Merck Stock Went Up as It Relied on a New Formulation of Keytruda to Avoid a Patent Cliff

Merck Stock

Merck Stock (NYSE:MRK)

According to a Reuters story from last Friday, Merck (NYSE:MRK) is preparing an easier-to-use version of its blockbuster cancer medication Keytruda to prolong its patent protection until at least 2040.

Keytruda, an IV infusion that employs the body’s immune system to combat cancer cells, helped Merck stock earn over $17 billion in revenue in 2021, an increase of around 20% year over year.

Even though the firm faces a patent cliff in 2028 when generic copies of Keytruda will be available, two subcutaneous versions of Keytruda that are now in development have the potential to assuage Wall Street’s concerns.

According to Caroline Litchfield, CFO of Merck, “we feel that subcutaneous formulation has the potential to be unique, non-obvious, and helpful,”, and so merit a new patent.

Merck’s medical officer Eliav Barr indicated that subcutaneous Keytruda will replace the IV version for most cancer patients. However, the previous formulation may still be used for those who take the treatment with chemotherapy or other intravenous drugs.

In principle, it might be used instead of Keytruda anywhere it is presently prescribed, Barr said.

Subcutaneous Keytruda may be protected by patents until at least 2040, says Tahir Amin, co-founder of the pharma patents monitor Initiative for Medicines, Access & Knowledge (I-MAK).

Amin said, “Keytruda is going to be the next Humira by all accounts,” referencing the rheumatoid arthritis medicine that remained a blockbuster drug for creator AbbVie (ABBV) for many years owing to a so-called patent thicket.

BMO Capital Market analyst Evan Seigerman said that private insurers in the US would choose a cheaper biosimilar infusion rather than a pricier branded medication. Despite this, the analyst believes that Merck (MRK) will keep 20% of Keytruda sales until 2030.

The Financial Times reported in October 2021 that Merck stock was looking toward potential merger and acquisition targets in light of the impending Keytruda patent cliff.

Featured Image: Unsplash @  Michaelvi

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