Merck KGaA (MRK)’s experimental drug L- BLP25 missed the main goal of a trial in lung cancer patients, denting the company’s ambitions of turning the medicine into a $1 billion-a-year product.
The drug, formerly known as Stimuvax, failed to improve patient survival significantly in a late-stage study of more than 1,500 patients, Darmstadt, Germany-based Merck said today in a statement. Further research will focus on smaller groups of patients who showed positive response to the drug, and results will be discussed with regulators in coming months, it said.
Merck fell the most in seven months after the latest setback in an 11-year effort to develop L-BLP25, a drug originated by U.S. partner Oncothyreon Inc. (ONTY:US), into a marketable product. While Merck is implying that there may be some hope for the vaccine, it’s still too early to say that, and the company would probably have to conduct further trials, Edouard Aubery, an analyst with Equinet AG, said in a phone interview today.
“This could have been a potential blockbuster, but now it’s been taken off the table,” he said. Aubery had estimated peak annual sales at 1 billion euros ($1.32 billion), with only a 25 percent probability that the vaccine would make it to market after Merck signaled that L-BLP25 was a “high-risk project.”
Merck fell as much as 4.1 percent to 97.50 euros, the steepest intraday drop since May 9, and was trading down 1.8 percent at 3:21 p.m. in Frankfurt. That pared the stock’s gain this year to 29 percent, valuing Merck at 21.7 billion euros. Oncothyreon plunged as much as 62 percent to $1.71 in Nasdaq trading, the biggest intraday decline since June 17, 2003, and was 59 percent lower at 10:22 p.m. in New York. That gave the company a market value of $106.9 million.
Oncothyreon licensed L-BLP25 to Merck in 2001. Success in the trial, known as Start, would have triggered a $90 million payment to the Seattle-based company, plus royalties on sales in the mid-teens in the U.S. and the high single digits in the rest of the world, the drugmaker said in 2011.
L-BLP25 is a therapeutic vaccine designed to stimulate a patient’s immune system to identify and target cancer cells where the MUC1 gene is present. GlaxoSmithKline Plc (GSK) is also developing a therapeutic cancer vaccine targeting the MAGE-A3 gene which is present in a number of cancers and expects data from late-stage trials next year.
Therapeutic cancer vaccines, which are not to be confused with preventative vaccines like flu shots, have been difficult to develop. Dendreon Corp. (DNDN:US)’s Provenge, a medicine that targets prostate tumors, is the only approved therapeutic cancer vaccine on the market, yet it has struggled to garner sales due to its $93,000 price tag and competition from existing drugs.
Merck’s Start trial enrolled patients with advanced, inoperable lung cancer whose disease was stable following chemoradiotherapy. The U.S. Food and Drug Administration put the program on hold in March 2010 after a patient developed a brain infection. Merck was allowed to resume two lung cancer trials in June 2010 and scrapped a test of the vaccine in breast cancer.
“It is disappointing” that the testing “did not meet its primary endpoint,” Frances Shepherd, a medical professor at the University of Toronto who coordinated the trial, said in the statement. “However, notable treatment effects were observed in certain subgroups of patients and warrant further investigation of L-BLP25.”
Merck KGaA, which isn’t related to the U.S.-based Merck & Co. (MRK:US), plans to submit the results to a peer-reviewed journal for publication and present the data at an international scientific meeting. Stefan Oschmann, head of pharmaceuticals, and Annalisa Jenkins, head of global drug development and medical for Merck Serono, the company’s pharmaceutical unit, were unavailable for comment, Gangolf Schrimpf, a spokesman, said.
Merck is reorganizing with job cuts, factory closings and a review of its new-product pipeline in response to setbacks for some key medicines. Results of separate trials earlier this year showed that Merck’s Erbitux treatment for colorectal cancer and head and neck tumors failed to help patients with advanced cases of stomach cancer and colon cancer.
Merck scrapped development of the cladribine pill for multiple sclerosis in 2011. In September this year, the company withdrew an application to market Erbitux for use in a subgroup of patients with non-small cell lung cancer.
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