|Kenneth Frazier, CEO of Merck|
Merck's R&D division has been hit with another setback. The pharma giant--which consistently spends more than $8 billion a year on drug research--announced in its fourth-quarter report that an expected regulatory submission for its osteoporosis drug odanacatib is being held back in order to gather more safety and efficacy data from a Phase III extension study.
Last summer, though, Merck ($MRK) said it was able to call the Phase III program an early success after getting a solid set of data ahead of schedule. Barclays liked that news so much, its analysts projected that the drug could hit $2.5 billion a year, which would be a big home run for R&D. Now, rather than filing in a few months, the submission will have to wait until 2014.
"As previously indicated," Merck stated, "the company has been conducting a blinded extension of the trial in approximately 8,200 women, which will provide additional safety and efficacy data. Merck now anticipates that it will file applications for approval of odanacatib in 2014 with additional data from the extension trial, rather than filing in the first half of 2013."
The news caused some heartburn among Merck loyalists, who have been eagerly anticipating some good news on the research front. Odanacatib is one of the biggest prospects in Merck's pipeline, even though some analysts have fretted that it will face some tough generic competition if approved. Merck's cholesterol drug Tredaptive recently failed a big study needed for a U.S. approval, forcing the company to yank the drug from Europe. The most recent data on Tredaptive not only failed to demonstrate efficacy, the outcome raised questions about a serious health threat. And there's been plenty of head shaking over Merck's continuing late-stage program for cholesterol drug anacetrapib, a CETP inhibitor that has been preceded by a pair of high-profile failures for other CETP inhibitors at Pfizer ($PFE) and Roche ($RHHBY) .
Merck's sleep drug Suvorexant is under regulatory review, but the sleep drug market has been contracting under the influence of generic Ambien, leaving some analysts skeptical about the potential upside even if an expected approval comes through. Bridion (sugammadex), its anesthesia-reversing drug obtained from Schering-Plough and the last of its top-five late-stage drugs, has been resubmitted. Merck says it expects five more regulatory filings this year, including a BLA just filed for a grass allergy immunotherapy tablet.
Merck CEO Kenneth Frazier was one of the top pharma CEOs to stand behind a big research budget at a time Pfizer was hacking away at its R&D budget. Without some blockbuster advances soon, that position may get harder and harder to hold.
Merck shares slipped this morning as generic competition to Singulair bit into revenue. More generic competition is looming, with patent losses slated to arrive later this year for the migraine drug Maxalt and Temodar for brain cancer.
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