Merck’s $11.5 Billion Bet on Its Next Big Drug Finally Arrives
Newly approved medication treats potentially fatal pulmonary arterial hypertension
Merck MRK 0.17%increase; green up pointing triangle is making a big bet that its new drug, approved Tuesday in the U.S. for a potentially fatal lung disease, will take the company a long way toward heading off a massive revenue decline later this decade.
The drug, which will sell under the name Winrevair, treats a condition called pulmonary arterial hypertension that affects nearly 40,000 people in the U.S. In 2021, Merck paid $11.5 billion for the company developing the medicine. Some analysts estimate sales as high as $7.5 billion a year.
Merck is counting on the blockbuster performance. More than 40% of the drug company’s revenue, some $25 billion last year, comes from cancer treatment Keytruda. The immunotherapy is the world’s top-selling drug. Merck’s main U.S. patent for it expires in 2028, opening the door for lower-cost versions to eat into sales.
Winrevair will list for a price of $14,000 a vial, which for about two-thirds of patients will be the amount given every three weeks. That translates into about $242,000 for a full year, though Merck said the cost would vary by patient because dosage is weight-based.
“We see this as a multibillion-dollar potential opportunity for the company,” Merck Chief Executive Rob Davis said in an interview. “Over time we think we can move into earlier lines of therapy and potentially into much broader patient populations.”
Davis said progress in Merck’s research pipeline would help make the Keytruda loss of exclusivity “more of a hill than a cliff. And our confidence that we will be able to grow beyond that is high.”
The Food and Drug Administration approved Winrevair as an add-on therapy to other drugs for pulmonary arterial hypertension, which is commonly known as PAH.
The disease is a type of high blood pressure caused by constrictions in tiny arteries of the lungs. It causes shortness of breath and fatigue, diminishes exercise capacity and can be fatal without treatment. It is most common in women ages 30 to 60 years.
Winrevair, also known by its generic name sotatercept, uses a new approach to target the underlying cause of PAH. It works to stop the proliferation of cells in artery walls that lead to constrictions.
In a Phase 3 study, a sotatercept injection every three weeks significantly improved volunteers’ exercise capacity—measured by distance walked in six minutes—and extended the time until either death or disease progression, compared with a placebo.
“It’s a big breakthrough,” said Dr. Jessica Huston, a cardiologist at Ascension Saint Thomas Heart in Nashville, Tenn., who enrolled patients in the Merck-funded study. “It feels like this drug is finally something different than we’ve been doing all along, and is actually disease modifying.”
The drug was associated with side effects including bleeding and the formation of small blood vessels on the skin in some patients.
Its launch returns cardiovascular treatment to a prominent place at Rahway, N.J.-based Merck. The company’s first billion-dollar drug was Vasotec for high blood pressure. Mevacor was the first commercial statin for high cholesterol, and the company later sold the next-generation statin Zocor.
Merck also is hoping to preserve some Keytruda sales by testing whether its use in combination with other therapies works better than Keytruda alone. These include an experimental cancer vaccine developed by Moderna and a next-generation chemotherapy treatment called an antibody-drug conjugate.
Among its top drug prospects in the works are treatments for lung cancer and a pneumococcal vaccine for adults.