Merck oncology drug wins ‘breakthrough’ classification by US regulators
28 Oct 2014
Merck, the second-biggest US drug maker, beat analyst earnings estimates and said it won a "breakthrough" designation from regulators that would allow it to bring its most promising oncology drug to lung-cancer patients faster.
Its third-quarter net income was down to $895 million, or 31 cents a share, from $1.12 billion, a year earlier, according to the company.
Keytruda, the drug maker's new cancer medicine, gained approval for use in melanoma last month and according to the company 900 patients are being treated with it since then.
Bloomberg reported Tony Butler, an analyst at Guggenheim Securities as saying, demand for Keytruda looked strong and obviously the breakthrough designation would be a huge positive for Merck going forward. He added, the company was doing a great job on the oncology front.
Merck had cut jobs and revamped its research operations to focus on its cancer pipeline.
Keytruda, its flagship new medicine, forms part of a new generation of oncology treatments that use the body's own immune system to attack and destroy tumours.
Meanwhile, Reuters reported cost cuts allowed Merck to beat third-quarter earnings forecasts despite disappointing sales of Gardasil cervical cancer vaccine and other big products that hurt its shares.
Company sales declined 4 per cent to $10.56 billion, below Wall Street expectations of $10.67 billion. Gardasil sales retreated 11 per cent to $590 million due to lower purchases by US government programmes.
Sales of arthritis treatment Remicade increased 5 per cent to $604 million, in a marked slowdown from the 17-per cent growth clocked in the prior quarter, amid competition in Europe from cheaper "biosimilar" versions of the medicine.
Also sales of HIV treatment Isentress were down 3 per cent to $412 million, due to increasing competition and reduced purchases by wholesalers.
According to BMO Capital Markets analyst Alex Arfaei, the foundation with the core franchises was weakening, as Merck pushed ahead with development of promising new treatments for cancer.
The company, earlier this month sold its consumer care business to Germany's Bayer AG in a $14.2 billion transaction.
Some analysts have called on the company to sell off other businesses, including older drugs that had lost US patent protection and were being marketed in emerging markets.
