Patent Cliff Crisis Averted? Merck & Co., Inc. (MRK.US) Keytruda subcutaneous injection version meets primary endpoints in phase 3 trial.

On Tuesday, Merck & Co., Inc. (MRK.US) launched a new formulation for its famous cancer therapy pembrolizumab (Keytruda), marking a significant milestone for the company as its blockbuster intravenous version of Keytruda faces major regulatory hurdles, and Keytruda generated $25 billion in sales in 2023. Merck & Co., Inc. stated that in a key phase 3 trial, the subcutaneous version of the anti-PD1 drug met its primary goal and performed equally to the FDA-approved intravenous version, making it a first-line choice for lung cancer. Despite a relatively quiet reaction on Wall Street, this development marks a crucial step for Merck & Co., Inc. in expanding market access, as this drug accounts for over 40% of the company's total sales. Merck & Co., Inc. stated that it is preparing to submit applications for the new formulation to regulatory agencies worldwide "as soon as possible." Time is crucial for the New Jersey-based pharmaceutical giant, as Keytruda will face significant regulatory and market resistance in the coming years. With Merck & Co., Inc. losing exclusive market rights for the drug in the US in 2028, a substantial portion of its revenue will be at risk as competitors rush to develop cheaper biosimilar drugs, which the company can avoid by using the injectable version. The injectable Keytruda includes the drug delivery compound berahyaluronidase alfa from Korean biotech company Alteogen, which will not face competition in the short term, while the intravenous Keytruda faces the threat of biosimilars. Furthermore, the injectable Keytruda will be more convenient than the current intravenous Keytruda administered to patients in infusion centers, which requires 30 minutes every three to six weeks. Marjorie Green, head of oncology clinical development at Merck & Co., Inc., stated that the new drug version takes about 2-3 minutes, which could improve patient experience compared to intravenous injection and increase access for patients and healthcare providers. In addition to the patent cliff, Merck & Co., Inc. anticipates facing medical insurance price negotiations for intravenous Keytruda in 2028. However, the injectable version with new ingredients may be exempt from the negotiation process, allowing the company to set pricing terms for the more convenient option. Merck & Co., Inc. CEO Robert Davis stated in the first-quarter 2024 earnings call that the company expects around 50% of regular Keytruda patients to switch to the injectable version by 2028. Davis added, "So we see the subcutaneous injection as a potentially significant market."