Wednesday, March 21, 2012

I Said A Year And A Half Ago That Merck's Ridaforolimus "Was Never Going To Be A Blockbuster"

As ABC is reporting, an FDA panel voted 13-1 against approving ridaforolimus, saying the side-effects -- seen in about 60 percent of studied patients -- outweighed the benefits, for this candidate conceived as maintenence therapy, for a relatively rare form of cancer.

Here's that St. Patrick's Day 2011 post of mine (with even earlier background, here).
From, then -- a bit:

. . . .The panel saw less potential for Merck's ridaforolimus, which the company acquired through Ariad Pharmaceuticals Inc. The group voted 13-1 against the drug, saying its significant side effects -- which affected 60 percent of patients -- outweighed its benefits.

Merck & Co. Inc. of Whitehouse Station, N.J., submitted the drug as a maintenance therapy, meaning it would be used to help repress sarcoma of the bone and tissue in patients whose cancer is already in remission. Since such patients are healthier than patients with active disease, panelists said they wanted to see a more dramatic benefit to justify putting patients on a drug with major side effects. The FDA has only approved a handful of cancer drugs for maintenance use.

Company trials showed no survival benefit and a meager seven-week delay in disease progression compared with patients not taking the drug. . . .

So it goes.


Anonymous said...

Based on the stock movement today, basically neutral until Jim 'Mad Money' Cramer rated it a buy and gave it a slight boost. Do you think Wall Street also counted this out or are they hanging in for the dividend payment?

As the second drug to effectively be taken out of the pipeline in as many days it's hard to have a long position on Merck as far as I can tell.

Condor said...

All the "news-driven" price movement was in Ariad today (down, sharply).

This candidate (at Merck) -- by the best estimates of analysts -- would have only added something like $250 million a year after 2015, to Merck's about $50 billion in revenue.

So, about one-quarter of one percent of peak revenue went away, as to Merck. Thus, none of this matters much to Merck -- except if it turns out to reflect a broader lack of insight/poor judgement as to what might work, and what might not, in the Merck science team's management strategies.

I think Merck is fully valued whenever it trades around $38 on the NYSE (i.e., now).


Anonymous said...

As per usual, Condor's analysis is spot on. When a major component of Merck's strategy is to "divesify risk" by licensing-in external compounds, an investor should be concerned by Merck's recent inability to license-in any good late-stage compounds (i.e. Gaboxadol from Lundbeck = fail; Muraglitazaar from BMS = fail; Ridaforolimus from Ariad = fail; Vicriviroc from SP merger = fail; Vorapaxar from SP merger = fail; Vernakalant from Cardiome Pharma = fail.....) or useful technologies/platforms (i.e. Sirna, Glycofy, and Rossetta). Sad, especially given what a great company Merck once was.

Anonymous said...

Condor, I'm with you on all counts except for the analysis of the Ariad stock movement today. It was sharply down at the get go but closed up 0.22 after an options trader made some interesting moves.

There have been posts around the web that Merck bought the candidate from Ariad, absorbing most of the risk on this one, with Ariad only getting royalties. Not sure about the truth to that but Ariad has a leukemia drug showing a bit more promise that it holds all to themselves coming up for interim review about the same time the FDA will likely officially deny Rida.

Merck has made comments to continue the pursuits of Rida. Optimism abounds....

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Anonymous said...

off topic; Freddy's at it again!
Linked on over at Pharmalot.