forbes
11-07-2025
- Business
- Forbes
Merck's Verona Acquisition: Plugging A $4B Hole In A $20B Gap
Photo by Smith Collection/Gado/Getty Images Merck's recent acquisition announcement sends a strong signal regarding its urgency to tackle the impending Keytruda patent cliff. The pharmaceutical leader has made an agreement to acquire the COPD drug manufacturer Verona Pharma for $10 billion, adding yet another potential blockbuster to its expanding collection of post-Keytruda assets. The Verona Deal: What Merck Gets Verona Pharma's most valuable asset is Ohtuvayre, an inhaled medication for chronic obstructive pulmonary disease that received FDA approval in June 2024. With anticipated peak annual sales of $4 billion, the drug is a significant addition to Merck's revenue diversification strategy. This acquisition was expected given our earlier analysis underscoring Merck's urgent need to address the Keytruda patent cliff set for 2028. Additionally, see – ProKidney: What's Happening With PROK Stock? The Math Still Doesn't Add Up Although this acquisition signifies progress, it's evidently insufficient to resolve Merck's fundamental issue. The company anticipates a potential $15-20 billion decline in Keytruda's sales as biosimilar competition enters the market. Even if Ohtuvayre achieves its peak sales forecast, this acquisition is expected to generate only $3-4 billion in annual revenue contributions, covering roughly 20% of the anticipated Keytruda decline. The Bigger Picture This deal aligns with Merck's broader diversification strategy, which incorporates the promising Winrevair for pulmonary arterial hypertension and a robust pipeline of 20 potential blockbuster drugs with a combined potential of $50 billion. The company has shown its readiness to invest capital aggressively, following prior acquisitions such as the $11.5 billion Acceleron purchase and the $680 million Harpoon Therapeutics deal. Nevertheless, the overall impact of these actions still seems inadequate to completely counterbalance the eventual decline of Keytruda. While Merck has built a solid pipeline and commenced new product launches, the timeline remains tight and the revenue gap significant. The Investment Reality For Merck stock to experience substantial growth, the company must assure investors that it has a thorough solution to not only mitigate the effect of Keytruda biosimilar competition but also to achieve sales growth even after the patent expiration. That level of assurance does not appear to be materializing at this time. For context, Merck stock has decreased by 16% year-to-date, lagging behind the broader S&P 500 index, which has risen by 7%, and several of its peers such as Johnson & Johnson and AbbVie, both of which have increased by 6% The acquisition of Verona Pharma is a step forward, yet it also underscores the scale of Merck's challenge. At $10 billion for a drug with $4 billion peak sales potential, the company is investing in assets that provide only partial remedies to a significant revenue gap. Looking Forward Merck's acquisition strategy reflects management's understanding of the Keytruda cliff and their determination to address it. However, the company will require several more transactions of a similar scale, effective pipeline execution, and possibly some level of market expansion to completely substitute Keytruda's contribution. Until investors perceive a clearer trajectory for growth beyond 2028, Merck's valuation is likely to remain under pressure despite these strategic initiatives. For context, at its current price of around $85, MRK stock is trading at a little under 11 times its trailing adjusted earnings of $7.79 per share. This is lower than the stock's historical average price-to-earnings ratio of roughly 15 times. Of course, other factors are also influential, including slowing Gardasil sales in China. Additionally, see – Merck's Valuation Ratios. In summary, the race against the 2028 patent cliff persists, and although Merck is putting forth significant effort, it remains uncertain whether the company can maintain its growth narrative. Merck's heavy dependence on Keytruda is a considerable concern for investors, as nearly half of the company's total sales are derived from this single product. This is precisely why sector diversification is a crucial factor we evaluate for our Trefis High Quality (HQ) portfolio. This strategic focus on achieving a balanced mix of companies across sectors has allowed the HQ portfolio to outperform the S&P 500, attaining returns exceeding 91% since its inception. Invest with Trefis Market-Beating Portfolios See all Trefis Price Estimates
Yahoo
09-06-2025
- Business
- Yahoo
Merck claims study success with PCSK9 cholesterol pill
This story was originally published on BioPharma Dive. To receive daily news and insights, subscribe to our free daily BioPharma Dive newsletter. An experimental cholesterol-lowering pill from Merck & Co. succeeded in a pair of late-stage studies, the company said Monday. In one study, Merck's drug, enlicitide, was tested against a placebo in people already taking statins and who have either an inherited condition that causes high cholesterol or are at risk of atherosclerosis. The second trial evaluated enlicitide against other oral therapies, such as ezetimibe, in people on statins and with abnormally high levels of fats in the blood. Merck didn't provide specifics, but said in both cases enlicitide met all of its study objectives and demonstrated 'statistically significant and clinically meaningful reductions' in LDL-C, or 'bad' cholesterol, without any important differences in the number of adverse events. Details will be presented at a future medical meeting. Company shares climbed 2% in early trading Monday. A decade ago, the Food and Drug Administration approved a pair of injectable treatments that could dramatically lower cholesterol in people with heart disease. The drugs, known as PCSK9 inhibitors for the cholesterol-regulating protein they target, were hailed as medical breakthroughs and billed as multibillion-dollar sellers. Instead, their developers struggled to convince payers and physicians of their worth. Sales totals, until recently, have largely disappointed. Merck believes it will have better luck with enlicitide, which could be the first oral medication that blocks PCSK9. The company has bet heavily on its future, enrolling about 17,000 participants across several late-stage studies. And it's counting on enlicitide to become one of the products that can help it grow sales once the patents protecting Keytruda, its dominant cancer immunotherapy, expire later this decade. Questions about its post-Keytruda future have spurred a 40% share slide over the last year and heightened pressure on its next prospects to succeed. The company, for its part, has spoken boldly about enlicitide's promise. Research chief Dean Li has described it as likely becoming the first of its kind available, the 'most effective' cholesterol-lowering pill medicine on the market, and the foundation for future drug combinations. Enlicitide should also be able to sidestep the reimbursement issues long weighing down sales of PCSK9 blockers, CEO Robert Davis said during a presentation in January. Though the drug is a so-called macrocyclic peptide and thus more complicated to make than traditional small molecule pills, Merck has invested significantly in production and believes it can manufacture enlicitide at a low cost. That could help the company 'price it in a way that won't create the excess challenges' others have had and obtain a 'competitive advantage,' Davis said. Still, there is a large collection of branded and generic cholesterol drugs available, as well as multiple newer medicines in advanced testing. AstraZeneca, for one, has a PCSK9 pill in development that some analysts believe to be a meaningful threat to Merck's program. While there are 'early signs' Merck's drug might be more effective, AstraZeneca's could be 'more tolerable and easier to administer,' Leerink Partners analyst Daina Graybosch wrote in April. The size of enlicitide's effects in Phase 3 testing, then, will be closely scrutinized. In Phase 2 trials, a variety of enlicitide doses lowered LDL levels by up to 60% after eight weeks of treatment. One of the Phase 3 studies Merck reported on Monday tested cholesterol levels after 24 weeks, and there is typically a 'degradation in efficacy' when companies move a drug into larger, longer trials, wrote Jefferies analyst Dennis Ding. Ding also speculated that drug adherence could be lower in Merck's studies, as food intake disrupts enlicitide effectiveness. 'The magnitude of benefit will be key to watch,' he wrote.
