Merck KGaA's lung cancer drugs show promise in early-stage trials

[May 17, 2018] By Ludwig Burger

FRANKFURT (Reuters) - Germany's Merck KGaA said two of its experimental oncology drugs showed early signs of promise in certain lung cancer patients, potentially helping efforts to find drug-industry partners to share further development costs.

Merck, which has a promising drug pipeline for the first time in several years, is looking for partners for experimental treatments as an expected decline in operating profit this year forces it to find new ways to fund pharmaceutical development.

The family-controlled company late on Wednesday released some initial data from early- and mid-stage trials, giving a 3.5 percent boost to the share price after the open on Thursday.

A bifunctional fusion protein known as M7824, which combines two immunotherapy mechanisms, led to tumor shrinkage in 40.7 percent of patients in a small study group suffering from non-small cell lung cancer (NSCLC).

Those patients, being tested in the first of what are typically three trial stages, had tumors with at least some level of PD-L1, a protein that helps the cancer evade an immune system response.

In lung cancer patients where PD-L1 was at a level of at least 80 percent, the rate of tumor shrinkage was 71.4 percent.

"Merck will not have a problem finding a partner with this data set," said Bernstein analyst Wimal Kapadia, adding that competing immunotherapies have shown a percentage of patients that respond to treatment of 15-20 percent.

The stock was the second-biggest gainer on the STOXX Europe 600 Health Care index <0#.SXDP>.

In another study, cancer drug tepotinib was associated with partial tumor shrinkage in 9 out of 15 trial participants, according to an interim analysis of an ongoing trial in the second of typically three stages of testing on humans.

Patients in that trial are suffering from NSCLC that is driven by a certain type of genetic mutation.

"It is early data but investors will struggle to ignore the potential, particularly given the lack of expectations on both assets," said Bernstein's Kapadia.

Globally, lung cancer is the biggest killer of all cancer types but drugmakers have resorted to targeting small subcategories defined by genetic vulnerabilities that new drugs can attack.

More details will be presented at the annual conference of the American Society of Clinical Oncology (ASCO) in Chicago in early June.

(Reporting by Ludwig Burger; Editing by Mark Potter/Keith Weir)

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