Evobrutinib

Merck KGaA (MRCG.DE), the German healthcare and technology powerhouse, announced on Monday that it is in advanced negotiations to acquire U.S. biotech firm SpringWorks Therapeutics (SWTX.O), known for its focus on cancer and rare diseases. This move could significantly bolster Merck's oncology portfolio, especially following recent setbacks in its late-stage drug trials. In a statement, Merck confirmed that discussions are ongoing but noted that no legally binding agreement has been reached, and the outcome remains uncertain. The talks follow an earlier report from Reuters, which indicated that a deal could be finalized in the coming weeks, with sources requesting anonymity due to the confidential nature of the negotiations. SpringWorks shares soared 34% on Monday, pushing the company's market value to approximately $4 billion. The stock initially jumped nearly 49% after news of the talks broke, reaching its highest levels since April 2022. However, shares of Merck KGaA closed down 3.7% amid broader market fluctuations. The U.S. healthcare sector is witnessing a resurgence in deal-making activity after a slowdown in 2024, largely due to pharmaceutical companies focusing on integrating past acquisitions. For example, Johnson & Johnson recently agreed to acquire Intra-Cellular Therapeutics for about $14.6 billion. SpringWorks, based in Stamford, Connecticut, is a commercial-stage biotech company that develops treatments for various cancers, particularly rare tumors and uterine cancer. Its drug for treating desmoid tumors has already received U.S. approval, and it anticipates another approval for a product addressing neurofibromatosis type-1 later this month. Should the acquisition succeed, it would represent one of Merck's largest pharmaceutical transactions in recent years, enhancing its cancer treatment pipeline at a crucial time. The company has faced significant challenges, including halting development on its Xevinapant drug for head and neck cancer and experiencing failures in trials for its Evobrutinib multiple sclerosis treatment. Analysts at JPMorgan expressed optimism regarding the potential acquisition, noting that it could complement Merck’s existing oncology operations, which account for about 25% of its healthcare sales in 2024. They believe that the products offered by SpringWorks could counterbalance the impact of competition and loss of exclusivity that Merck is currently facing. Merck has a history of ambitious acquisitions, including its $17 billion purchase of Sigma-Aldrich in 2015 and the €5.8 billion acquisition of Versum in 2019. In a recent interview, Merck's CEO mentioned that improving sales growth would allow for a more cautious approach to future acquisitions, especially in a market where valuations remain high. As the discussions progress, the pharmaceutical industry will be watching closely to see if Merck KGaA can successfully finalize this transformative deal.

iStock, WhataWin Roche’s fenebrutinib this week scored a mid-stage win in relapsing multiple sclerosis, while Sanofi’s tolebrutinib met the primary endpoint in a Phase III trial for progressive MS but flopped in two late-stage relapsing MS studies. It was a big news week for multiple sclerosis clinical trial readouts involving oral BTK inhibitors, which leverage their small molecular structure to cross the blood-brain barrier. Roche was the outright winner while Sanofi announced mixed results. Sanofi’s tolebrutinib on Monday missed the primary efficacy endpoints in two Phase III studies, failing to significantly reduce annualized relapse rate (ARR) in patients with relapsing MS (RMS), while succeeding in a third late-stage trial showing that the BTK inhibitor significantly delayed disability progression in patients with a less common form of progressive MS. Still, according to GlobalData, tolebrutinib “stands out as being particularly promising” and is expected to generate sales of approximately $2.6 billion in 2030 across seven major markets—the U.S., France, Germany, Italy, Spain, U.K. and Japan. The data analytics firm predicted worldwide sales of fenebrutinib will only reach $810 million that same year. Jefferies analysts described positivity around tolebrutinib, saying in a note to investors that despite the “mixed news,” Sanofi’s drug “now appears a largely de-risked perhaps $1–2 billion opportunity.” Meanwhile, just two days after Sanofi’s announcement, Roche’s fenebrutinib scored a mid-stage win in RMS, demonstrating near-total elimination of disease activity. GlobalData said the BTK inhibitor “shines” with 96% of patients treated free of relapses at one year, with data from three ongoing Phase III trials expected by the end of next year. According to Spherix Global Insights, orally administered BTK inhibitors are “already established in oncology” with U.S. neurologists “eagerly” awaiting the drug class for MS. However, the market research firm contends that setbacks involving safety have created an environment of uncertainty. Liver Safety and Secondary Endpoints in Focus While the overall sentiment for BTK inhibitors for MS is positive, the safety pro these treatments remains a point of concern. Sanofi’s Phase III tolebrutinib studies were placed on partial clinical hold by the FDA in June 2022 after researchers found cases of drug-induced liver injury in some patients, while the regulator put Roche’s fenebrutinib under a partial clinical hold in December 2023 after two patients experienced elevated hepatic transaminase and bilirubin levels indicative of liver injury. According to Jefferies analysts, liver safety “will be a key focus” at the Sept. 20 presentations of Sanofi’s HERCULES and GEMINI 1 and 2 full results at the 40th Congress of European Committee for Treatment and Research in Multiple Sclerosis in Copenhagen, Denmark. Shiv Saidha, professor of neurology at Johns Hopkins University, said on a Jefferies call Thursday that another important aspect of these data will be the benefit across secondary endpoints, noting the failure last year of Merck KGaA’s BTK inhibitor evobrutinib to show benefit on these measures in MS before the German pharma decided in March 2024 to terminate its development. Although Sanofi’s Phase III GEMINI 1 and 2 trials did not demonstrate a reduction in ARR, GlobalData observed that pooled data from secondary endpoints suggested a significant delay in the onset of confirmed disability worsening, aligning with the positive confirmed disability progression findings from the late-stage HERCULES study, and “providing a measure of support for tolebrutinib’s potential efficacy.” Nevertheless, there appears to be a bit of a confidence problem in the wider drug class, Jefferies analysts noted. “Investor expectations have likely been notably lower after competitor Merck KGaA’s evobrutinib RMS failure.” So the question remains: Can orally administered BTK inhibitors ultimately succeed in MS like they have in oncology?