Pharma Stock Roundup: MRK Buys IMDZ, FDA Grants Priority Review To Some Candidates
Zacks Investment Research | Feb 21, 2019 09:04PM ET
This week Merck (NYSE:MRK) announced a definitive agreement to buy late-stage immunotherapy company Immune Design Corp. (NASDAQ:IMDZ) for approximately $300 million. Its PD-L1 inhibitor Keytruda was in focus as it gained FDA approval for adjuvant melanoma but failed in a pivotal liver cancer study. Meanwhile, the FDA granted priority review and accepted regulatory applications filed by Merck, Roche (OTC:RHHBY) and AbbVie (NYSE:ABBV) looking for approval of their respective pipeline candidates or line extensions of their marketed drugs.
Recap of the Week’s Most Important Headlines
Merck to Buy Immune Design; Keytruda in Focus: Continuing the trend of aggressive M&A activity by pharma giants this year, Merck announced its intention to buy small caner focused biotech, Immune Design for $5.85 per share in cash for an approximate value of $300 million. The offer price of $5.85 represents a premium of 312% on Immune Design’s closing price on Feb 20. Immune Design employs next-generation in vivo approaches to boost the body's immune system to fight disease. It is developing multiple candidates on its two proprietary technologies – ZVex and GLAAS. The primary candidate in its portfolio is G100, which is being evaluated in patients with merkel cell carcinoma (MCC), sarcoma and follicular non-Hodgkin lymphoma (NHL). The candidate enjoys Orphan Drug designation for NHL from the FDA. The acquisition is expected to beef up Merck’s already strong oncology franchise, which has been doing well, thanks to Keytruda.
Keytruda gained FDA approval as an adjuvant therapy for the treatment of patients with high-risk stage III melanoma. The approval in the adjuvant setting will help Merck to gain access to a broader melanoma patient population in the United States. Please note that this is the first approval in the United States for Keytruda in the adjuvant setting. Keytruda was approved for adjuvant melanoma in the EU in December last year.
However, Keytruda plus best supportive care failed to show statistical significant improvement in the co-primary endpoints of overall survival (OS) and progression-free survival (PFS) in a pivotal phase III study (FDA approval for turoctocog alfa pegol , N8-GP for routine prophylaxis to reduce bleeding episodes in adults and children with haemophilia A. The product will be marketed by the trade name of Esperoct. However, the company cannot launch Esperoct before 2020 due to some third-party IP agreements.
The NYSE ARCA Pharmaceutical Index rose 1% in the last four trading sessions.
Large Cap Pharmaceuticals Industry 5YR % Return
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Large Cap Pharmaceuticals Industry 5YR % Return
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Here is how the seven major stocks performed in the last four trading sessions:
In the last four trading sessions, while Lilly recorded the highest gain of 1.6%, Bristol-Myers declined the most (1.4%).
In the past six months, Lilly has been the biggest gainer (17.1%) while Bristol-Myers declined the most (16.6%).
(See the last pharma stock roundup here: Zacks Investment Research
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