MKGAF Merck KGAA (PK)

Merck KGaA (MKGAF) recently announced the withdrawal of the marketing authorization application (MAA) to the European Medicines Agency (EMA) for Erbitux (cetuximab) as the European regulatory authorities had asked the company to furnish additional data.

Merck KGaA was looking to get Erbitux approved for an additional indication. The company was seeking European approval of the drug, combined with standard first-line platinum-based chemotherapy in patients suffering from advanced or metastatic non-small cell lung cancer (NSCLC) with high epidermal growth factor receptor (EGFR) expression.

We note Erbitux is currently approved and marketed in the US and EU for the treatment of patients with colorectal cancer and squamous cell carcinoma of the head and neck (SCCHN). The withdrawal of the MAA for the additional indication does not undermine the proven efficacy of the drug for the approved indication. 

Earlier, in July 2012, Merck KGaA announced that Erbitux failed to achieve its primary endpoint in the phase III EXPAND trial, conducted in patients with advanced gastric cancer. Results showed that Erbitux plus cisplatin and capecitabine failed to significantly increase progression-free survival (PFS) in patients suffering from advanced gastric cancer.

Erbitux was originally developed by ImClone LLC, which is now a wholly-owned subsidiary of Eli Lilly and Co. (LLY). Merck KGaA has the right to market Erbitux outside the US and Canada. The drug is jointly developed and marketed by Eli Lilly and Bristol-Myers Squibb Co. (BMY) in the US, Japan and Canada.

Meanwhile, Merck KGaA provided an update on its oncology candidate, TH-302. The company and partner Threshold Pharmaceuticals, Inc. (THLD) intend to commence a randomized phase III study on the candidate. The study will evaluate TH-302 as a first-line therapy in patients suffering from pancreatic cancer.

We remind investors that in February 2012, Merck KGaA presented encouraging data from an open-label phase IIb study which evaluated TH-302, in combination with Eli Lilly’s Gemzar, for treating patients suffering from advanced pancreatic cancer.

The study met its primary endpoint by achieving a 63% improvement in PFS in patients treated with TH-302 and Gemzar in comparison to Gemzar alone.

Our Recommendation

Merck KGaA currently carries a Zacks #2 Rank (Buy rating) in the short run.

 
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