07.14.15
Headquarters: Whitehouse Station, NJ
twitter.com/Merck
www.merck.com
TOP SELLING DRUGS
Merck’s 2014 pharmaceutical sales declined 4% to $36.0 billion, including a 2% negative impact from foreign exchange and a 3% negative impact from patent expiries and product divestitures. The decline reflects lower revenue resulting from the ongoing impacts of the loss of market exclusivity for several products, including Temodar, a treatment for certain types of brain tumors, Singulair, a once-a-day oral medicine for the chronic treatment of asthma and for the relief of symptoms of allergic rhinitis, and Cozaar and Hyzaar, treatments for hypertension.
The revenue decline was also due to lower sales of Victrelis and PegIntron, medicines for the treatment of chronic HCV, Nasonex, an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms, and Vytorin, a cholesterol modifying product. These declines were partially offset by growth in Remicade and Simponi, treatments for inflammatory diseases, the diabetes franchise of Januvia/Janumet, Dulera Inhalation Aerosol, a combination medicine for the treatment of asthma, Implanon/Nexplanon, a single-rod subdermal contraceptive implant, as well as higher sales from acute care and animal health products. In addition, the company recognized revenue of $232 million in 2014 in connection with the sale of the U.S. marketing rights to Saphris.
Sales in the U.S. were $17.1 billion in 2014, a decline of 6% compared with $18.2 billion in 2013. The sales decrease was primarily due to the termination of the company’s relationship with AZLP, the divestiture of MCC and the ongoing impact of product divestitures. In addition, the decline reflects lower sales of Temodar, Victrelis, Vytorin and Nasonex, partially offset by higher sales of Dulera Inhalation Aerosol, the Januvia/Janumet franchise and Implanon/Nexplanon, as well as by the revenue recognized in connection with the sale of the U.S. marketing rights to Saphris.
International sales were $25.2 billion in 2014, a decline of 2% compared with $25.8 billion in 2013. Foreign exchange unfavorably affected international sales performance by 2% in 2014. The sales decrease reflects the divestiture of MCC. The decline was also driven by lower sales in the Pharmaceutical segment, reflecting declines in Japan, Europe and Canada. Sales in Japan declined 14% in 2014, to $3.4 billion, of which 8% was due to the unfavorable effect of foreign exchange. The sales decline was largely driven by the biennial price reductions and repricings that occurred in 2014, product divestitures and the ongoing impacts of the loss of the market exclusivity for several products, including Cozaar and Hyzaar, as well as lower sales of Gardasil, a vaccine to help prevent certain diseases caused by four types of HPV, reflecting the Japanese government’s decision in 2013 to suspend proactive recommendation of HPV vaccines, partially offset by higher sales of Pneumovax 23, a vaccine to help prevent pneumococcal disease. Sales in Europe and Canada declined 2% in 2014, to $10.4 billion, including a 1% favorable effect from foreign exchange reflecting lower sales of Singulair, Nasonex and Victrelis, as well as from product divestitures and ongoing generic erosion and fiscal austerity measures in this region, partially offset by growth in Simponi, Remicade, Janumet and Januvia. Sales in the emerging markets were $7.8 billion in 2014, essentially flat compared with 2013, including a 5% unfavorable effect from foreign exchange, reflecting higher sales of vaccine, acute care, and diabetes products, offset by lower sales of HCV products, as well from product divestitures. Total international sales represented 60% and 59% of total sales in 2014 and 2013, respectively.
Pipeline Progress
The company continued to make steady progress in advancing its late-stage pipeline, and received U.S. approval for six new products that are launching in 2015, including novel medicine Keytruda (pembrolizumab) for the treatment of advanced melanoma in patients whose disease has progressed after other therapies. Keytruda is the first FDA-approved anti-PD-1 therapy. An estimated 2,000 patients were receiving treatment with Keytruda in December 2014 and it received Breakthrough Therapy Designation from the FDA for advanced non-small cell lung cancer (NSCLC).
