An advisory panel of the US Food and Drug Administration (FDA) recently dealt a blow to Merck ( MRK - Analyst Report ) and ARIAD Pharmaceuticals’ ( ARIA - Snapshot Report ) oncology candidate, ridaforolimus (proposed trade name: Taltorvic). The FDA’s Oncologic Drugs Advisory Committee (ODAC) voted 13-1 against the drug. Merck and ARIAD are looking to get ridaforolimus approved as a maintenance therapy for patients with metastatic soft-tissue sarcoma or bone sarcoma whose disease has not progressed after at least four cycles of chemotherapy.

The panel’s vote did not come as a huge surprise. Earlier, in its briefing documents, the FDA had asked the committee to analyze the risk-benefit profile of ridaforolimus given the small differences in median progression free survival (PFS) and overall survival (OS) between the ridaforolimus and placebo arms and ridaforolimus’ adverse event profile.

While the FDA is not bound to follow the advisory committee’s advice, it usually does so. At this point, given the concerns regarding ridaforolimus’ safety and efficacy, we believe chances of gaining first-round approval are low.

Merck and ARIAD’s new drug application (NDA) for ridaforolimus was accepted by the FDA for standard review in September 2011 – a response should be out in the first half of 2012. The candidate is currently under EU review as well.

Merck and ARIAD have an exclusive licensing agreement for ridaforolimus. While Merck is responsible for the development and worldwide commercialization of ridaforolimus in oncology, ARIAD will co-promote ridaforolimus in the US.

We note that another oncology candidate fared better than ridaforolimus at the ODAC meeting. The committee voted 11-2 in favor of GlaxoSmithKline’s ( GSK - Analyst Report ) Votrient for use in treatment-experienced patients with advanced soft tissue sarcoma.

We currently have a Neutral recommendation on Merck, which carries a Zacks #3 Rank (short-term “Hold” rating).