Just a few days after Peter Guenter joined Merck KGaA as its healthcare CEO at the beginning of 2021, the 22-year Sanofi veteran found himself picking up the pieces from a major setback: Then-GlaxoSmithKline-partnered bispecific antibody bintrafusp alfa failed to outdo Merck & Co.’s PD-1 king Keytruda in a high-profile head-to-head trial in non-small cell lung cancer.
Now a year has passed, and Guenter still bemoans the loss of the tremendous reward it could have collected had the drug beaten Keytruda. The failure—and a following one in biliary tract cancer—triggered some serious soul-searching at the German drugmaker.
GSK has now walked away from the deal, and Guenter has come away with an important lesson learned: what he called “focused leadership.”
“You have to think about Merck Healthcare as the largest of the mid-sized companies,” with annual sales at around 7 billion euros ($8 billion), Guenter said in a recent interview with Fierce Biotech. It’s not in the $10 billion-plus Big Pharma club, nor is it near the other mid-sized players.
“That means we have to be focused, we can’t spread ourselves too thin, and we have to capitalize on the strongholds that we have,” he said.
Those may include multiple sclerosis (MS), where the German Merck’s pharma unit, known as EMD Serono in the U.S., sells Mavenclad. It could also mean head and neck and colorectal cancers, where Erbitux plays, or bladder cancer, in which Pfizer-partnered Bavencio is making inroads.
An existing footprint in a disease area could de-risk the clinical development and improve the probability of commercial success once a new product is launched, Guenter argued.
From a clinical development perspective, Merck will control its “risk-taking appetite” and refrain from jumping into multiple parallel late-stage development programs—like it did with bintrafusp alfa—before having at least one positive readout, he added.
But while focused leadership offers an “overall framework,” Merck isn’t ruling out potential expansions into new territories if its R&D engine returns an asset with strong data in a field with high unmet medical need.
“Great products create great franchises,” Guenter said. “If you have a great product, you can attract all the leaders of the space, all the medical communities would want to work with you.”
Guenter raised the example of an investigational TLR7/8 inhibitor called enpatoran, which the company plans to advance into phase 2 in lupus in the first half of this year. Merck currently doesn’t have any product in rheumatology, but if the data are “that darn good,” the company might as well create a new front for it, Guenter said.
Alternatively, Merck could partner up with an experienced player in a co-development, co-commercialization deal, or simply license it out and reap milestones and sales royalties.
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Focused leadership also applies to dealmaking. Shortly into Guenter’s tenure, Merck put down 188 million euros upfront and laid out up to 710 million euros in biobucks to in-license Debiopharm’s late-stage head and neck cancer treatment xevinapant. Toward the end of the year, the German company bought out Chord Therapeutics to gain control of cladribine, a candidate for generalized myasthenia gravis and neuromyelitis optica spectrum disorder, in a deal the firm labeled a “focused expansion” in neuroinflammatory diseases alongside its existing MS portfolio.
Changing the multiple sclerosis paradigm
In the crowded MS market, Mavenclad has been able to carve out a niche of its own. Because of a more favorable label and earlier time to market, Mavenclad is doing better in Europe with shares in the high efficacy market ranging from above 10% to 20% across the big five economies, Guenter said. In the U.S., Mavenclad has a market share of about 5%. Early data showing Mavenclad doesn’t decrease antibody production from COVID-19 vaccines also helped strengthen its market position against anti-CD20 antibodies and S1P modulators, he added.
While the ongoing pandemic has put a damper on the entire MS market, Merck still believes Mavenclad could eventually reach 1 billion euros to 1.4 billion euros in peak sales.
Following through on the focused leadership commitment, Merck is in late-stage testing of a promising MS candidate, which Guenter said could set “a totally new treatment paradigm.”
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The drug, called evobrutinib, is a brain-penetrant BTK inhibitor. Unlike successful CD20 antibodies such as Roche’s Ocrevus, BTK inhibitors don’t chronically deplete all B cells. Instead of systematically suppressing the immune system, BTK inhibitors could go into the central nervous system to remove unwanted B cells that are causing inflammation. Marketed BTK inhibitors like AbbVie and Johnson & Johnson’s Imbruvica are approved for blood cancers and can be too toxic for MS, so new options are needed.
Merck isn’t the only one pursuing the BTK inhibition idea for MS. Guenter’s former employer, Sanofi, through a $3.7 billion acquisition of Principia Biopharma in 2020, gained a pipeline of BTK inhibitors, led by tolebrutinib, which is neck and neck with evobrutinib in terms of phase 3 development progress. Hoping to consolidate its MS lead with Ocrevus, Roche is testing its BTK drug fenebrutinib in phase 3.
“In order to change a treatment paradigm, it’s good not to be alone,” Guenter said.
Guenter acknowledged that the first-to-market race between evobrutinib and tolebrutinib is a close call. But, as evobrutinib has completed phase 3 patient enrollment one month ahead of schedule, “the probability that we will be first to market is relatively high,” he said.
As for efficacy, phase 2 data showed patients with relapsing forms of MS taking evobrutinib had a lower annualized relapse rate over 48 weeks to 0.11 at the 75-mg twice-daily dose, which is being used in two phase 3 trials dubbed EVOLUTION RMS 1 and 2. Sanofi’s phase 2 found tolebrutinib, at daily dosing of 60 mg, could reduce the annualized relapse rate to 0.17 over 48 weeks.
These are, of course, early data, and cross-trial comparisons pose various problems.
“You have to see what the data will tell you,” Guenter said. “Will this be a very homogeneous class, or will there be significant differences?”