Research Setback

Drug by Germany's Merck Fails in Trial

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Bringing drugs to market is a difficult challenge.
  • Why it matters

    Why it matters

    • The German drug maker Merck needs to repair its research and development pipeline or suffer a long-term decline.
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  • Facts

    Facts

    • Potential cancer medication Evofosfamide has proven disappointing for the firm in a recent clinical study.
    • Merck’s former head of pharmaceutical research, Stefan Oschmann, is slated to become the company’s chief executive next year.
    • The company based in Darmstadt intends to make a push next year for its potential multiple-sclerosis medication Cladribin.
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The woes of Germany’s Merck group in bringing new drugs to the market continued Monday when the firm revealed disappointing results for clinical trials of a promising new cancer medication.

The drug, Evofosfamide, didn’t deliver the expected results in clinical trials for treatment of soft-tissue and pancreatic cancer, the Darmstadt-based company said. The drug won’t be developed further in those areas of treatment, it added.

Luciano Rossetti, the head of pharmaceutical research, announced that money budgeted for Evofosfamide will be invested in other development programs and drug candidates such as cancer-immunity medication Aveluma.

The German Merck group is unrelated to U.S. drug maker Merck. The companies were originally one but the United States seized the German companies U.S. assets as war reparations after World War II and the two evolved separately.

The German group had hoped to submit Evofosfamide for approval in 2016.

Merck had acquired the license for the drug’s active ingredient from U.S. maker Threshold Pharmaceuticals in 2012. The decision was made under leadership of then-pharmaceutical research chief Stefan Oschmann.

Mr. Oschmann is slated to become the German drug company’s chief executive next year.

Many pharmaceutical companies have struggled in drug research and development but few have had such a long dry spell as E. Merck.

Evofosfamide’s flop confirms again the weakness of the firm’s research pipeline. The company hasn’t brought a single drug based on its own research to market since the 1990s, and has failed with most in-house licensed products in recent years.

In 2016, however, the company intends to make a new push for a multiple-sclerosis medication, Cladribin, which failed to gain approval five years ago.

A new application in Europe will be submitted.

Many pharmaceutical companies have struggled in research and develoment but few have had such a long dry spell.

The company has pumped more than €12 billion into pharmaceutical research since 2000, but can’t point to a clear success. After the failure of Cladribin, it carried out a radical restructuring of its pharmaceutical division and made far-reaching changes in research and management.

Germany’s Merck considers its pipeline to be more solid and promising now. Chief Executive Karl-Ludwig Kley, who will turn things over to Mr. Oschmann in April, recently said he was confident the drug maker would overcome its long run of failures.

Merck, Restructured-01

 

Mr. Kley’s focus, however, is apparently less on Evofosfamide than on the potential cancer medication Avelumab, which the firm is developing with U.S. drug maker Pfizer. Avelumab is intended as a cancer-immunity agent, which will activate immune defenses against cancer cells.

The German partner has high expectations for the active ingredient, which is in a final test phase of treating lung cancer and is also being examined for its effect on other types of cancer. Pfizer is paying up to $2.8 billion for its participation in the project.

As for Evofosfamide, Mr. Kley recently described it as a “high-risk project.” Industry analysts also didn’t seem to have high hopes for it. The share price of development partner Threshold has been languishing for more than a year at $4 and has been under pressure in recent weeks. In reaction to the flop, shares of Germany’s Merck’s fell about 3 percent, but recovered later.

The company has reduced its dependency on the drug business through acquisitions such as laboratory provider Sigma-Aldrich.

But a developmental success would be important for the German firm’s health division, which recently posted sales of €6.5 billion. Its top drug products, multiple-sclerosis medication Rebif and cancer drug Erbitux, are under pressure from competitors.

Without new products in the research pipeline, the German drugmaker faces the threat of a long-term decline in the pharmaceutical business.

 

Siegried Hofmann is Handelsblatt’s chemical and pharmaceutical industries correspondent. To contact the author: hofmann@handelsblatt.com

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