Another Merck Pipeline Setback

Another Pipeline Setback For Merck

This morning Merck & Co. (MRK - Analyst Report) announced disappointing top-line results of its 2,033-patients phase III PROTECT study of rolofylline (MK-7418), under development for acute heart failure. The candidate failed to meet both the primary (improve symptoms of acute heart failure) and secondary (reduce the risk of death or cardiovascular or renal re-hospitalization 60 days after treatment and reduce the incidence of persistent kidney impairment) endpoints.

Acute heart failure is the leading cause of hospitalizations of patients over 65, is associated with a high rate of mortality and currently has few treatment options. Rolofylline showed encouraging efficacy including improvement of shortness of breath and effectiveness in preserving renal function compared to placebo in a phase III dose ranging study. This data was presented at the 2008 American College of Cardiology meeting.

We had expected Merck to file for FDA approval of rolofylline later this year but based on today’s news, Merck noted that they will not file for approval in 2009. We expect to see the data presented later this year. The company will continue to look at the data with outside experts in order to help determine the potential for further development of rolofylline.

Today’s news is a significant disappointment for Merck as we viewed the candidate as one of the company’s most promising pipeline candidates expected to launch in the next three years. We had modeled rolofylline to begin generating revenue in 2010 and post sales of $285 million in 2013. However, based on the disappointing results from PROTECT, we expect development will be discontinued in the near future.

This also adds to Merck’s recent string of pipeline setbacks, which have significantly reduced the company’s ability to offset softening sales of key drugs Singulair, Gardasil and Vytorin/Zetia. The news comes less than two months after Merck announced in April 2009 that it would delay the filing for phase III migraine relief drug, telcagepant, based on safety concerns discovered in an earlier-stage dosing study. In October 2008, Merck discontinued development of phase III obesity candidate, taranabant, due to serious dose-related adverse events.