Merck KGaA (MKGAF) recently announced that the US Food and Drug Administration (FDA) issued a complete response letter (CRL) for its new drug application (NDA) for cladribine. Merck KGaA is seeking approval for the use of cladribine for the treatment of relapsing-remitting forms of multiple sclerosis (MS).
In the letter, the regulatory body has asked the company to either conduct additional analyses or additional studies in order to provide more information on the safety risks and the benefit-risk profile of the drug. Merck KGaA plans to request an end-of-review meeting with the FDA to find out whether data from the already conducted or ongoing clinical trials will be sufficient to meet the regulatory body’s requirements.
The company expects to report top-line results from the CLARITY EXTENSION and ORACLE MS trials by the end of 2011. Further, top-line results from the ONWARD study are anticipated in the first half of 2012.
The FDA had extended the review period of cladribine by three months in November 2010, saying that it needed more time to fully review the additional information provided by Merck KGaA on the candidate.
We note that cladribine faced a setback in the EU as well in January, with the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) maintaining its negative recommendation related to the approval of cladribine for the treatment of relapsing-remitting MS.
The CHMP had first recommended against the approval of cladribine for the treatment of relapsing-remitting MS in September 2010, on its belief that the benefits reaped by MS patients from the drug do not outweigh the attendant risks. Thereafter, Merck KGaA requested the EMA, in October 2010, for a re-examination of the adverse recommendation issued by the CHMP.
Cladribine is currently marketed as Movectro in Australia and Russia for the treatment of relapsing-remitting MS. The drug is under regulatory review in other countries.
We note that the MS market is highly competitive with players like Teva Pharmaceuticals Industries Ltd. (TEVA), Biogen Idec Inc. (BIIB) and Elan Corp. plc (ELN) already in the market with MS treatments.
Our Take
Though we view the CRL as a major setback for the company, we believe that Merck KGaA’s consistent investment in R&D, marketing and new product launches should help sustain earnings growth over the next few years.
We are also of the opinion that the acquisition of Millipore reduces Merck KGaA’s dependence on the pharmaceutical and liquid crystals sector and helps build its specialty chemicals business.
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