(Repeats to detach from text of earlier story)
* Says will no longer seek approval for the pill
* Plans to stop selling cladribine in Russia and Australia
* Shares down 1.8 percent
(Adds detail, background)
FRANKFURT, June 22 Merck KGaA said
U.S. drug regulators' concerns about the risks of its cladribine
pill will put an end to any development or marketing plans for
the multiple sclerosis (MS) treatment.
Merck also said on Wednesday it planned to withdraw
cladribine from markets in Australia and Russia where it has
been approved and is available under the name Movectro.
Its shares were down 1.8 percent, underperforming a 0.5
percent lower European healthcare sector index .
"Merck believes that data from ongoing clinical trials are
very unlikely to address the (U.S. Food and Drug
Administration's) requirements," it said, adding new trials
would not justify the costs.
"We have decided ... to focus resources on other projects
bringing benefit to patients with multiple sclerosis," said
Stefan Oschmann, who joined German group Merck in January from
U.S. namesake peer Merck & Co .
His predecessor Elmar Schnee left following a string of
setbacks in drug development.
In March, the U.S. Food and Drug Administration asked Merck,
which traces its roots to a 17th century pharmacy, to either
provide additional analyses of study results it had submitted,
or to carry out new trials.
Due to some cases of cancer that emerged during a trial, the
drug had been rejected in September by regulators in the
European Union, which would have been its largest market.
That kept most analysts sceptical about the drug's prospects
of getting FDA approval.
"The FDA feedback was consistent with the feedback
previously received from the European Medicines Agency," the
EXPECTING THE WORST
In the wake of the EU rebuff last autumn, most analysts had
eliminated any future revenue from the pill -- some of which
amounted to far more than 1 billion euros ($1.4 billion) -- from
their valuation models.
Merck's shares, which fell in the months following the EU's
dismissive statements on cladribine, had been recovering due to
the group's strong earnings from liquid crystals for display
screens this year.
"While this is not good news it was widely expected that the
company would no longer seek global approval for cladribine
following the negative FDA decision last fall. We do not
currently price in revenues from cladribine," said Silvia Quandt
Research analyst Stefan Muehlbauer.
Merck's cladribine had initially been regarded as a
formidable contender in the race with Novartis to
bring the first oral treatment against MS to a major market.
The Swiss drugs major won U.S. approval for its Gilenya pill
in September and is out to win a sizable chunk of the more than
$10 billion global market of established injectable MS
These are offered by Biogen Idec , Bayer AG
and Teva . Merck and Novartis themselves are
also selling MS injections.
Merck said the withdrawal would result in a one-off charge
of 20 million euros in the second quarter after it had already
written off the book value of the business of about 50 million
at the end of 2010.
(Reporting by Ludwig Burger; Editing by Dan Lalor)
($1 = 0.6971 euro)