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The Zacks Analyst Blog Highlights: Merck, Design, Roche and AbbVie

Zacks Equity Research
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For Immediate Release

Chicago, IL – February 25, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include:Merck MRK, Design Corp. IMDZ, Roche RHHBY and AbbVie ABBV.   

Here are highlights from Tuesday’s Analyst Blog:

Pharma Stock Roundup: MRK, IMDZ, FDA Grants & More

This week Merck announced a definitive agreement to buy late-stage immunotherapy company Immune Design Corp. for approximately $300 million. Its PD-L1 inhibitor Keytruda was in focus as it gained FDA approval for adjuvant melanoma but failed in a pivotal liver cancer study. Meanwhile, the FDA granted priority review and accepted regulatory applications filed by Merck, Roche and AbbVie looking for approval of their respective pipeline candidates or line extensions of their marketed drugs.

Recap of the Week’s Most Important Headlines

Merck to Buy Immune Design; Keytruda in Focus: Continuing the trend of aggressive M&A activity by pharma giants this year, Merck announced its intention to buy small caner focused biotech, Immune Design for $5.85 per share in cash for an approximate value of $300 million. The offer price of $5.85 represents a premium of 312% on Immune Design’s closing price on Feb 20. Immune Design employs next-generation in vivo approaches to boost the body's immune system to fight disease. It is developing multiple candidates on its two proprietary technologies – ZVex and GLAAS. The primary candidate in its portfolio is G100, which is being evaluated in patients with merkel cell carcinoma (MCC), sarcoma and follicular non-Hodgkin lymphoma (NHL). The candidate enjoys Orphan Drug designation for NHL from the FDA. The acquisition is expected to beef up Merck’s already strong oncology franchise, which has been doing well, thanks to Keytruda.

Keytruda gained FDA approval as an adjuvant therapy for the treatment of patients with high-risk stage III melanoma. The approval in the adjuvant setting will help Merck to gain access to a broader melanoma patient population in the United States. Please note that this is the first approval in the United States for Keytruda in the adjuvant setting. Keytruda was approved for adjuvant melanoma in the EU in December last year.

However, Keytruda plus best supportive care failed to show statistical significant improvement in the co-primary endpoints of overall survival (OS) and progression-free survival (PFS) in a pivotal phase III study (KEYNOTE-240) evaluating it for the second line treatment of advanced hepatocellular carcinoma (HCC), the most common type of liver cancer.

FDA Grants Priority Review to Several Candidates: The FDA accepted regulatory applications and granted priority review to several pipeline candidates this week, in line with its efforts to expedite the approval of drugs.

A supplemental biologics license application (sBLA) looking for approval of Keytruda in combination with Pfizer’s Inlyta for the first-line treatment of advanced or metastatic renal cell carcinoma (RCC), the most common type of kidney cancer was granted priority review by the FDA. With the FDA granting priority review, a decision is expected on Jun 20, 2019. The sBLA filing is based on data from the pivotal phase III KEYNOTE-426 study as well as supporting data from an early stage study - KEYNOTE-035.

Another sBLA looking for approval of Keytruda monotherapy for the third-line treatment of advanced small cell lung cancer (SCLC) was also granted priority review by the FDA.  The FDA’s decision is expected on Jun 17, 2019. The sBLA filing was based on data from the SCLC cohorts of the phase II KEYNOTE-158 and phase Ib KEYNOTE-028 studies.

The FDA also granted priority review to AbbVie’s new drug application (NDA) looking for approval of its investigational oral JAK1-selective inhibitor, upadacitinib for the treatment of adults with moderate-to-severe rheumatoid arthritis (RA). With the FDA granting priority review, a decision is expected in the third quarter of 2019. A similar application is also under review in the EU. The regulatory filings are based on the SELECT phase III program, which evaluated more than 4,000 patients with RA. Please note that AbbVie used a priority review voucher to expedite review of the upadacitinib NDA. Upadacitinib is being evaluated in several multiple immune-mediated diseases.

The FDA granted priority review to two of Roche’s candidates, polatuzumab vedotin for previously treated diffuse large B-cell lymphoma (DLBCL), an aggressive form of lymphoma and its personalized medicine entrectinib for a range of hard-to-treat and rare NTRK fusion-positive tumors. FDA decision on both the products is expected in August.

Pfizer/Lilly’s Tanezumab Succeeds in Chronic Low Back Pain Study: Pfizer and partner Lilly announced positive top-line data from a phase III study evaluating their key pipeline candidate tanezumab in patients with chronic low back pain. The data showed that treatment with tanezumab 10 mg dose led to a statistically significant improvement in pain — the primary endpoint — compared to placebo at 16 weeks. However, for the 5 mg dose, though numerical improvement in pain was observed, the results were not statistically significant. Tanezumab is also being evaluated in studies in osteoarthritis (OA) pain and cancer pain (due to bone metastases). The companies so far have reported positive data from two studies in OA pain.

Pfizer also gained approval for Zirabev, its biosimilar version of Roche’s cancer drug Avastin for several types of cancer. This is Pfizer’s second oncology biosimilar to be approved in Europe, the first being biosimilar of Roche’s another cancer drug, Herceptin. Meanwhile, Zirabev is also under review in the United States along with biosimilar versions of Rituxan and Herceptin with FDA decisions on all expected in 2019.

Novo Nordisk Gets FDA Nod for New Haemophilia A Medicine: Novo Nordisk gained FDA approval for turoctocog alfa pegol, N8-GP for routine prophylaxis to reduce bleeding episodes in adults and children with haemophilia A. The product will be marketed by the trade name of Esperoct. However, the company cannot launch Esperoct before 2020 due to some third-party IP agreements.

The NYSE ARCA Pharmaceutical Index rose 1% in the last four trading sessions.

Large Cap Pharmaceuticals Industry 5YR % Return

In the last four trading sessions, while Lilly recorded the highest gain of 1.6%, Bristol-Myers declined the most (1.4%).

In the past six months, Lilly has been the biggest gainer (17.1%) while Bristol-Myers declined the most (16.6%).

(See the last pharma stock roundup here: Q4 Earnings at MRK, LLY, CHMP Nod for Several Drugs)

What's Next in the Pharma World?

Watch out for pipeline and regulatory updates next week.

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