The company said it expects to submit a supplemental Biologics License Application in mid-year 2015 to the FDA for Keytruda for the treatment of patients with epidermal growth factor receptor (EGFR) mutation-negative and Anaplastic Lymphoma Kinase (ALK) rearrangement-negative NSCLC whose disease has progressed on or following platinum-containing chemotherapy. Keytruda continues to be studied in more than 30 cancers and in 20 combination settings, and Merck has presented data in a number of different tumor types.
In addition, the FDA approved Belsomra for the treatment of adults with insomnia who have difficulty falling asleep and/or staying asleep, Gardasil 9, a nine-valent HPV vaccine, and Zontivity, a protease-activated receptor-1 (PAR-1) antagonist for the reduction of thrombotic cardiovascular events in patients with a history of myocardial infarction or with peripheral arterial disease.
Additionally, Merck currently has candidates under review with the FDA: MK-8616, Bridion (sugammadex) Injection, a medication for the reversal of two types of neuromuscular blocking agents used during surgery; and V419, an investigational pediatric hexavalent vaccine that the Company is developing in partnership with Sanofi Pasteur designed to help protect against six important diseases - diphtheria, tetanus, pertussis (whooping cough), polio (poliovirus types 1, 2, and 3), invasive disease caused by Haemophilus influenzae type b (Hib), and hepatitis B. Zerbaxa is also under review in the EU.
As a result of prioritizing its research efforts, Merck is focused on the therapeutic areas that it believes can make the most impact on addressing critical areas of unmet medical need, such as cancer, hepatitis C, cardiometabolic disease, resistant microbial infection and Alzheimer’s disease. In 2014, Merck accelerated several of its key clinical programs, positioning the company for long-term growth. Merck now has more than 10 candidates in Phase III development in its core therapeutic areas, as well as other areas with significant potential. MK-5172A, an all oral combination regimen consisting of MK-5172, grazoprevir, an investigational HCV NS3/4A protease inhibitor, and MK-8742, elbasvir, an investigational HCV NS5A replication complex inhibitor, is currently in Phase III development.
The company expects to file a New Drug Application (NDA) with the FDA in the first half of 2015 for MK-5172A. As a result of portfolio prioritization, the company is out-licensing or discontinuing selected late-stage clinical development assets and reducing its focus on platform technologies. During 2014, the company out-licensed MK-3222 (tildrakizumab), an investigational treatment for chronic plaque psoriasis, and divested its Sirna Therapeutics, Inc. subsidiary and related RNAi technology assets.
On the M&A front
Merck also enhanced its pipeline with external innovation, during the year. It enhanced its hepatitis pipeline by acquiring Idenix Pharmaceuticals, biopharma company engaged in the discovery and development of next generation treatments for hepatitis C virus (HCV). Merck purchased Idenix for approximately $3.9 billion. Idenix, has three HCV drug candidates in development: two nucleotide prodrugs (IDX21437 and IDX21459) and a NS5A inhibitor (samatasvir). These candidates are being evaluated for potential pan-genotypic fixed-dose combination regimens.
Merck also boosted its oncology pipeline when it acquired OncoEthix, a privately held biotechnology company specializing in oncology drug development. Merck paid $153 million, which included an upfront cash payment of $110 million and future additional milestone payments of as much as $265 million that are contingent upon certain clinical and regulatory milestones being achieved. Through the acquisition, Merck has gained an investigational, novel oral BET (bromodomain) inhibitor, OTX015, which is currently in Phase Ib studies for the treatment of hematological malignancies and advanced solid tumors.
In addition, Merck strengthened its antibiotics portfolio by acquiring Cubist Pharmaceuticals, Inc. in a transaction valued at approximately $9.5 billion. Cubist develops and supplies antibiotics to treat serious and potentially life-threatening infections caused by a broad range of increasingly drug-resistant bacteria. Cubist’s antibiotic CUBICIN is the only approved once-a-day therapy for both S. aureus bacteremia and complicated skin and skin structure infections (cSSSI).
