Merck CEO Rob Davis has business development on the mind as he builds the ‘pipeline of the future’ – Endpoints News

Merck CEO Rob Davis has business development on the mind as he builds the ‘pipeline of the future’ – Endpoints News

Does Merck have everything it needs for a successful pipeline? In short, no, CEO Rob Davis told investors and analysts on the company’s third-quarter call Thursday. But he has his eye on “a list of potential places to play” when it comes to M&A.

The CEO took a moment during the Q&A session to highlight Merck’s business development plans, which may or may not include Seagen after talks about an acquisition reportedly stalled in August over price. Davis stayed brief on specifics, vaguely admitting that “our pressure on business development has not changed.”

“We frankly continue to see a portfolio of opportunities that we’re interested in,” Davis said. “It is our priority, because we continue to believe that the best thing we can do for long-term value creation is to invest in the sustainability of our business, which invests in the pipeline of the future.”

But as CFO Caroline Litchfield added, “We will only act when science and value align.”

Caroline Litchfield

The news comes as sales of Keytruda surged to more than $5.4 billion last quarter, up 20% from the third quarter of 2021. Merck is doubling down on the immuno-oncology blockbuster — which faces a patent cliff in 2028 — and plunked down $250 million earlier this month to promote a Keytruda combo along with one of Moderna’s personalized cancer shots. President of Merck Research Laboratories, Dean Li, has previously expressed hope that the drug will guide Merck in staying the leader in oncology by 2025, and the Moderna partnership and ongoing study of a subcutaneous version should help push it into earlier treatment lines, he said on the Q3 call.

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Keytruda’s numbers more than made up for Lagevrio sales, which plunged from $1.2 billion in Q2 to just $436 million last quarter. Far fewer doses of Merck’s Covid-19 treatment — about 4 million — have been administered compared to Pfizer’s Paxlovid, according to the HHS tracker. Of the approximately 2.5 million Lagevrio doses delivered, just under 759,000 have been administered, compared to 8.3 million Paxlovid doses delivered and 5.4 million administered.

Meanwhile, Davis launched the launch of its 15-valent pneumococcal conjugate vaccine Vaxneuvance in the pediatric setting after securing approval in June. The vaccine was first approved for adults in July 2021, but by then Pfizer had topped it with its own 20-strain shot.

Dean Li

Asked how Merck plans to contend with competitors such as Pfizer, Li said: “Our view is that more serotypes are not always better and one size does not fit all … It’s the right medicine, or in this case the right vaccine, for the right patient at the right time.”

Davis added on the call that Merck is continuing a phase III study of its 21-valent candidate, V116, in adults — “an important component of our population-specific approach to invasive pneumococcal disease and part of our broader effort to provide strong protection to both infants and adults,” he said.

Sales of Pneumovax 23, Merck’s pneumococcal polysaccharide vaccine (PPSV) approved in 1982, fell 53% this quarter to $131 million, Merck reported, reflecting lower demand as the market shifts to newer vaccines. PPSV vaccines have performed poorly in younger children, prompting researchers to develop updated conjugate vaccines, such as Vaxneuvance and Pfizer’s Prevnar.

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Gardasil vaccine sales offset that loss, reaching $2.3 billion last quarter, up 15% driven by strong demand in China. While global immunization levels remain low, Merck said it has invested in manufacturing capacity to handle an expected increase in demand “now and in the long term.”

Overall, Merck brought in $15 billion last quarter, up 14% from last year. The company’s stock $MRK was up 2% on Thursday afternoon.

As Davis plans to take over the chairman role, succeeding former CEO Ken Frazier, he said the company has come a long way in the past year.

“Do I think we have everything we need? No, he said. “But do I think we’ve made a lot of progress in a year? I actually think we have. And that gives me confidence that we will continue to make progress.”

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