Analyzing German’s Merck KGaA oncology pipeline

The Germany-based economic and financial daily Handelsblatt today has published a long and detailed analysis of Merck KGaA’s oncology pipeline. The Darmastadt-based group’s leading product is Bavencio (avelumab), a immunotherapy co-developed with Pfizer through an agreement signed in 2014, which has fetched Merck $678m. At the moment, Bavencio has been approved only for two indications, but Pfizer and Merck have announced clinical trials for 6 cancer types more, in order to obtain approval for 7 new indications. The problem many analysts have detected is that Bavencio could not have enough differences from its competitors (Opdivo and Keytruda), and that its efficacy is not completely demonstrated yet.  At a recent meeting with investors Merck KGaA has announced its most recent results with its new molecule called M7824, a PD-L1/TGF-beta-Trap bifunctional asset against cancer cells. Sector analysts are positively impressed by M7824, which could help Merck make a difference from its immunotherapy competitors, such as Merck & Co, BMS and Roche. M7824 has demonstrated in early studies higher efficacy than Keytruda for lung cancer treatment. Merck KGaA is currently looking for a partner to co-fund further, expensive clinical trials with the new molecule. The Darmstadt-based company, indeed, does not have the same financial resources as its competitors; indeed, the German group has revenues of €6bn and a €1.8bn research budget, so that it ranks only 28th globally. Merck’s pipeline includes Tepotinip, a new molecule targeting a new class of receptors, still undergoing pre-clinical development, but likely to be a treatment for lung cancer. Merck KGaA’s oncology pipeline, therefore, seems highly solid and promises positive financial results.

(Source: Handelsblatt)