Merck CEO Rob Davis has business development on the brain as he builds 'pipeline of the future'

2022-10-27

疫苗

Does Merck have everything it needs for a successful pipeline? In short, no, CEO Rob Davis told investors and analysts during the company’s Q3 call on Thursday. But he’s got his eye on “a list of potential places to play” when it comes to M&A. The chief executive took a moment during the Q&A session to highlight Merck’s business development plans, which may or may not include Seagen after talks of a buyout reportedly stalled back in August over price. Davis kept short on the details, vaguely admitting that “our urgency on business development has not changed.” “We continue to frankly see a portfolio of opportunities that we are interested in,” Davis said. “That is our priority, because we continue to believe the best thing we can do for long-term value creation is to invest in the sustainability of our business, which is investing in the pipeline of the future.” However, as CFO Caroline Litchfield added: “We will act only when science and value align.” The news comes as Keytruda sales surged past $5.4 billion last quarter, up 20% from Q3 2021. Merck is doubling down on the immuno-oncology blockbuster — which faces a patent cliff in 2028 — throwing down $250 million earlier this month to advance a Keytruda combo along with one of Moderna’s personalized cancer shots. Merck Research Laboratories president Dean Li has previously voiced hopes that the drug will guide Merck in becoming the leader in oncology by 2025, and the Moderna partnership and ongoing study of a subcutaneous version should help push it into earlier lines of therapy, he said on the Q3 call. Keytruda’s numbers more than made up for Lagevrio sales, which plummeted from $1.2 billion in Q2 to just $436 million last quarter. Far fewer doses of Merck’s Covid-19 treatment — about 4 million — have been administered compared to Pfizer’s Paxlovid, according to HHS’ tracker . Out of about 2.5 million Lagevrio doses delivered, just under 759,000 have been administered, versus 8.3 million Paxlovid doses delivered and 5.4 million administered. Meanwhile, Davis touted the launch of its 15-valent pneumococcal conjugate vaccine Vaxneuvance in the pediatric setting after securing approval this June. The vaccine was first approved for adults in July 2021, but by that time, Pfizer had beaten it to the punch with its own 20-strain shot. When asked how Merck plans to contend with competitors like Pfizer, Li said: “Our view is that more serotypes is not always better, and one size does not fit all … It’s the right medicine, or in this case the right vaccine, for the right patient at the right time.” Davis added during the call that Merck is progressing a Phase III trial of its 21-valent candidate, V116, in adults — “an important component of our population-specific approach to invasive pneumococcal disease and part of our broader efforts to provide strong protection to both infants and adults,” he said. Sales of Pneumovax 23, Merck’s pneumococcal polysaccharide vaccine (PPSV) approved in 1982, fell 53% this quarter to $131 million, Merck reported, reflecting lower demand as the market shifts to newer vaccines. PPSV vaccines have demonstrated poor performance in younger children, leading scientists to develop updated conjugate vaccines, such as Vaxneuvance and Pfizer’s Prevnar. Gardasil vaccine sales offset that loss, reaching $2.3 billion last quarter, up 15% driven by strong demand in China. While global immunization levels remain low, Merck said it has invested in manufacturing capacity to handle an expected boost in demand “now and over the long term.” Overall, Merck raked in $15 billion last quarter, up 14% from last year. The company’s stock $MRK was up 2% on Thursday afternoon. As Davis plans to take over the chairman role, succeeding former CEO Ken Frazier, he said the company has come a long way in the last year. “Do I think we have everything we need? No,” he said. “But do I think we’ve made great progress in a year? I actually think we have. And it gives me confidence that we’re going to continue to drive progress.”