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Merck Starts Late-Stage Study on Recently Acquired Ophthalmology Drug
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Merck (MRK - Free Report) announced that it started the phase IIb/III BRUNELLO study on Restoret (MK-3000), a novel investigational Wnt agonist antibody, to treat diabetic macular edema (DME).
This study will evaluate the safety and efficacy of two dose levels (high and low doses) of the drug compared with Roche’s (RHHBY - Free Report) Lucentis (ranibizumab) in patients with DME.
Restoret was added to Merck’s pipeline after it completed the acquisition of London-based private biotech EyeBio for around $1.3 billion in July. Following this buyout, EyeBio became a wholly-owned subsidiary of MRK.
This decision to advance Restoret is supported by data from the phase I/II AMARONE study, which evaluated the drug in DME and neovascular age-related macular degeneration (NVAMD) indications. In February, EyeBio reported first-in-human data from this study, which established proof of concept for Restoret with strong visual and anatomic outcomes. Data from the study showed that activating the Wnt pathway in the retina results in a reduction in vascular leakage. This was the first clinical evidence that validated the Wnt pathway in the eye.
Merck’s shares have moved up 6.2% year to date compared with the industry’s 27.6% rise.
Image Source: Zacks Investment Research
Market Potential in DME Space
DME is a serious retinal condition that occurs when damaged blood vessels leak into the retina. If left untreated, this leakage could lead to blindness.
Per Merck, around 750,000 people in the United States are impacted by DME. Management estimates this figure to risewith increasing cases of diabetes in the country.
Other Players in the Ophthalmology Space
The ophthalmology market is currently being dominated by large-cap pharma giants Regeneron (REGN - Free Report) and Roche, which market multiple drugs in this space.
Apart from Lucentis, Roche’s ophthalmology portfolio also includes Vabysmo. A major growth driver of sales for RHHBY, Vabysmo has been designed to block two pathways, Ang-2 and VEGF-A, which are linked to several vision-threatening retinal conditions. The drug is currently approved for treating three retinal diseases — DME, NVAMD and macular edema following retinal vein occlusion (RVO). Since the product launch in 2022, Vabysmo’s sales have been driven by strong demand across all regions, especially the United States. During first-half 2024, Roche generated CHF 1.8 billion from Vabysmo’s sales, up 93% over the year-ago period’s levels.
Vabysmo’s stellar performance put pressure on Regeneron’s blockbuster ophthalmology drug Eylea, which is also approved for multiple retinal indications, including DME, NVAMD and macular edema following RVO.
Eylea has been co-developed by Regeneron with Bayer AG (BAYRY - Free Report) . Regeneron records net product sales of Eylea in the United States and Bayer records net product sales of Eylea outside the country. Regeneron records its share of profits/losses in connection with ex-U.S. sales generated by Bayer.
To counter the decline in Eylea sales, Regeneron developed a higher dose of the drug, which is marketed under the brand name Eylea HD. The initial uptake of Eylea HD is encouraging as Eylea patients transition to the higher dose. During second-quarter 2024, total combined product sales for Eylea HD and Eylea were $1.53 billion, up 2.3% year over year, as declining Eylea sales are more than being offset by strong uptake for Eylea HD.
Our Take
Through EyeBio’s acquisition, Merck intends to re-enter the growing market for retinal therapies. Between 2013 and 2014, the company exited this market space after divesting its U.S. ophthalmology business to Akorn Pharmaceuticals and its Europe, Japan and Asia Pacific business to Santen Pharmaceutical.
Through the acquisition, we believe that Merck also intends to diversify its revenue base which has become highly dependent on Keytruda, its blockbuster anti-PD-1 therapy. The drug contributed around 45% to the company’s total revenues in first-half 2024. With concerns over Keytruda’s potential loss of exclusivity post-2028, the successful development and potential commercialization of Restoret could help MRK narrow down its dependence on a single product for growth.
