Biotech Values

[DewDiligence]

Erbitux fails phase-3 trial in stomach cancer; prospects in NSCLC considered dim:

http://www.bloomberg.com/news/2012-07-05/merck-kgaa-says-erbitux-fails-in-stomach-cancer-trial.html

The results are the second disappointment this year for Erbitux. The company said May 9 the drug failed to show a benefit for stage-three colon cancer patients when given with chemotherapy [#msg-75395360]…

… “These disappointing results remove a potential upside to Merck [KGaA]’s 2014 guidance,” said Richard Vosser, an analyst at JPMorgan Chase & Co. in London who has an underweight rating on Merck stock. “We now see limited growth for Erbitux going forward.”

…Patients in the trial, dubbed EXPAND, had inoperable cancer of the stomach or gastro-esophageal junction and hadn’t received prior chemotherapy or radiation, Merck said. They got Erbitux along with cisplatin, a standard chemotherapy, and the capecitabine [Xeloda] cancer drug.

…Merck got 855 million euros in Erbitux sales last year, making it the company’s second-biggest-selling product after Rebif for multiple sclerosis. It’s approved for colorectal cancer as well as head and neck tumors… Bristol-Myers Squibb Co. (BMY) and Eli Lilly & Co. (LLY) market the drug in the U.S. and Canada, while Merck promotes it and sells it elsewhere.

… Merck has applied to sell the drug for lung cancer in the European Union. The chances of Merck winning approval in lung cancer are “essentially zero,” Martin Voegtli, an analyst at Kepler Capital Markets, wrote in a report today. In February, the company said chances of approval were less than 50 percent after a committee of the European Medicines Agency sent the company questions about the application.

The bottom line is that Erbitux is no longer considered a growing blockbuster, but rather is a second-tier drug whose best days are probably behind it. BMY hardly ever talks about it anymore, and LLY doesn’t say much either.