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Merck KGaA Faces Significant Setback as Multiple Sclerosis Drug Falters in Advanced Trials

Merck KGaA’s (MRCG.DE) growth ambitions have taken a significant hit as its experimental multiple sclerosis (MS) drug, evobrutinib, fell short of its primary goal in eagerly awaited late-stage trials according to Reuters. The German company’s shares were also impacted by this development.

In a statement on Tuesday, Merck revealed that in two Phase III trials, evobrutinib failed to outperform Sanofi’s (SASY.PA) established Aubagio in reducing MS relapse rates.

Merck had been considered ahead of Sanofi (SASY.PA), Novartis (NOVN.S), and Roche (ROG.S) in a competitive race to develop more targeted MS drugs classified as Bruton’s tyrosine kinase (BTK) inhibitors.

According to Merck, approximately 2.8 million people worldwide suffer from MS, with relapsing forms of the disease being the focus of the evobrutinib trials.

Investors had been closely monitoring revenue prospects due to concerns about potential liver damage linked to the drug category, designed to selectively block cells driving the harmful autoimmune reaction behind MS.

Although analysts had estimated annual peak sales for Merck’s drug at well above $2 billion on average, the company’s shares plummeted by 14% to their lowest in five weeks on Wednesday. JP Morgan analysts noted that the disappointment was unexpected, as side effects, rather than efficacy, had been the primary concern.

The successful launch of evobrutinib was seen as crucial for Merck to achieve its goal of generating 25 billion euros ($27 billion) in sales by 2025, up from 22.2 billion in 2022, especially after weak demand affected Merck’s specialty materials businesses.

CEO Belen Garijo had expressed optimism in October, stating that the MS drug could achieve annual sales exceeding $1 billion. This confidence persisted despite a pause in enrolling new patients in an evobrutinib trial by U.S. regulators in April, citing lab results suggesting drug-induced liver injury.

Merck’s medium-sized pharma unit has faced previous setbacks, with the cancer drug bintrafusp alfa falling short in a 2021 trial, leading to the end of an alliance with GSK (GSK.L).

Last month, the diversified group indicated that full-year operating earnings would likely be in the lower half of its target range due to weak demand for specialty materials used in biotech drugs and semiconductors. Despite these challenges, Merck had previously raised the prospect of returning to revenue growth next year.


Joan David-Leonhard

Joan David Leonhard is a recent Pharm.D graduate with a strong passion for the pharmaceutical industry and a particular interest in pharmaceutical media and communication. Her brief internship experience includes roles in pharmacy where she built strong patient-pharmacist relationships and a pharmaceutical media internship where she actively contributed to drug information articles, blog posts, social media engagement, and various media projects.
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