By Gregory Zuckerman and Jared S. Hopkins
As the new coronavirus spread in mid-February, Merck & Co.'s
executives and scientists took sides in a high-stakes debate.
Some were eager to develop a vaccine, according to people
familiar with the matter, arguing that Merck, a leader in global
vaccines, was perfectly placed to focus on the emerging virus.
They were overruled by more senior executives, despite their
concerns the virus would turn into a world-wide pandemic. Chief
Executive Ken Frazier and R&D chief Roger Perlmutter argued
that vaccines usually take years to develop and they worried the
effort would divert resources from thriving areas, including cancer
research, the people say. Dr. Perlmutter said in an interview he
was concerned about betting on an unproven vaccine technology.
A month later, as the virus was declared a pandemic and the need
for a vaccine became more apparent, Merck began searching for a
partner. Contacting University of Oxford about its vaccine, Dr.
Perlmutter proposed a deal but was rebuffed by the school's key
scientists. Merck investigated other potential partnerships and
announced a Covid-19 vaccine program in late May. By then, several
rivals had developed vaccines and begun testing them on healthy
volunteers.
The slower start has left Merck playing catch-up in the most
important vaccine chase in modern history, a surprising position
for one of the world's leading vaccine makers. At the same time,
the debate inside Merck underscores the challenge facing all the
vaccine makers, despite the excitement and hype surrounding the
leading candidates.
Merck, which didn't dispute there was disagreement among its
executives, says they appreciated the threat posed by the
virus.
"Since the beginning of the pandemic, Merck has moved with
urgency" to address it, a spokeswoman said, noting the company has
invested $800 million so far on various efforts.
Though top brass weren't yet convinced a vaccine was a top
priority, Merck scientists began mining the company's library of
basic chemical compounds as potential Covid-19 drugs or vaccines in
late January, sending about 1,000 to external researchers for
testing a few weeks later, the spokeswoman said. Meanwhile,
internal research began.
In subsequent months, Merck formed a partnership with a
scientific organization and made an acquisition. It is now working
on two vaccine candidates, along with an antiviral treatment for
people who fall ill from Covid-19. Last month, Merck began testing
its first vaccine in humans and results could come by November. It
hopes to produce a single-dose vaccine, perhaps one that can be
administered orally. That could make a vaccine easier to scale up
for mass vaccinations than the shots some rivals are testing, some
of which require more than one dose.
More than 40 vaccines are now being tested in humans, according
to the World Health Organization, nearly all of which are ahead of
Merck. Pfizer Inc., Moderna Inc. and AstraZeneca PLC are among
those conducting late-stage trials of their vaccines. Moderna and
Pfizer's shots use a gene-based technology that has never been
approved for use.
Merck executives, some of whom have been skeptical of unproven
technologies some rivals are using in their vaccines, have noted in
public that their own Covid-19 vaccines rely on proven technologies
currently used to fight other diseases.
Merck could yet emerge with a successful vaccine. It was a
laggard in the emerging field of cancer immunotherapy before
becoming the market leader, thanks to its top-selling product
Keytruda. And many experts believe Covid-19 vaccines will be needed
for years to come, and that different ones will be needed for
different populations, such as the elderly.
"My guess is if you're already late you might as well go all in
on being the easiest one to give and vaccinate as many people as
possible," says Daina Graybosch, a pharmaceutical analyst at SVB
Leerink LLC.
In January and February, as news of the new coronavirus emerged,
Merck executives gathered at the company's West Point, Pa.,
research and manufacturing site and elsewhere to discuss potential
treatments and vaccines. The team was split and some wanted to
focus on a vaccine.
Merck's slow start rankled some inside the company, the people
say. Executives including Michael Nally, the company's chief
marketing officer, and John Markels, president of global vaccines,
were among those eager to develop a Covid-19 vaccine, the people
say.
"It's surprising they didn't jump on this right away," says Rod
Wong, managing partner of New York health-care investment firm RTW
Investments LP, who doesn't have a position in the stock. He noted
that the companies furthest ahead received more government funding
than Merck, and if these companies are successful, "the bar will be
raised" for later vaccines to become widely adopted.
Merck shares are down 12% this year, compared with a drop of
1.3% for the S&P 500 pharmaceuticals industry group.
In an interview, Dr. Perlmutter, who recently announced his
retirement, acknowledged there was disagreement on how to proceed
with a vaccine. The disagreement, he says, was tied to the idea of
working with other companies, "particularly other companies that
were moving very rapidly with untested platforms."
