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Merck's Keytruda Gets FDA Approval for Rare Skin Cancer

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Merck & Co., Inc. (MRK - Free Report) announced that the FDA has approved its anti-PD-1 therapy, Keytruda, for the treatment of adult and pediatric patients with recurrent locally advanced or metastatic Merkel cell carcinoma (MCC), a rare form of skin cancer.

The approval was based on favorable data from the open-label phase II KEYNOTE-017 study, initiated and conducted by the Cancer Immunotherapy Trials Network (CITN).

Data from the study showed that as a monotherapy, Keytruda demonstrated an objective response rate of 56%, complete response rate of 24% and a partial response rate of 32% in patients with recurrent locally advanced or metastatic MCC, who previously did not receive any systemic therapy for their disease.

Notably in September this year, the FDA accepted and granted a priority review to Merck’s supplemental biologics license application (sBLA) for Keytruda in the given indication. The FDA’s decision was expected on Dec 28.

The FDA nod came under the accelerated approval pathway. The FDA generally grants an accelerated approval to a drug that fulfills an unmet medical need for a serious condition. Continued approval for this indication may be contingent upon verification and description of a clinical benefit observed in confirmatory studies.

Till now, chemotherapy was the only treatment option available for patients suffering MCC. This approval will help Merck gain access to a broader patient population and boost sales for its blockbuster drug.

Shares of Merck have surged 31.1% so far this year, outperforming the industry’s increase of 2.4%.

Merck’s Keytruda is already approved for use in several cancer types across different settings. Within a very short span, Keytruda has become Merck’s largest product. In the first nine months of 2018, Keytruda generated sales of $5.02 billion, marking an almost 100% increase year over year. The drug is consistently growing and expanding into new indications.

Notably, this November, the FDA granted an approval to Merck’s sBLA for expanding Keytruda’s label with regard to advanced hepatocellular carcinoma (HCC), the most common type of liver cancer in patients, previously being administered with Bayer/Amgen’s (AMGN - Free Report) Nexavar (sorafenib). Also, in October 2018, the FDA approved the label expansion of Keytruda as a first-line treatment option for metastatic squamous non-small cell lung cancer (NSCLC), a difficult-to-treat lung cancer.

Meanwhile, the Keytruda development program is also progressing well as the drug is being evaluated for more than 30 cancer types in above 850 analyses including several combination studies. Several regulatory decisions for new indications in the United States and across Europe are pending in 2019, which on approval, can further drive sales.

Zacks Rank & Other Key Picks

Merck currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the large cap pharma sector include Bristol-Myers Squibb Company (BMY - Free Report) and Roche Holding AG (RHHBY - Free Report) . While Bristol-Myers sports a Zacks Rank #1 (Strong Buy), Roche carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bristol-Myers’ earnings estimates have been revised 6.3% upward for 2018 and 5.1% for 2019 over the past 60 days.

Roche’s earnings estimates have moved 0.9% north for 2018 and 2.6% for 2019 over the past 60 days. The stock has rallied 11.6% in the past six months.

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