Merck Shares Slump After Multiple Sclerosis Drug Fails in Late-Stage Trials
December 06 2023 - 5:14AM
Dow Jones News
By Helena Smolak
Shares of Germany's Merck KGaA plunged after its experimental
drug evobrutinib failed in two late-stage trials of patients with
relapsing forms of multiple sclerosis.
At 0927 GMT on Wednesday, Merck shares traded 13% lower at
EUR140.10, taking the stock's year-to-date loss to 23% and erasing
gains made in recent weeks after the company in late October
forecast a return to sales growth next year.
The German pharmaceutical-and-chemical group said late Tuesday
that the multiple sclerosis drug didn't show strong enough efficacy
in reducing annualized relapse rates compared with Aubagio, an oral
drug for the disease owned by Sanofi. As a result, the drug didn't
meet the primary goal of the trials, Merck said.
The overall safety and tolerability of the drug was consistent
with previous test results, Merck said.
The company will complete a full evaluation of the recent data
and will work with investigators on the future presentation and
publication of the results, it said.
Analysts said Merck's trial setback could cast a cloud on a new
class of multiple-sclerosis drugs that inhibit the Bruton tyrosine
kinase protein.
The results could have negative implications for similar assets
that peers Sanofi, Roche Holding and Novartis are developing as
multiple sclerosis treatments, Jefferies analysts said in a
research note.
Shares in Roche and Sanofi at 0924 GMT fell 1% and 0.8%,
respectively, while Novartis traded up 1.3% following news of a
U.S. approval for a different drug.
Data from Sanofi's tolebrutinib, Roche's fenebrutinib and
Novartis's remibrutinib is due in mid-2024, 2025 and 2026,
respectively, Citi analysts said in a research note.
Merck is now unlikely to continue development efforts for
evobrutinib in light of the trials' data, the Citi analysts said,
citing discussions with the company. Citi had forecast peak sales
for the drug of 2.1 billion euros ($2.27 billion) in 2035.
Investors' focus on Merck's healthcare pipeline will now shift
to its xevinapant oncology drug, which is in phase 3 trials and
could have potential to change the treatment paradigm in head and
neck cancer, the Citi analysts said.
Write to Helena Smolak at helena.smolak@wsj.com
(END) Dow Jones Newswires
December 06, 2023 04:59 ET (09:59 GMT)
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