By Helena Smolak
Shares of Germany's Merck KGaA plunged after its experimental drug evobrutinib failed in two late-stage trials of patients with relapsing forms of multiple sclerosis.
At 0927 GMT on Wednesday, Merck shares traded 13% lower at EUR140.10, taking the stock's year-to-date loss to 23% and erasing gains made in recent weeks after the company in late October forecast a return to sales growth next year.
The German pharmaceutical-and-chemical group said late Tuesday that the multiple sclerosis drug didn't show strong enough efficacy in reducing annualized relapse rates compared with Aubagio, an oral drug for the disease owned by Sanofi. As a result, the drug didn't meet the primary goal of the trials, Merck said.
The overall safety and tolerability of the drug was consistent with previous test results, Merck said.
The company will complete a full evaluation of the recent data and will work with investigators on the future presentation and publication of the results, it said.
Analysts said Merck's trial setback could cast a cloud on a new class of multiple-sclerosis drugs that inhibit the Bruton tyrosine kinase protein.
The results could have negative implications for similar assets that peers Sanofi, Roche Holding and Novartis are developing as multiple sclerosis treatments, Jefferies analysts said in a research note.
Shares in Roche and Sanofi at 0924 GMT fell 1% and 0.8%, respectively, while Novartis traded up 1.3% following news of a U.S. approval for a different drug.
Data from Sanofi's tolebrutinib, Roche's fenebrutinib and Novartis's remibrutinib is due in mid-2024, 2025 and 2026, respectively, Citi analysts said in a research note.
Merck is now unlikely to continue development efforts for evobrutinib in light of the trials' data, the Citi analysts said, citing discussions with the company. Citi had forecast peak sales for the drug of 2.1 billion euros ($2.27 billion) in 2035.
Investors' focus on Merck's healthcare pipeline will now shift to its xevinapant oncology drug, which is in phase 3 trials and could have potential to change the treatment paradigm in head and neck cancer, the Citi analysts said.
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(END) Dow Jones Newswires