Merck & Co. (MRK) announced that the U.S. Food and Drug Administration (FDA) approved the drugmaker’s Keytruda therapy for first-line treatment of patients with metastatic colorectal cancer.
The approval is based on Phase 3 trial results which showed that Keytruda reduced the risk of disease progression or death by 40% compared with chemotherapy, the current standard of care. The study also demonstrated that Keytruda treatment more than doubled median progression-free survival (PFS) compared with chemotherapy.
“Today’s approval has the potential to change the treatment paradigm for the first-line treatment of patients with MSI-H colorectal cancer, based on the important findings that showed Keytruda monotherapy demonstrated superior progression-free survival,” said Roy Baynes, senior VP and chief medical officer at Merck Research Laboratories. “Our commitment to pursuing biomarker research continues to help us bring new treatments to patients, particularly for those who have few available options.”
Adverse reactions occurring in patients with colorectal cancer were similar to those occurring in patients with melanoma or non-small cell lung cancer treated with Keytruda, the study showed. Keytruda is an anti-PD-1 therapy that works by increasing the ability of the body’s immune system to help detect and fight tumor cells.
Mizuho Securities analyst Mara Goldstein this week reiterated a Buy rating for Merck with a $100 price target (reflecting 29% upside potential), saying that although the coronavirus pandemic effects on the drugmaker’s businesses are not yet over, the initial trends are positive.
“We expect to see a moderation in Keytruda growth given the decline in oncologist visits, though less impacted than other business lines,” Goldstein wrote in a note to investors. “MRK anticipates that the brunt of the effect will occur in 2Q20 with moderating effects in 3Q20.”
Shares are currently trading down 15% year-to-date, while analysts have a cautious Moderate Buy consensus on the stock. That breaks down into 8 Buy ratings versus 4 Hold ratings. Meanwhile, the average analyst price target of $91.40 implies 18% upside potential in the coming year. (See Merck stock analysis on TipRanks)
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