Merck KGaA, a prominent pharmaceutical company, has suffered a setback in its quest to develop a groundbreaking multiple sclerosis (MS) drug. The company’s experimental drug, evobrutinib, failed to meet its primary goal in late-stage trials, dealing a blow to Merck’s growth aspirations. The news caused a significant drop in the company’s shares, with analysts expressing surprise and disappointment.
Evobrutinib was expected to outperform Sanofi’s Aubagio, a leading MS drug, in reducing relapse rates. However, two Phase III trials showed that the drug did not demonstrate superior efficacy. This outcome is crucial for Merck, as it was considered the frontrunner among four major pharmaceutical companies seeking to develop targeted MS drugs known as Bruton’s tyrosine kinase inhibitors.
The focus of the evobrutinib trials was the relapsing forms of MS, which affect approximately 2.8 million people worldwide. The drug was projected to generate annual peak sales exceeding $2 billion, according to analysts. Consequently, Merck’s shares plunged 14% following the disappointing results.
While efficacy was a concern, the main apprehension regarding evobrutinib was its anticipated side effects. The drug’s successful launch was crucial for Merck to achieve its sales target of €25 billion by 2025. However, there were already potential setbacks due to a possible link between the drug and liver damage, a common concern within this drug category.
Merck’s medium-sized pharma unit has encountered several setbacks recently, including the failure of cancer drug bintrafusp alfa and the end of an alliance with GSK. Nevertheless, the company had previously signaled a potential return to revenue growth in the upcoming year.
Merck’s CEO, Belen Garijo, had expressed optimism about the potential sales of evobrutinib, even after the US FDA temporarily halted new patient enrollments in April due to lab results suggesting drug-induced liver injury. The liver damage concerns are not unique to Merck, as other companies like Roche and Sanofi have also faced similar issues with their BTK drug candidates for MS. On the other hand, Novartis reported no signs of liver damage in trials testing its BTK drug candidate.
Merck’s failed trials shed light on the challenges faced by pharmaceutical companies in developing effective MS drugs. The revenue prospects for Merck have been uncertain, particularly due to the potential side effects associated with BTK inhibitors. Despite the setback, the company still aims to generate €25 billion in sales by 2025, up from €22.2 billion in 2022.
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