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Merck's (MRK) Two Keytruda sBLAs Get Accepted by the FDA

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Merck & Co., Inc. MRK announced that the FDA has accepted two supplemental biologics license application (sBLA) seeking expanded use of its blockbuster PD-L1 inhibitor, Keytruda in endometrial carcinoma and renal cell carcinoma (RCC)/kidney cancer.

The first sBLA is seeking approval of Keytruda for the adjuvant treatment of RCC at intermediate-high or high risk of recurrence following nephrectomy (surgical removal of a kidney) or following nephrectomy and resection of metastatic lesions. The FDA granted priority review to this sBLA with a decision expected on Dec 10, 2021. This sBLA was based on data from the pivotal phase III KEYNOTE-564study,which showed that Keytruda given after surgery led to a statistically significant and clinically meaningful improvement in disease-free survival (DFS) compared to placebo in such patients.

At present,Keytruda is approved in combination with Pfizer’s PFE Inlyta (axitinib) for the first-line treatment of patients with advanced RCC. Keytruda is being evaluated across 20 studies for RCC.

The second sBLA is seeking approval for Keytruda asasingle agent for certain patients with microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) advanced endometrial carcinoma. FDA’s decision on this sBLA is expected on Mar 28, 2022. The sBLA is based on data from two cohorts of KEYNOTE-158 study. In endometrial carcinoma, Keytruda was granted accelerated approval by the FDA in 2019 in combination with partner Eisai’s Lenvima for treating endometrial carcinoma that is not MSI-H/dMMR in patients who have disease progression following prior systemic therapy and are not candidates for curative surgery or radiation. The accelerated approval was later converted to full approval in July 2021.

Merck’s stock has declined 8.1% this year so far against an increase of 14.8% for the industry.

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Keytruda is a key top-line driver for Merck as it is approved for the treatment of many cancers globally. The drug generated sales of $4.18 billion in the second quarter of 2021, up 20% (excluding Fx impact) year over year.

Keytruda is continuously growing and expanding into new indications and markets globally. In fact, the Keytruda development program is also progressing well and the drug is being studied for more than 30 types of cancer in more than 1550 studies, including more than 1100 combination studies. Merck has collaborated with several companies including Amgen AMGN, Glaxo GSK and Pfizer separately, for the evaluation of Keytruda in combination with other regimens.

Undoubtedly, Keytruda has strong growth prospects based on increased utilization, approval for new indications and expectation of additional approvals worldwide. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, it can also be argued that the company is excessively dependent on the drug and should look for ways to diversify its product lineup.

Merck currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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