Merck & Co’s chunky €110m ($143.3m) up-front payment to lock up a late-stage cytomegalovirus treatment could be another canny move for the New Jersey group that has quietly amassed one of the more impressive pipelines in big pharma.
While no forecast exists so far for the antiviral developed by the privately held German firm AiCuris, positive phase II results reported in February should provide some sign of its promise. An orphan drug designation and a focus on immunosuppressed blood precursor cell transplant patients will do nothing to restrain those hopes, although confirmation remains another two years away.
The deal secures the phase II letermovir and AiCuris’s other drugs targeting human cytomegalovirus in a total package potentially worth €442.5m. Also known as AIC246, letermovir uses a novel mechanism that would represent a departure from other drugs to treat the infection; these principally rely on viral DNA polymerase as a target, while letermovir inhibits the viral terminase, a protein responsible for packaging viral DNA into a protein shell that enables cell entry.
Cytomegalovirus is a common infection from the herpes family, but is dangerous primarily in babies and immunocompromised adults. No treatments to date act to prevent the virus from attacking organs and causing symptoms such as visual impairment, pneumonia and hepatitis, and drugs to treat the condition have drawbacks such as renal side effects, anaemia and viral resistance.
A phase II trial tested letermovir at three doses against placebo in 133 patients undergoing bone marrow transplants to treat leukaemia, lymphoma and other haematological cancers who also tested positive for cytomegalovirus. The study found that significantly fewer patients taking the 120mg and 240mg doses experienced detectable levels of viral replication or end-organ disease during 84 days of treatment.
Having received orphan drug designation from US and European regulators and having a tightly defined population in oncology, letermovir appears to be the sort of molecule that big pharma is looking for these days as it migrates away from the old primary-care blockbuster model, although the pricing landscape is changing (Orphan drugs can be a route to success, but pricing is a future problem, October 16, 2012).
Merck estimates 50,000 bone marrow and organ transplant surgeries a year worldwide, although the number receiving the blood precursor cell transplants is a subset of this population. Based on the $20,000 price paid for 200 days of treatment of valganciclovir for kidney transplant patients, ISI Group analyst Mark Schoenebaum estimates a potential market of $500m-$1bn a year.
A clearer view of the product will likely emerge next year as letermovir enters phase III development and Merck analysts start to take a harder look at it. There is no doubt that, while Merck is at an earnings plateau, the future is looking decidedly better once sales start to grow in 2014 and beyond.
Right now, the group has the third-best pipeline by forecast revenue in 2018 with $4.6bn, bettering even the vaunted Roche by about $1bn, according to EvaluatePharma data. Of course pipeline failure will undoubtedly whittle away at that number some, especially with such high-risk projects as a hepatitis C protease inhibitor and lipid-lowering product, anacetrapib, listed with significant forecasts.
However, its advanced-stage pipeline is healthy, and adding an antiviral, one of Merck’s strengths, in an orphan indication will be another arrow in the quiver.
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