Merck’s odanacatib caution throws Amgen a bone

Merck & Co’s surprising decision to delay filing its osteoporosis project odanacatib is a blow to what is the company’s most valuable R&D asset, and threatens to hand a major coup to its rival Amgen.

The move suggests that Merck wants to quantify the safety issues raised in odanacatib’s pivotal study, and will see the company waiting for extension data before filing. Merck’s market cap lost $3.7bn on the news on Friday, effectively wiping out the gains seen when the pivotal study was stopped early for efficacy last year. As odanacatib now enters a blackout period Merck will find it hard to rebuild the lost momentum.

Zero to hero

Success in odanacatib’s 16,000-patient pivotal study had turned the project from an interesting asset into a potential blockbuster (Merck breaks big news with odanacatib success, July 12, 2012). An interim analysis had found odanacatib to have a favourable risk-benefit profile in post-menopausal women, although the study’s data-monitoring committee cautioned that some safety issues remained, and while Merck played these down it said it would monitor them.

The company says it has now received data from that pivotal study, but will not publish these or give any more information on safety or efficacy until after database lock – something that will occur only after completing an extension phase that it now wants to include in the US filing.

This extension phase comprises more than 8,000 women who are continuing to be treated in a double-blind manner, and in the interests of data integrity Merck wants to maintain this blinding before publishing the pivotal data. While earlier it had said odanacatib would be filed in early 2013, this has now been put back to next year, to include the extension data.

“This begs the question, are they worried about something on the safety side or do they think the FDA will worry about something on the safety side?” Mark Schoenebaum, an analyst at ISI Group, speculated on a call. “This clearly is a setback. I’ve got to take my probability of success down on odanacatib.”

Success probability, as well as the speed of odanacatib’s launch, are key to Merck’s attempts to rebuild its osteoporosis franchise after the 2008 patent loss for its blockbuster bisphosphonate, Fosamax. A year ago odanacatib’s NPV stood at $1.8bn, according to consensus estimates compiled by EvaluatePharma, but in the wake of the pivotal trial’s early termination analysts’ expectations soared.

Consensus now puts 2018 sales at $1.4bn – the most for any current Merck pipeline asset and its fifth best-selling drug in that year – resulting in an NPV of $3.5bn. Analysts will no doubt rein this in as they speculate about the relevance of the safety signals and the added time a delayed launch will hand Amgen.

This is because in odanacatib’s path stand two Amgen antibodies – Prolia, which has so far failed to make significant headway three years since launch, and romosozumab, currently in phase III.

In a note on Friday UBS wrote that odanacatib’s delay was “likely safety-related, increasing risk to the approvability”. This in turn could imply a more favourable uptake for Prolia, and a higher share for romosozumab of a market that has been shaken up by the arrival of generic bisphosphonates.

Safety is paramount

The opportunity for newcomers revolves around safety. Bisphosphonates, which accelerate the death of bone-resorbing osteoclasts, have been associated with osteonecrosis of the jaw, something also seen with Prolia, which inhibits osteoclasts’ full development.

Odanacatib’s promise centres around the convenience of once-weekly oral dosing and a mechanism of action – inhibiting the osteoclast enzyme cathepsin K – that could avoid the side effects of bisphosphonate use. However, safety worries have dogged this class also: two other cathepsin K inhibitors, Novartis’s balicatib and GlaxoSmithKline’s relacatib – were dropped after being linked to skin-related problems.

Given the favourable interim analysis of odanacatib’s pivotal trial, investors can probably assume an absence of these sorts of issues, but they will now worry that other problems might arise in the long-term extension study.

Of course, Merck might just be playing it ultra-safe, but Amgen will be sure to exploit its window of opportunity.

To contact the writer of this story email Jacob Plieth in London at[email protected]or follow@JacobEPVantageon Twitter

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