Cubist has a late-stage pipeline of anti-infective medicines, and as part of its acquisition Merck acquired Zerbaxa (ceftolozane/tazobactam), an antibiotic approved by the FDA in December 2014 to treat Gram-negative bacteria, a key cause of in-hospital infections. ZERBAXA, which is pending FDA approval. Merck expects the acquisition to add more than $1 billion of revenue to its 2015 base.
During the year Merck sold its Consumer Care business to Bayer AG for $14.2 billion. Bayer AG acquired Merck’s existing OTC business, including the global trademark and prescription rights for Claritin and Afrin.
The companies also entered a clinical development collaboration to market and develop a portfolio of soluble guanylate cyclase (sGC) modulators, including Bayer’s Adempas (riociguat), which is approved to treat pulmonary arterial hypertension (PAH) and patients with chronic thromboembolic pulmonary hypertension (CTEPH). Adempas is currently marketed in the U.S., Europe and Japan. The companies will share costs and profits from the collaboration and implement a joint development and commercialization strategy.
The collaboration also includes development of vericiguat (BAY102), which is currently in Phase II trials for worsening heart failure, as well as opt-in rights for other early-stage sGC compounds in development at Bayer. In turn, Merck will make available its early-stage sGC compounds under similar terms. Bayer will receive $1 billion up-front with the potential for additional success-based milestone payments.
Merck signed three separate clinical collaboration agreements, through subsidiaries, with Amgen, Incyte Corp. and Pfizer to evaluate novel combination regimens with MK-3475, Merck’s investigational anti-PD-1 immunotherapy.
Merck and Samsung Bioepis Co., Ltd., expanded their collaboration with an agreement to develop, manufacture and commercialize MK-1293, an insulin glargine candidate for the treatment of patients with type 1 and type 2 diabetes. Phase III studies in type 1 and type 2 diabetes will begin soon. Merck and Samsung Bioepis have expanded their biosimilars collaboration to develop, manufacture and commercialize MK-1293, an insulin glargine candidate currently in Phase III development for the treatment of type 1 and type 2 diabetes.
Merck and Samsung Bioepis will collaborate on clinical development, regulatory filings and manufacturing. If approved, Merck will be responsible for commercialization. The initial collaboration established in February 2013 was to develop and commercialize multiple biosimilar candidates. Insulin glargine is currently marketed by Sanofi as Lantus. Lilly and Boehringer Ingelheim recently filed a biosimilar of insulin glargine for review with FDA, but Sanofi filed a patent infringement suit against the companies at the end of January, which could trigger a 30-month delay at the FDA.
twitter.com/Merck
www.merck.com
Headcount: | 70,000 | |
Year Established: | 2009 | |
Revenues: | $42,237 | (-4%) |
Pharma Revenues: | $36,042 | (-4%) |
Net Income: | $11,934 | (+164%) |
R&D: | $7,180 | (-4%) |
TOP SELLING DRUGS
Drug | Indication | 2014 Sales | (+/-%) |
Januvia/Janumet | diabetes, obesity | $6,002 | 3% |
Zetia/Vytorin | cholesterol | $4,166 | -3% |
Remicade | rheumatoid arthritis | $2,372 | 4% |
Gardasil | HPV vaccine | $1,738 | -5% |
Isentress | HIV/AIDS | $1,643 | 2% |
Proquad, MMR, and Varivax | vaccines | $1,394 | 7% |
Nasonex | allergic rhinitis | $1,099 | -18% |
Singulair | asthma | $1,092 | -9% |
Merck’s 2014 pharmaceutical sales declined 4% to $36.0 billion, including a 2% negative impact from foreign exchange and a 3% negative impact from patent expiries and product divestitures. The decline reflects lower revenue resulting from the ongoing impacts of the loss of market exclusivity for several products, including Temodar, a treatment for certain types of brain tumors, Singulair, a once-a-day oral medicine for the chronic treatment of asthma and for the relief of symptoms of allergic rhinitis, and Cozaar and Hyzaar, treatments for hypertension.
