UPDATED: Merck KGaA carves into MS R&D after a string of setbacks

After seeing its reputation as a leader in multiple sclerosis erode over recent years, Merck KGaA has decided to carve back the number of staffers working in preclinical R&D in the field. The German pharma confirmed the move in a statement to FierceBiotech this morning after we sent over several queries spurred by word of a restructuring that has permeated its research group in Massachusetts.

"We have recently made changes to our discovery efforts with the goal of optimally advancing all new immune-based therapies for MS and other immune diseases," noted a spokesperson for Merck KGaA's research group, Serono. "With that, a limited number of discovery positions have been impacted in our research organization. We are working to re-assign as many of those positions as possible in the organization as we drive all of our research efforts forward."

In a followup, the company declined to say just how many staffers are involved in the reorganization, though a spokesman did say the cutbacks are focused in their Billerica facility near Boston. Serono also has a center in Rockland, MA. The move comes after the German Merck whittled back key programs over the past year, retrenching after its oral program for cladribine foundered in 2012. Cladribine was snapped back by regulatory agencies after the company failed to come through with the late-stage data needed for an approval, spurring Merck KGaA to abandon the effort--an R&D snafu that helped inspire the start of a reorganization in the company that has persisted for three years.

The German pharma company punted ceralifimod (ONO-4641), the Ono Pharmaceutical-partnered MS drug, saying that it "does not meet Merck's threshold for continued investment." Plovamer acetate followed down the trail to the scrap heap, getting a low-key heave-ho last fall.

That move left Serono with a mid-stage program for ATX-MS-1467, a drug partnered with UK-based Apitope, along with an option on Tcelna, imilecleucel-T, a personalized T cell therapy for secondary progressive MS that was developed by Opexa Therapeutics ($OPXA). Serono paid only $5 million for that option with The Woodlands, TX-based biotech, which expects top-line data on a Phase IIb study in mid-2016. Opexa has a market cap of $20 million.

Merck KGaA, though, insists that there's been no retreat from its commitment on the MS field. In an initial statement to FierceBiotech late last week, the company highlighted its two clinical-stage deals, academic partnerships and its continuing research work related to Rebif. "Our company is dedicated to improving the lives of people living with MS globally, including in Rockland and Darmstadt," notes Merck Serono.

Merck KGaA has been steadily paring back certain segments of its pipeline in recent months, as its decision to drop a $625 million cancer deal with Symphogen underscored. The company had another high profile flop with its cancer vaccine, unlicensed from Oncothyreon and initially called Stimuvax when it first founded. Merck KGaA then tried to bring it back from the dead, lured by a subset analysis. The therapy was renamed tecemotide as it took it back into a late-stage study after the first Phase III failed. Last fall Merck KGaA dumped its two late-stage studies after a failure in Japan left little room for hope. 

That failure came as the company's R&D chief's position proved to be the entrance to a revolving door in the three years since Merck KGaA made the controversial decision to shutter its big Geneva R&D center and concentrate in Darmstadt and the Boston area. Hundreds of researchers were let go in the restructuring, with hundreds more relocating to other facilities.

Merck KGaA, though, has had some successes, most notably scoring a whopping $850 million upfront from Pfizer ($PFE) to partner on its preclinical immuno-oncology program. And there's also a big new focus on biosimilar development, making them a late entry into a field that has seen real progress in recent years. -- John Carroll (email | Twitter)

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