Proactive Investors - Merck & Co Inc (NYSE:MRK, ETR:6MK) shares traded more than 4% higher after it won US Food and Drug Administration (FDA) approval for its lung disorder drug sotatercept, brand name WINREVAIR.
After being granted breakthrough therapy designation by the agency, the drug is now the first FDA-approved activin signalling inhibitor therapy for pulmonary arterial hypertension (PAH), a rare, progressive and life-threatening disease where the blood vessels in an individual’s lungs thicken and narrow and cause strain on the heart.
The approval is based on results from the Phase 3 STELLAR study which showed WINREVAIR in combination with background therapy significantly improved participants’ exercise capacity when compared with background therapy alone.
“This approval is an important milestone, as it offers healthcare providers a novel therapeutic option that targets a new PAH treatment pathway,” commented Dr. Marc Humbert, Professor of Medicine and Director of the Pulmonary Hypertension Reference Center at the Université Paris-Saclay and STELLAR investigator.
"Based on the Phase 3 STELLAR trial, adding WINREVAIR to background PAH therapy demonstrated significant clinical benefits compared to background PAH therapy alone.”
Merck expects that WINREVAIR will be available at select specialty pharmacies in the US by the end of April.
Clean label relieves investors of angst
Analysts at the Bank of America (NYSE:BAC) Securities see the approval as positive, noting that that broad and “squeaky clean” label represents commercial upside.
“The biggest surprise today is the lack of function class restriction, which means there's a lot of flexibility for doctors to prescribe sotatercept to patients outside of STELLAR study criteria,” they wrote.
They noted that in the lead-up to the approval, Merck shares had been volatile as investors weighed up scenarios regarding the drug’s approval and its language.
“There's been a lot of investor angst ahead of decision today given sotatercept's increased risk of bleeding and hemoglobin level that might prompt FDA to issue either black box warnings, Risk Evaluation and Mitigation Strategy (REMS), and/or monitoring requirement,” the bank’s analysts wrote.
“That said, investors can breathe a sigh of relief given sotatercept's approval in PAH today comes with a squeaky-clean label, without WHO functional class restriction or a need to be on background therapy. Importantly, the label allows at-home administration and a finite duration of monitoring requirement (first five doses or longer as needed).”
They believe the monitoring requirement will not be a barrier to uptake.
“Getting a lab test for hemoglobin/platelet count is not burdensome since the test provides a binary output (yes or no) and does not require any input from a provider,” they wrote. “Longer-term, the frequency of monitoring may be extended from three to 12 weeks.”
The analysts reiterated their ‘Buy’ rating on Merck with a $135 price target following the drug's approval.
Shares of Merck traded up 4.3% at about $131 on Wednesday morning.