By Toni Clarke
Jan 13 Shares of Merck & Co Inc rose as
much as 6.5 percent Monday after it filed the first part of an
application to market its experimental drug, MK-3475, for
advanced melanoma, putting the treatment on track to become the
first in a new class of promising cancer drugs to reach the
The application was filed earlier than investors had
expected and ups the ante in a race between Merck and
Bristol-Myers Squibb Co for dominance of a class of drugs
known as anti-PD-1 inhibitors that are expected to generate
billions of dollars in peak sales.
Merck's drug is designed to treat patients with advanced
melanoma who have previously been treated with Bristol-Myers'
melanoma drug Yervoy. The company is also testing the drug in
other cancers, including lung and renal cancer.
Bristol is testing its own PD-1 drug nivolumab in a variety
of cancers, with lung cancer likely to be one of the first to
"This is probably one of the most important classes of new
drug," said Damien Conover, an analyst at Morningstar, who
forecasts peak sales for Merck's drug, including multiple cancer
indications, of $3 billion. He forecasts peak sales for
Bristol's drug of $6 billion.
The drugs are designed to restore the natural ability of the
immune system to recognize and target cancer cells.
While Bristol has more clinical trials and data to show for
nivolumab, Merck's move in filing for MK-3475 early "is a way to
fight Bristol by getting out ahead of them," Conover said.
Merck said it expects to complete its application in the
first half of this year. Under a rolling application, completed
portions of the package may be submitted and reviewed by the
Food and Drug Administration on an ongoing basis.
Jeffrey Holford, an analyst at Jefferies, said in a research
note that the future of PD-1 development could focus on
combination regimens. He said it is too early to decide on a
winner in the PD-1 space, though he said Merck's drug "does
appear to have the best overall profile as a monotherapy."
Merck also benefited from other news on Monday.
The company said it is pursuing strategic options for its
animal health and consumer businesses and expects to complete
any action it takes this year. It previously said it was looking
at options for separating the businesses but the company's
statement reinforces the likelihood something will in fact
Separately, a preliminary review of Merck's experimental
blood clot-preventing drug vorapaxar by the U.S. Food and Drug
Administration found clinical trial data to be "robustly
positive" and recommended the drug be approved in patients who
have previously suffered a heart attack.
Merck's shares rose 5.7 percent to $52.72 in afternoon
trading on the New York Stock Exchange. Earlier in the day, they
rose as high as $53.10.