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Merck's Keytruda Wins EU Nod for First-Line Head/Neck Cancer

Zacks Equity Research

Merck & Co., Inc. MRK announced that the European Commission granted approval to two new regimens of its blockbuster PD-L1 inhibitor Keytruda for the first-line treatment of patients with recurrent or metastatic head and neck squamous cell carcinoma (HNSCC).

With this latest nod, Keytruda can be prescribed to previously untreated patients with metastatic or unresectable, recurrent HNSCC as monotherapy or in combination with chemotherapy in patients whose tumors express PD-L1[CPS (combined proportion score )≥1). The approval was expected as last month, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) gave a positive opinion recommending the same.

The approval was based on data from the phase III KEYNOTE-048 study wherein Keytruda as a monotherapy and in combination with platinum and 5-fluorouracil (5-FU) chemotherapy demonstrated significant improvement in overall survival compared to the standard of care in the given patient population.  A similar nod came in from the FDA in the United States in June.

Merck’s shares have risen 11.6% this year so far compared with the industry’s increase of 4.8%.

 

 

Keytruda, Merck’s biggest product, is already approved for use in 20 indications across 12 different tumor types in the United States.

Keytruda generated sales of almost $8 billion in the first nine months 2019, up around 63% year over year. The drug’s sales are driven by the launch of new indications globally. Keytruda sales are benefiting from strong momentum in the indication of first-line lung cancer.

Other than first-line HNSCC in the United States and now in Europe, Keytruda has gained several label expansion approvals from the FDA this year so far. These are as an adjuvant therapy for high-risk stage III melanoma, previously treated advanced small-cell lung cancer (SCLC), Keytruda+Lenvima combo for endometrial carcinoma, Keytruda + Inlyta combo for first-line advanced renal cell carcinoma (RCC) and advanced esophageal cancer.

Keytruda was also approved for five new cancer line extensions in Japan, first-line advanced non-small cell lung cancer (NSCLC) in China and as Keytruda + Inlyta combo in the EU for first-line advanced RCC. All these label expansion approvals are boosting sales of Keytruda higher with the trend expected to continue in 2020.

In fact, the Keytruda development program is also progressing well and the drug is being studied for more than 30 types of cancer in above 1000 studies including 600 plus combination studies. Several regulatory decisions for new indications in the United States as well as in Europe are pending in 2020, which if approved, can further improve sales.

Merck is collaborating with several companies including Amgen AMGN, Incyte INCY, Glaxo and Pfizer PFE separately for the evaluation of Keytruda in combination with other regimens.

Undoubtedly, Keytruda’s solid growth prospects are based on increased utilization, approval for new indications and expectation of additional approvals worldwide.

Merck currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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