Merck sees potential in Peloton 

Peloton Therapeutics’ approach to fighting kidney tumours has apparently convinced Merck & Co, which is to pay $1.05bn for the company on the back of relatively little clinical data.


The flotation process can sometimes persuade larger suitors to make a move on their prey before life gets more complicated, and so it has proved with Peloton Therapeutics. Merck & Co swooped in ahead of an IPO that looked likely to value the private US biotech at around $850m, offering $1.05bn up front for the company. 

Phase II data on Peloton’s lead project, an oral HIF-2α inhibitor called PT2977, are available in only 55 patients, so the drug developer was already looking like an expensive bet for investors considering jumping in at the IPO. Merck will now shoulder this risk alone, though the recent approval of Keytruda in renal cell carcinoma probably helps explain why the pharma giant considered it worth taking.

Peloton is primarily focused on the transcription factor HIF-2α (hypoxia-inducible factor-2α), which is involved in regulating the body’s response to low oxygen. The company claims to be the first to hit HIF-2α with a small molecule, and the potential for oral delivery of any viable project was probably a big selling point. 

Aberrant activation of HIF-2α is known to be a key driver of a large proportion of renal cell carcinomas (RCCs), while the underlying biology is essentially the same in an inherited condition called von Hippel-Lindau (VHL) disease, the sufferers of which frequently develop renal cell tumours. Peloton’s clinical work is most advanced in these two settings; as a rare condition VHL offers a faster route to market, though orphan designation has yet to be won from regulators.

Evidence so far

A phase II trial in VHL is fully recruited – 60 subjects have been enrolled – and data are expected in the first half of next year. The study is single arm, and measures overall response rate as the primary endpoint; a spectacular outcome will be needed to give PT2977 any chance of speedy approval. 

Results in RCC offer some evidence of activity for PT2977, although the data are still very early. An early cut of data from a phase I/II trial, in 55 patients with heavily pretreated metastatic disease, showed a 24% confirmed partial response rate while 54% of patients had stable disease.

Peloton had planned to push into a phase III monotherapy trial in this setting in the second half of this year. This is a typically bullish development plan for a small biotech, and it would not be surprising to see Merck & Co put the brakes on somewhat.  

To move into earlier settings in RCC a combination strategy will be required, and trials of PT2977 plus Keytruda are surely on the horizon. The checkpoint inhibitor recently won US approval in first-line renal cell carcinoma on the back of highly competitive data, so the buyout of Peloton can also be seen as a move by Merck to stay ahead of the game in this cancer (Asco-GU 2019 – checkpoint blockers might not be created equal after all, February 20, 2019). 

Blocking move?

Other clinical work is going on with PT2977, in glioblastoma, for example; according to the company activation of HIF-2α is also implicated in this tumour type. Peloton has also talked up the prospect of other diseases being driven by activation of HIF-2α – pulmonary arterial hypertension, for example – and, though much of this can be considered pre-IPO fluffing, the biological potential of this pathway no doubt piqued Merck’s interest.

But it was surely the potential in RCC that drove the deal value here; as well as Merck, Bristol-Myers Squibb, Pfizer and Merck KGaA are all fighting for a share of this market with their respective checkpoint inhibitors.

The Peloton purchase price not only reflects the potential in PT2977. It also shows the cost of keeping the competition at bay. 

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