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Merck Gets FDA Nod for Keytruda Lung Cancer Label Expansion

Zacks Equity Research logoZacks Equity Research 8/21/2018 Zacks Equity Research

Merck & Co., Inc. MRK announced that its supplemental Biologics License Application (sBLA) looking to get overall survival data from the phase III KEYNOTE-189 study included on the label of Keytruda was granted approval by the FDA.

The study evaluated Merck’s PD-L1 inhibitor Keytruda in combination with Eli Lilly’s LLY Alimta (pemetrexed) and platinum chemotherapy (cisplatin or carboplatin) for the first-line treatment of patients with metastatic non-squamous non-small cell lung cancer (NSCLC), regardless of PD-L1 expression.

Data presented from the study in the past had shown that the combination treatment improved overall survival regardless of PD-L1 expression including in patients whose tumors tested negative for PD-L1. The combination significantly improved overall survival, reducing the risk of death by half (51%) compared to chemotherapy alone. Meanwhile, significant improvement in progression-free survival (PFS) was observed, with a reduction in the risk of progression or death of nearly half (48%) for patients in the Keytruda combination arm compared to chemotherapy alone.

Notably, in May 2017, this combination therapy was granted an accelerated approval by the FDA for the aforementioned indication. The approval was based on tumor response rate and PFS data from the phase II KEYNOTE-021 study. The positive readouts from the KEYNOTE-189 confirmatory study helped the company get the accelerated approval converted to a continued approval for the combo therapy, further reinforcing its position in the lung cancer market.

So far this year, Merck’s shares have outperformed the industry, rising 24.7% compared with a 4.8% increase for the industry.

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Keytruda is a key contributor to Merck’s sales growth. In a very short span of time, Keytruda has become Merck’s largest product. It is already approved for use in 12 indications across eight different tumor types in the United States.

The treatment generated sales of $1.67 billion in second-quarter 2018, up 13.8% sequentially and 89% year over year. Sales were driven by the launch of new indications globally. Keytruda sales are gaining particularly from strong momentum in the first-line lung cancer indication as it is the only anti-PD-1 approved in first-line setting.

Keytruda development program is also progressing well and is being studied for more than 30 types of cancer in more than 800 studies, including more than 400 combination studies. Merck is collaborating with several companies including Amgen AMGN, Incyte INCY, Glaxo and Pfizer separately for the evaluation of Keytruda in combination with other regimens. These include several lung cancer studies across multiple settings and stages of the disease, both as a monotherapy as well as a combination therapy.

Several regulatory decisions for new indications in the United States as well as in Europe are pending in the second half of 2018 and 2019, which if approved can further boost sales. A key decision on the label expansion of Keytruda as a first-line treatment for metastatic squamous non-small cell lung cancer (NSCLC), which is a difficult-to-treat lung cancer patient population, based on data from the phase 3 KEYNOTE-407 study is due in October.

Merck currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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