Shares of Germany’s Merck KGaA have seen a significant drop in value after its experimental drug, evobrutinib, failed to meet expectations in two late-stage trials involving patients with relapsing forms of multiple sclerosis.
As of 0927 GMT on Wednesday, Merck shares were trading at EUR140.10, a 13% decrease that brings the stock’s year-to-date loss to 23%. These declines have effectively erased the gains the company had made in recent weeks, following its late October forecast of a return to sales growth next year.
Merck announced on Tuesday that the multiple sclerosis drug did not demonstrate enough efficacy in reducing annualized relapse rates when compared to Aubagio, an oral drug for the same disease owned by Sanofi. Consequently, the drug did not achieve the primary goal of the trials.
However, Merck emphasized that the overall safety and tolerability of evobrutinib remained consistent with previous test results.
The company intends to conduct a thorough evaluation of the most recent data and collaborate with investigators to determine how best to present and publish the trial results.
According to analysts, this setback could cast doubt over a new class of multiple sclerosis drugs that inhibit the Bruton tyrosine kinase protein.
Negative Implications for Similar Assets in Multiple Sclerosis Treatment
The recent results of a clinical trial conducted by Merck have raised concerns among analysts about the potential negative implications for similar assets being developed by competitors in the field of multiple sclerosis (MS) treatment. According to a research note from Jefferies analysts, pharmaceutical giants Sanofi, Roche Holding, and Novartis could face challenges in their respective MS treatment programs.
As news of the trial results broke, shares in Roche and Sanofi experienced a decline of 1% and 0.8% respectively, while Novartis saw a rise of 1.3% due to the approval of a different drug in the United States. However, the long-term impact on these companies’ MS treatment programs remains to be seen as data from Sanofi’s tolebrutinib, Roche’s fenebrutinib, and Novartis’s remibrutinib is expected to become available in mid-2024, 2025, and 2026 respectively, as stated by Citi analysts in their research note.
Merck, on the other hand, is unlikely to continue its development efforts for evobrutinib due to the trial’s data. Citi analysts, who had forecasted peak sales of 2.1 billion euros ($2.27 billion) for the drug in 2035, revealed that discussions with the company indicated a shift in its future focus. Investors will now shift their attention to Merck’s xevinapant oncology drug, currently in phase 3 trials. This drug has the potential to revolutionize the treatment paradigm for head and neck cancer, according to the Citi analysts.
The outcome of the Merck trial will undoubtedly have significant repercussions not only for the continued development of evobrutinib but also for the competitive landscape of MS treatments overall. The industry will keep a close watch on the forthcoming data from Sanofi, Roche, and Novartis, as the results could shape the future of MS treatment strategies.
