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Merck's MK-3102 Encourages

Zacks Equity Research

Merck (MRK) recently presented encouraging phase IIb data on its type II diabetes candidate, MK-3102, at the annual meeting of the European Association for the Study of Diabetes (:EASD). Results from the 12-week multicenter, randomized, double-blind, placebo-controlled dose-ranging study showed that MK-3102 led to a significant reduction in blood sugar compared to placebo. Moreover, MK-3102 was found to be well tolerated with a safety profile similar to placebo.

Merck said that the occurrence of symptomatic hypoglycemia was similar for MK-3102 and placebo. Five doses (0.25, 1, 3, 10 and 25 mg) of MK-3102 were evaluated in the study that was conducted in type II diabetes patients whose glycemic control was not sufficient on diet and exercise.

Merck intends to move MK-3102 into phase III studies. The successful development of MK-3102 would provide type II diabetes patients with a convenient once-weekly treatment option. Merck has a strong presence in the diabetes market in the form of drugs like Januvia, Janumet and Juvisync. The launch of a once-weekly treatment would be a strong addition to the company’s diabetes product portfolio.

The diabetes market, while crowded, represents significant commercial potential. Key players in the diabetes market include Eli Lilly (LLY) and Novo Nordisk (NVO) among others.

We note that Johnson & Johnson (JNJ) also presented data on its type II diabetes candidate, canagliflozin at the annual meeting of the EASD. Johnson & Johnson’s canagliflozin led to a significant decline in blood glucose levels when used in addition to insulin therapy compared to placebo. Moreover, patients in the canagliflozin arms experienced a reduction in body weight compared to placebo.

The phase III data was presented from an 18-week sub-study involving 1,718 patients who had been under insulin therapy for an average of 7.1 years. Johnson & Johnson said that two doses of canagliflozin were evaluated in the study – 100 mg and 300 mg. Patients were randomized to receive either canagliflozin dosage or placebo.

Johnson & Johnson has submitted marketing applications in the US and the EU for canagliflozin.

We currently have a Neutral recommendation on both Merck and Johnson & Johnson. While Johnson & Johnson carries a Zacks #2 Rank (short-term ‘Buy’ rating), Merck carries a Zacks #3 Rank (short-term ‘Hold’ rating).


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