The revenue decline was also due to lower sales of Victrelis and PegIntron, medicines for the treatment of chronic HCV, Nasonex, an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms, and Vytorin, a cholesterol modifying product. These declines were partially offset by growth in Remicade and Simponi, treatments for inflammatory diseases, the diabetes franchise of Januvia/Janumet, Dulera Inhalation Aerosol, a combination medicine for the treatment of asthma, Implanon/Nexplanon, a single-rod subdermal contraceptive implant, as well as higher sales from acute care and animal health products. In addition, the company recognized revenue of $232 million in 2014 in connection with the sale of the U.S. marketing rights to Saphris.
Sales in the U.S. were $17.1 billion in 2014, a decline of 6% compared with $18.2 billion in 2013. The sales decrease was primarily due to the termination of the company’s relationship with AZLP, the divestiture of MCC and the ongoing impact of product divestitures. In addition, the decline reflects lower sales of Temodar, Victrelis, Vytorin and Nasonex, partially offset by higher sales of Dulera Inhalation Aerosol, the Januvia/Janumet franchise and Implanon/Nexplanon, as well as by the revenue recognized in connection with the sale of the U.S. marketing rights to Saphris.
International sales were $25.2 billion in 2014, a decline of 2% compared with $25.8 billion in 2013. Foreign exchange unfavorably affected international sales performance by 2% in 2014. The sales decrease reflects the divestiture of MCC. The decline was also driven by lower sales in the Pharmaceutical segment, reflecting declines in Japan, Europe and Canada. Sales in Japan declined 14% in 2014, to $3.4 billion, of which 8% was due to the unfavorable effect of foreign exchange. The sales decline was largely driven by the biennial price reductions and repricings that occurred in 2014, product divestitures and the ongoing impacts of the loss of the market exclusivity for several products, including Cozaar and Hyzaar, as well as lower sales of Gardasil, a vaccine to help prevent certain diseases caused by four types of HPV, reflecting the Japanese government’s decision in 2013 to suspend proactive recommendation of HPV vaccines, partially offset by higher sales of Pneumovax 23, a vaccine to help prevent pneumococcal disease. Sales in Europe and Canada declined 2% in 2014, to $10.4 billion, including a 1% favorable effect from foreign exchange reflecting lower sales of Singulair, Nasonex and Victrelis, as well as from product divestitures and ongoing generic erosion and fiscal austerity measures in this region, partially offset by growth in Simponi, Remicade, Janumet and Januvia. Sales in the emerging markets were $7.8 billion in 2014, essentially flat compared with 2013, including a 5% unfavorable effect from foreign exchange, reflecting higher sales of vaccine, acute care, and diabetes products, offset by lower sales of HCV products, as well from product divestitures. Total international sales represented 60% and 59% of total sales in 2014 and 2013, respectively.
Pipeline Progress
The company continued to make steady progress in advancing its late-stage pipeline, and received U.S. approval for six new products that are launching in 2015, including novel medicine Keytruda (pembrolizumab) for the treatment of advanced melanoma in patients whose disease has progressed after other therapies. Keytruda is the first FDA-approved anti-PD-1 therapy. An estimated 2,000 patients were receiving treatment with Keytruda in December 2014 and it received Breakthrough Therapy Designation from the FDA for advanced non-small cell lung cancer (NSCLC).
The company said it expects to submit a supplemental Biologics License Application in mid-year 2015 to the FDA for Keytruda for the treatment of patients with epidermal growth factor receptor (EGFR) mutation-negative and Anaplastic Lymphoma Kinase (ALK) rearrangement-negative NSCLC whose disease has progressed on or following platinum-containing chemotherapy. Keytruda continues to be studied in more than 30 cancers and in 20 combination settings, and Merck has presented data in a number of different tumor types.
