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FDA Panel Laps Up Merck's Keytruda & Lynparza for New Maladies

Zacks Equity Research

Merck & Co., Inc. MRK announced that the FDA’s Oncologic Drugs Advisory Committee (ODAC) has voted (9-4) in favor of approving its blockbuster PD-L1 inhibitor Keytruda for the treatment of patients with high-risk, non-muscle invasive bladder cancer (NMIBC). Currently, there are limited number of non-surgical treatment options available for the given patient population.

The committee’s discussions were based on the supplemental biologics license application (sBLA) for Keytruda, to which the FDA has granted a priority review earlier this month. The sBLA was based on data from the phase II KEYNOTE-057 study. Through this, the company is seeking approval of Keytruda, as a monotherapy to treat certain patients with high-risk NMIBC, unresponsive to the widely-used Bacillus Calmette-Guerin (BCG) therapy in the management of bladder cancer.

With the FDA granting priority review to the sBLA, Merck expects a decision in January 2020. Notably, the regulatory agency is not bound by the committee’s guidance but takes its advice into consideration.

Shares of Merck have rallied 16.5% so far this year compared with the industry’s increase of 9.9%.

In separate press release, Merck along with partner AstraZeneca plc AZN announced that ODAC also voted (7-5) in favor of a nod to their PARP-inhibitor Lynparza as a first-line maintenance monotherapy for pancreatic cancer.

In August 2019, the FDA accepted and granted a priority review to the supplemental new drug application (sNDA) for Lynparza with respect to the given indication. A decision from the regulatory body is expected in the fourth quarter of this year.

This sNDA was based on data from the phase III POLO study, which evaluated Lynparza as maintenance monotherapy versus placebo in patients with germline BRCA-mutated metastatic pancreatic cancer whose disease has not progressed for at least 16 weeks following first-line platinum-based chemotherapy.

A similar filing in the EU for use of Lynparza tablets for BRCAm pancreatic cancer is currently under review with a decision pending in the first half of 2020.

Additionally, Merck announced that its Animal Health division has completed the acquisition of Vaki, a maker of fish farming and wild fish conservation monitoring equipment, from Pentair plc PNR. The financial terms of the deal were not disclosed.

Zacks Rank & Another Key Pick

Merck currently carries a Zacks Rank #2 (Buy). Another top-ranked stock in the large cap pharma sector is Bristol-Myers Squibb Company BMY, which carries the same Zacks Rank as Merck. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bristol-Myers’ earnings estimates have been revised 4.4% upward for 2019 and 11.6% for 2020 over the past 60 days. The stock has rallied 23.4% year to date.

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