Merck KGaA suffers major blow as MS drug fails in late-stage trials
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[December 06, 2023]
By Ludwig Burger
FRANKFURT (Reuters) -Merck KGaA's experimental multiple sclerosis (MS)
drug missed the primary goal in highly anticipated late-stage trials,
dealing a major blow to the German company's growth ambitions and
hitting its shares.
In two Phase III trials, the compound known as evobrutinib failed to
beat Sanofi's established Aubagio in reducing MS relapse rates, Merck
said in a statement late on Tuesday.
Merck was seen as ahead of Sanofi, Novartis and Roche in a four-way race
to develop more targeted MS drugs in a class known as Bruton’s tyrosine
kinase (BTK) inhibitors.
Merck said an estimated 2.8 million people worldwide have MS and that
the relapsing forms of the disease, which were the focus of the
evobrutinib trials, are the most common.
Investors have been kept on edge over revenue prospects because of a
possible link to liver damage from the drug category, which is designed
to more selectively block the cells that drive the harmful autoimmune
reaction behind MS.
Still, analysts have cited annual peak sales estimates for Merck's drug
of well above $2 billion on average.
![](http://archives.lincolndailynews.com/2023/Dec/06/images/ads/current/napa_sda_HFH_2023.png)
The group's shares plunged 14% to their lowest in five weeks on
Wednesday, with JP Morgan analysts saying it was an unexpected
disappointment because side effects, not efficacy, had been the main
concern.
"We had assumed that the trials would be successful and the product
would get to market (outside of the United States," the analysts said in
a note.
After weak demand hit Merck's specialty materials businesses, analysts
have said a successful launch of evobrutinib was key to the diversified
group reaching its goal of generating 25 billion euros ($27 billion) in
sales by 2025, up from 22.2 billion in 2022.
CEO Belen Garijo said as recently as October that the MS drug could
reach annual sales over $1 billion.
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![](../images/120623PIX/health33.jpg)
A logo of drugs and chemicals group Merck KGaA is pictured in
Darmstadt, Germany January 28, 2016. REUTERS/Ralph Orlowski/File
Photo
![](http://archives.lincolndailynews.com/2023/Dec/06/images/ads/current/graue_lda_23ENCLAVE_120423.jpg) That was even after U.S. regulators
in April had paused enrolling new patients into an evobrutinib
trial. At the time, the company said the Food and Drug
Administration had cited lab results suggesting drug-induced liver
injury, but the affected patients had no symptoms.
Similarly, Roche subsidiary Genentech said last month that the FDA
had stopped new patient enrolment in a trial of its BTK inhibitor
against MS, fenebrutinib, citing asymptomatic liver injury shown in
lab readings.
Sanofi had run into similar problems with its BTK drug candidate
tolebrutinib. Novartis said in April that no signs of liver damage
had been seen in trials testing its BTK drug candidate remibrutinib.
For Merck's medium-sized pharma unit, the failed trials marks
another major development setback after cancer drug hopeful
bintrafusp alfa fell short in a 2021 trial, triggering the end of an
alliance with GSK.
The diversified group flagged last month that full-year operating
earnings would likely be in the lower half of its target range on
weak demand for specialty materials that are used to make biotech
drugs and semiconductors.
The maker of pharmaceuticals, lab gear and specialty chemicals
previously raised the prospect of returning to revenue growth next
year.
($1 = 0.9263 euros)
(Reporting by Ludwig BurgerEditing by Bill Berkrot, Josie Kao and
Louise Heavens)
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