In addition, the FDA approved Belsomra for the treatment of adults with insomnia who have difficulty falling asleep and/or staying asleep, Gardasil 9, a nine-valent HPV vaccine, and Zontivity, a protease-activated receptor-1 (PAR-1) antagonist for the reduction of thrombotic cardiovascular events in patients with a history of myocardial infarction or with peripheral arterial disease.
Additionally, Merck currently has candidates under review with the FDA: MK-8616, Bridion (sugammadex) Injection, a medication for the reversal of two types of neuromuscular blocking agents used during surgery; and V419, an investigational pediatric hexavalent vaccine that the Company is developing in partnership with Sanofi Pasteur designed to help protect against six important diseases - diphtheria, tetanus, pertussis (whooping cough), polio (poliovirus types 1, 2, and 3), invasive disease caused by Haemophilus influenzae type b (Hib), and hepatitis B. Zerbaxa is also under review in the EU.
As a result of prioritizing its research efforts, Merck is focused on the therapeutic areas that it believes can make the most impact on addressing critical areas of unmet medical need, such as cancer, hepatitis C, cardiometabolic disease, resistant microbial infection and Alzheimer’s disease. In 2014, Merck accelerated several of its key clinical programs, positioning the company for long-term growth. Merck now has more than 10 candidates in Phase III development in its core therapeutic areas, as well as other areas with significant potential. MK-5172A, an all oral combination regimen consisting of MK-5172, grazoprevir, an investigational HCV NS3/4A protease inhibitor, and MK-8742, elbasvir, an investigational HCV NS5A replication complex inhibitor, is currently in Phase III development.
The company expects to file a New Drug Application (NDA) with the FDA in the first half of 2015 for MK-5172A. As a result of portfolio prioritization, the company is out-licensing or discontinuing selected late-stage clinical development assets and reducing its focus on platform technologies. During 2014, the company out-licensed MK-3222 (tildrakizumab), an investigational treatment for chronic plaque psoriasis, and divested its Sirna Therapeutics, Inc. subsidiary and related RNAi technology assets.
On the M&A front
Merck also enhanced its pipeline with external innovation, during the year. It enhanced its hepatitis pipeline by acquiring Idenix Pharmaceuticals, biopharma company engaged in the discovery and development of next generation treatments for hepatitis C virus (HCV). Merck purchased Idenix for approximately $3.9 billion. Idenix, has three HCV drug candidates in development: two nucleotide prodrugs (IDX21437 and IDX21459) and a NS5A inhibitor (samatasvir). These candidates are being evaluated for potential pan-genotypic fixed-dose combination regimens.
Merck also boosted its oncology pipeline when it acquired OncoEthix, a privately held biotechnology company specializing in oncology drug development. Merck paid $153 million, which included an upfront cash payment of $110 million and future additional milestone payments of as much as $265 million that are contingent upon certain clinical and regulatory milestones being achieved. Through the acquisition, Merck has gained an investigational, novel oral BET (bromodomain) inhibitor, OTX015, which is currently in Phase Ib studies for the treatment of hematological malignancies and advanced solid tumors.
In addition, Merck strengthened its antibiotics portfolio by acquiring Cubist Pharmaceuticals, Inc. in a transaction valued at approximately $9.5 billion. Cubist develops and supplies antibiotics to treat serious and potentially life-threatening infections caused by a broad range of increasingly drug-resistant bacteria. Cubist’s antibiotic CUBICIN is the only approved once-a-day therapy for both S. aureus bacteremia and complicated skin and skin structure infections (cSSSI).
Cubist has a late-stage pipeline of anti-infective medicines, and as part of its acquisition Merck acquired Zerbaxa (ceftolozane/tazobactam), an antibiotic approved by the FDA in December 2014 to treat Gram-negative bacteria, a key cause of in-hospital infections. ZERBAXA, which is pending FDA approval. Merck expects the acquisition to add more than $1 billion of revenue to its 2015 base.