Image: Bigstock
Merck Starts Late-Stage Study on Recently Acquired Ophthalmology Drug
Merck (MRK - Free Report) announced that it started the phase IIb/III BRUNELLO study on Restoret (MK-3000), a novel investigational Wnt agonist antibody, to treat diabetic macular edema (DME).
This study will evaluate the safety and efficacy of two dose levels (high and low doses) of the drug compared with Roche’s (RHHBY - Free Report) Lucentis (ranibizumab) in patients with DME.
Restoret was added to Merck’s pipeline after it completed the acquisition of London-based private biotech EyeBio for around $1.3 billion in July. Following this buyout, EyeBio became a wholly-owned subsidiary of MRK.
This decision to advance Restoret is supported by data from the phase I/II AMARONE study, which evaluated the drug in DME and neovascular age-related macular degeneration (NVAMD) indications. In February, EyeBio reported first-in-human data from this study, which established proof of concept for Restoret with strong visual and anatomic outcomes. Data from the study showed that activating the Wnt pathway in the retina results in a reduction in vascular leakage. This was the first clinical evidence that validated the Wnt pathway in the eye.
Merck’s shares have moved up 6.2% year to date compared with the industry’s 27.6% rise.
Image Source: Zacks Investment Research
Market Potential in DME Space
DME is a serious retinal condition that occurs when damaged blood vessels leak into the retina. If left untreated, this leakage could lead to blindness.
Per Merck, around 750,000 people in the United States are impacted by DME. Management estimates this figure to risewith increasing cases of diabetes in the country.
Other Players in the Ophthalmology Space
The ophthalmology market is currently being dominated by large-cap pharma giants Regeneron (REGN - Free Report) and Roche, which market multiple drugs in this space.
Apart from Lucentis, Roche’s ophthalmology portfolio also includes Vabysmo. A major growth driver of sales for RHHBY, Vabysmo has been designed to block two pathways, Ang-2 and VEGF-A, which are linked to several vision-threatening retinal conditions. The drug is currently approved for treating three retinal diseases — DME, NVAMD and macular edema following retinal vein occlusion (RVO). Since the product launch in 2022, Vabysmo’s sales have been driven by strong demand across all regions, especially the United States. During first-half 2024, Roche generated CHF 1.8 billion from Vabysmo’s sales, up 93% over the year-ago period’s levels.
Vabysmo’s stellar performance put pressure on Regeneron’s blockbuster ophthalmology drug Eylea, which is also approved for multiple retinal indications, including DME, NVAMD and macular edema following RVO.
Eylea has been co-developed by Regeneron with Bayer AG (BAYRY - Free Report) . Regeneron records net product sales of Eylea in the United States and Bayer records net product sales of Eylea outside the country. Regeneron records its share of profits/losses in connection with ex-U.S. sales generated by Bayer.
To counter the decline in Eylea sales, Regeneron developed a higher dose of the drug, which is marketed under the brand name Eylea HD. The initial uptake of Eylea HD is encouraging as Eylea patients transition to the higher dose. During second-quarter 2024, total combined product sales for Eylea HD and Eylea were $1.53 billion, up 2.3% year over year, as declining Eylea sales are more than being offset by strong uptake for Eylea HD.
Our Take
Through EyeBio’s acquisition, Merck intends to re-enter the growing market for retinal therapies. Between 2013 and 2014, the company exited this market space after divesting its U.S. ophthalmology business to Akorn Pharmaceuticals and its Europe, Japan and Asia Pacific business to Santen Pharmaceutical.
Through the acquisition, we believe that Merck also intends to diversify its revenue base which has become highly dependent on Keytruda, its blockbuster anti-PD-1 therapy. The drug contributed around 45% to the company’s total revenues in first-half 2024. With concerns over Keytruda’s potential loss of exclusivity post-2028, the successful development and potential commercialization of Restoret could help MRK narrow down its dependence on a single product for growth.
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