The company decided to pursue two so-called replicating
vaccines, or those that employ a weakened virus that multiplies, an
approach that could produce a more durable immune response than
other technologies, Dr. Perlmutter says. These proven technologies
take longer to develop than the types of vaccines rivals are
working on, he says.
Seeing results from rivals' vaccines, Dr. Perlmutter says,
"gives us some understanding of where our vaccine fits in the
broader profile."
Merck would have been near the top on any list of drugmakers
expected to lead the charge against the coronavirus before the
pandemic began. Merck pioneered vaccines that have become staples
around the world, including the first to prevent mumps, chickenpox,
rubella and shingles.
Of the seven vaccines approved in the U.S. the past 25 years,
four were brought forward by Merck. Its most recent vaccine,
Ervebo, prevents Ebola, a highly contagious and deadly disease.
Gardasil, its human papillomavirus shot, had $3.7 billion in sales
last year.
The experience and expertise give the company perspective about
how quickly an effective vaccine could be brought to market even
with an all-hands effort triggered by a pandemic, vaccine experts
say.
As companies have raced to develop vaccines against Covid-19 and
shared ambitious timelines for bringing their shots to market,
Merck and Mr. Frazier, the CEO, have sounded notes of caution. In
an interview in May, he wouldn't commit to Merck's vaccine being
ready within 12 to 18 months, noting that large clinical trials are
needed to prove safety and efficacy.
"Those take time, there's no two ways about it," he said.
In July, Mr. Frazier told an online audience hosted by Harvard
University that those raising hopes for a widely available vaccine
by the end of this year are doing "a grave disservice to the
public."
Mr. Frazier isn't the only CEO of a major drugmaker expressing
caution. Vas Narasimhan, the CEO of Swiss giant Novartis AG, has
said an effective vaccine may not become broadly available until
the end of 2021.
"I don't buy that," says Mark Davis, director of the Stanford
Institute for Immunology, Transplantation and Infection, who is
part of a Covid-19 vaccine working group formed by the National
Institutes of Health. "They're sniping from the sidelines."
Several rivals are further along than Merck after embracing
innovative vaccine technologies. Johnson and Johnson's one-shot
vaccine, which uses a relatively new but approved technology, is in
late-stage testing. The company recently halted its trials of the
shot, because a study volunteer had an unexplained illness.
Other rivals have jumped ahead in their vaccine efforts by
forming new partnerships. After the University of Oxford
researchers rebuffed Merck, AstraZeneca formed a partnership with
the scientists, who moved quickly by advancing a vaccine technology
previously shown to be safe in humans in a different virus. Pfizer
tapped an existing relationship with BioNTech SE, a pioneer in a
new kind of gene-based vaccine.
The Pfizer and Moderna vaccines, each of which uses a genetic
material known as messenger RNA, or mRNA, to produce an immune
response capable of protecting from the coronavirus, have shown
promise in early-phase studies and might have final-stage trial
results in coming months, Dr. Davis says.
In the early 1990s, it was Merck scientists who were among the
first to try to generate immune response from DNA vaccines but they
dropped the effort. In 2016, Merck partnered with Moderna on cancer
research. Yet Dr. Perlmutter and others at Merck have been less
enthused about the mRNA approach to infectious diseases.
"We knew that an mRNA vaccine would be faster, that's for sure,"
Dr. Perlmutter said in the interview, but Merck preferred to focus
on proven technologies.
In mid-March, when Merck decided to pursue its own vaccine, it
reached out to the scientific-research organization IAVI, whose
experimental vaccine uses technology that is the basis for Merck's
Ebola virus vaccine. Human testing for this Covid-19 vaccine should
begin this month.
Mark Feinberg, IAVI's CEO and a former Merck executive, said the
partnership is essentially an "insurance policy" in case the
vaccines that are further along in the development process are
ineffective for some or all people.
"In the likely case that several types of vaccines are needed to
address different populations and different circumstances, we'll be
in a position to offer another useful approach," he says.
Last month, Merck began an early-stage trial of its other
experimental Covid-19 vaccine. This one contains a weakened version
of the virus that causes measles, and aims to deliver coronavirus's
spike protein to the immune system, helping trigger an immune
response.
Merck's approach wins the backing of some acclaimed scientists
who note the company is using proven technology that can be scaled
up readily for manufacture.
"They've been there, they've done it," says William Haseltine, a
pioneering scientist of cancer and HIV drugs, and human genome
projects.
Write to Gregory Zuckerman at gregory.zuckerman@wsj.com and
GJared S. Hopkins at jared.hopkins@wsj.com
(END) Dow Jones Newswires
October 23, 2020 12:48 ET (16:48 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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