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| Merck KGaA's Belén Garijo |
Fresh from writing off one of its top late-stage programs, Merck KGaA stepped up with a revised comeback plan today, detailing plans to invest about $500 million in a late-stage effort to develop new biosimilars while scouting for a major-league partner to come in on its PD-L1 immuno-oncology program. And the company pointed to its current lineup of three star players in the pipeline, including one that has already posted a clinical failure.
Merck dumped its Phase III studies for the controversial cancer vaccine tecemotide (Stimuvax) some days ago, clearing the stage for a more upbeat self-assessment today. The German pharma, which has been struggling to fix R&D since the failure of cladribine several years ago, said it would invest €380 million ($494 million) in its experimental biosimilars. Merck KGaA had already noted a budget of €100 million for biosimilars work this year, adding today that it will spend another €280 million in 2015 and 2016 as it ramps up a more ambitious late-stage development effort.
In a new executive shuffle, Merck KGaA also announced that Stefan Oschmann was promoted to deputy CEO and vice chairman of the executive board, while Belén Garijo was bumped up to the executive board, taking charge of the pharma business. The company says that it also has more deals in the works.
"Existing partnerships with India's Dr. Reddy's and Brazil's Bionovis will be expanded by another, yet undisclosed in-licensing agreement for a late-stage biosimilar, initially for smaller emerging markets," the Darmstadt-based company said in a release. "Between 2015 and 2016, Merck KGaA plans to initiate between two and five Phase III clinical trials."
Typically, the mid- to large-size biopharma companies don't discuss specific timelines on prospective deals. But faced with some skepticism after repeated setbacks in the clinic, Merck KGaA broke from tradition to outline plans for a deal on its immuno-oncology program for an early-stage anti-PD-L1 program.
Oschmann noted that "we are currently in advanced discussions with major oncology players and aim to reach an agreement by year-end."
Merck KGaA would like to break into the exclusive ranks of the leaders in the field, a group dominated by the U.S. Merck ($MRK) (a different company), Bristol-Myers Squibb ($BMY) and more recently AstraZeneca ($AZN).
First, though, it will have to make good on long-standing promises to make real progress on the R&D side of the business. Merck KGaA execs have repeatedly promised to execute a string of licensing deals and buyouts, with little to actually show for it. Now it's focusing on three key programs.
"The roadmap to becoming a successful mid-sized biopharma player has been clearly defined. Given the growth initiatives we discussed today plus our promising pipeline candidates such as anti PD-L1, atacicept and TH-302, we are well-positioned to deliver sustainable success," Garijo noted. "Together with the existing business and related initiatives, our current R&D focus in the fields of immuno-oncology, immunology and oncology will drive our division's growth from 2016 and beyond."
That's not a lot to go on. The cancer program for TH-302 was in-licensed from Threshold last year, while the autoimmune drug atacicept failed a Phase II for MS back in 2009, after ZymoGenetics abandoned its stake in the drug a year earlier.
- here's the release (PDF)