Biotech Values

[DewDiligence]

FDA Declines to Approve Gardasil for Women 27-45

[This age group is important to MRK from a commercial standpoint for the silly reason that younger adult women don’t see a doctor nearly as often as middle-aged women and hence there is no good distribution channel for reaching them. Gardasil is currently approved in the US for women aged 9-26.]

http://www.reuters.com/article/marketsNews/idINN0928197520090109

›Fri Jan 9, 2009 12:53pm EST
By Lewis Krauskopf and Ransdell Pierson

NEW YORK, Jan 9 (Reuters) - U.S. health regulators have again withheld approval for the use of Merck & Co Inc's Gardasil cervical cancer vaccine by women aged 27 to 45, asking for longer-term clinical data, the drugmaker said on Friday.

The U.S. Food and Drug Administration recommended Merck submit data when a 48-month study on a test group has been completed. The agency also withheld approval in June on Merck's initial application that was based on data collected through an average of 24 months.

Merck shares fell nearly 3 percent in midday trading.

Gardasil, one of Merck's most successful newer products, was approved in 2006 for preventing cervical cancer and genital warts in females between the ages of 9 and 26. It works by preventing infection with the sexually transmitted human papillomavirus (HPV), which causes cervical cancer.

"Gardasil's efficacy drops sharply once females have been exposed to HPV and this is probably the genesis of the problem with the older female population that Merck has been pushing for in this new application," Sanford Bernstein analyst Tim Anderson said in a research note.

Moreover, because effectiveness is naturally lower in older females, Merck could have difficulty convincing insurers to cover Gardasil in that group should it be approved for them, Anderson added.

The FDA letter does not affect the use of the drug in the approved age group, or Merck's recently filed application to expand use to males, the company said. By preventing infection among males, the hope is they would not be able to spread the virus to females through sexual contact.

Anderson expressed uncertainty about the FDA's eventual decision on Gardasil's use in males and about its sales potential in that population.

Merck on Friday also stood by its 2009 sales and earnings targets. It said it would update other elements of its forecast in a Feb. 3 earnings conference call. In December, the company forecast Gardasil sales of $1.4 billion to $1.6 billion for 2009.

Global sales of the vaccine fell 4 percent to $401 million in the third quarter. Many girls and women in the approved age group have already taken the vaccine and it is now facing competition overseas from GlaxoSmithKline Plc's Cervarix.‹