German Merck no longer the immuno-oncology underdog

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There are several reasons why Merck KGaA’s anti-PD-L1 antibody, MSB0010718C, was seen as a serious laggard in the immuno-oncology race, but with today’s $850m endorsement from none other than Pfizer the doubts have been swept away.

Still, Pfizer itself risked becoming an also-ran in this fast-moving space, so it clearly needed to do something fast. The Merck deal was apparently plan B after the bid for AstraZeneca, and Astra’s 2% fall this morning shows how unlikely the market thinks it is that Pfizer will reopen that can of worms.

For Merck this marks a turnaround from years of mediocre licensing deals and R&D failures, and could kick-start its US presence a decade after the German group took its first abortive steps in this direction. Under the deal Pfizer plans to investigate MSB0010718C as a single agent and in combination with in-house molecules.

$850m is a huge up-front payment for an asset that has barely entered phase II. Indeed, it appears to be bigger than any signing fee secured by a biotech firm in a licensing scenario, beating the $710m Celgene handed over earlier this year for Nogra Pharma’s Crohn’s disease project GED-0301.

All to play for

This disproves the notion that a handful of big names – Merck & Co, Bristol-Myers Squibb and Roche – had already seized all the early promise in PD-1/PD-L1 inhibition.

True, there had until recently been little to suggest that Merck KGaA could offer much here (For oncology deals, don’t forget the other Merck, June 19, 2014). A poster on MSB0010718C at Asco in May showed underwhelming signs of efficacy, and then nothing more was forthcoming at the Esmo meeting in September.

However, there turned out to have been a logical explanation. In a recent interview, Merck KGaA’s head of the immuno-oncology, Helen Sabzevari, stressed to EP Vantage that in the Asco dataset most patients had been treated for barely 12 weeks, and revealed that a larger analysis missed the deadline for submitting to Esmo.

As such it was only after a late September analyst meeting that the market took notice of '718C’s potential. Of particular interest were data in a 21-patient ovarian cancer cohort, showing 48% of patients reaching stable disease and 17% getting a partial response within 30 weeks of treatment start, though 13 had for some reason been taken off the drug.

It was particularly encouraging that the responses came despite 77% of patients having already failed at least three lines of therapy. Ms Sabzevari said her focus was on disease types in which competitors had generated limited data, such as gastric, metastatic breast, colorectal and Merkel cell cancers, in addition to ovarian.

She said a big pharma deal was being sought for similarly pragmatic reasons – Merck KGaA was simply too small to do MSB0010718C justice – and less than two months later a huge alliance has been struck with the biggest pharma company in the world.

Pfizer plans to start 20 new trials with '718C next year, including up to six registration studies. The companies will separately collaborate to advance Pfizer’s own anti-PD-1 MAb into the clinic; this is the first time the US firm has publicly revealed that it has an anti-PD-1 in the pipeline.

Pfizer is also to reimburse Merck KGaA for setting up a US oncology sales force – the German group has zero US presence at the moment, despite having attempted to set up a business there, EMD Pharmaceuticals, around 2001. The initial focus will be to co-promote Pfizer’s lung cancer drug Xalkori.

UBS analysts wrote this morning that Pfizer’s big bet was positive for the respective anti-PD-L1 approaches of Roche and AstraZeneca. The latter’s MEDI4736 (durvalumab) was one reason – tax breaks having been the most important one – behind Pfizer’s attempt to take over the UK firm this year.

Today’s development makes “a Pfizer return for AstraZeneca much less likely”, the analysts said. For better or worse, the UK group’s pipeline must now stand up on its own merits.

Current active studies of MSB0010718C
Status Design Trial ID
Phase I 590 pts, open-label expansion cohorts in several cancers NCT01772004
Phase II 84 pts with Merkel cell carcinoma NCT02155647
Phase I Safety trial in 38 Japanese pts NCT01943461

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com or follow @JacobEPVantage on Twitter

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