During the year Merck sold its Consumer Care business to Bayer AG for $14.2 billion. Bayer AG acquired Merck’s existing OTC business, including the global trademark and prescription rights for Claritin and Afrin.
The companies also entered a clinical development collaboration to market and develop a portfolio of soluble guanylate cyclase (sGC) modulators, including Bayer’s Adempas (riociguat), which is approved to treat pulmonary arterial hypertension (PAH) and patients with chronic thromboembolic pulmonary hypertension (CTEPH). Adempas is currently marketed in the U.S., Europe and Japan. The companies will share costs and profits from the collaboration and implement a joint development and commercialization strategy.
The collaboration also includes development of vericiguat (BAY102), which is currently in Phase II trials for worsening heart failure, as well as opt-in rights for other early-stage sGC compounds in development at Bayer. In turn, Merck will make available its early-stage sGC compounds under similar terms. Bayer will receive $1 billion up-front with the potential for additional success-based milestone payments.
Merck signed three separate clinical collaboration agreements, through subsidiaries, with Amgen, Incyte Corp. and Pfizer to evaluate novel combination regimens with MK-3475, Merck’s investigational anti-PD-1 immunotherapy.
Merck and Samsung Bioepis Co., Ltd., expanded their collaboration with an agreement to develop, manufacture and commercialize MK-1293, an insulin glargine candidate for the treatment of patients with type 1 and type 2 diabetes. Phase III studies in type 1 and type 2 diabetes will begin soon. Merck and Samsung Bioepis have expanded their biosimilars collaboration to develop, manufacture and commercialize MK-1293, an insulin glargine candidate currently in Phase III development for the treatment of type 1 and type 2 diabetes.
Merck and Samsung Bioepis will collaborate on clinical development, regulatory filings and manufacturing. If approved, Merck will be responsible for commercialization. The initial collaboration established in February 2013 was to develop and commercialize multiple biosimilar candidates. Insulin glargine is currently marketed by Sanofi as Lantus. Lilly and Boehringer Ingelheim recently filed a biosimilar of insulin glargine for review with FDA, but Sanofi filed a patent infringement suit against the companies at the end of January, which could trigger a 30-month delay at the FDA.
Arvinas LLC, a private biotechnology company creating a new class of drugs based on protein degradation, has formed a strategic collaboration with Merck in which Arvinas’ novel PROTAC technology will be used to degrade target proteins, with the goal of creating novel therapeutics. The multi-year collaboration will encompass multiple disease targets across several therapeutic areas. While the specifics of the financial arrangements were not disclosed, Arvinas will receive an up-front payment and funding to support Merck-related research. Additionally, Arvinas could earn up to $434 million if all research, development, regulatory and commercial milestone payments are successfully paid for products against all the targets initially selected by Merck, as well as tiered royalties. Merck may, at its discretion, elect to expand the collaboration to include additional disease targets. This decision would trigger an additional one-time payment, as well as payment of milestones and royalties on a product-by-product basis. |
Having suffered hard times over the past few years, Merck could be set to finish off 2015 with a bang. Strong as they are in the diabetes, 2014 wasn’t the best for Januvia in an incredibly cut throat market, however new study data published in April means they could now be flying the cardiovascular safety flag hoping for solid growth over the next five years. With the approval of Keytruda (pembrolizumab) in 4Q14 Merck has had a remarkable launch period banking them $50 million at the end of last year. Considering this was accompanied by five other drug launches at the end of 2014 and 2 others in the first quarter of 2015 (suvorexant, ceftolozane/tazobactam), things are certainly looking up. Merck may not be able to bounce back to the peak performance that it illustrated following the Schering-Plough merger in 2009 immediately—the knock-on effect of the demise of Singulair and the blockage in their R&D pipeline will prove too much. However, with recent announcements of collaborations with Eli Lilly, Eisai, Syndax Pharmaceuticals and TetraLogic focusing on Keytruda, they’re certainly trying to rein in the slide. —Adele Graham-King |