Merck (MRK, Financial) has introduced a new formulation of its renowned cancer therapy, Keytruda (pembrolizumab), marking a significant milestone for the company. The subcutaneous version of this anti-PD1 drug achieved its primary goals in a critical Phase 3 trial, showing comparable performance to the FDA-approved intravenous version and is considered a first-line treatment for lung cancer. Despite a muted response from Wall Street, this development is a crucial step for Merck in expanding market access, as Keytruda accounts for over 40% of the company's total sales.
Merck plans to submit applications for the new formulation to global regulatory bodies promptly. The timing is crucial for the New Jersey-based pharmaceutical giant, as Keytruda is expected to face significant regulatory and market challenges in the coming years. The drug’s market exclusivity in the United States will expire in 2028, potentially risking a substantial portion of Merck's revenue as competitors develop cheaper biosimilars. The injectable version of Keytruda, containing the drug delivery compound berahyaluronidase alfa from South Korean biotech company Alteogen, will not face immediate competition, unlike its intravenous counterpart.
The injectable Keytruda offers greater convenience compared to the current intravenous version, which requires 30 minutes for administration every three to six weeks. The new version takes approximately 2-3 minutes to administer, potentially enhancing patient experience and accessibility for both patients and healthcare providers. Merck's oncology clinical development head, Marjorie Green, highlighted these benefits.
In addition to the patent cliff, Merck anticipates Medicare pricing negotiations for intravenous Keytruda in 2028. However, the new injectable version could be exempt from such negotiations, allowing Merck to establish pricing terms for the more convenient option. CEO Robert Davis noted during the Q1 2024 earnings call that the company expects about 50% of regular Keytruda patients to switch to the injectable version by 2028, viewing the subcutaneous option as a potentially lucrative market.
