Ahead Of Merck's Keytruda PDUFA Date, Analyst Says Expect Approval

Merck & Co., Inc. MRK traders that haven't already done so should mark May 10 on their calendars. The company announced in early January the U.S. Food and Drug Administration has accepted for review the supplemental Biologics License Application (sBLA) for KEYTRUDA (pembrolizumab).

A Priority Review has been granted with a date set for next Wednesday.

Keytruda is a therapy used for the treatment of patients with metastatic or advanced non-squamous non-small cell lung cancer (NSCLC).

BMO: Expect Keytruda Approval

Merck also reported its first quarter results Tuesday, which BMO Capital Markets' Alex Arfaei described as "cautious." However, after taking a deep-dive into the report, the analyst became "more comfortable" with the results after the earnings conference call.

The analyst noted Januvia's miss in the quarter was "explainable" and driven by a $70 million purchase timing adjustment. Also, Zepatier's ex-U.S. launch is off to a better than expected start, vaccines performed well, and animal health was once again strong due to Bravecto.

Looking forward, Arfaei believes the "most important" upcoming event for Merk is the May 10 PDUFA date for Keytruda. The analyst is assigning an 80 percent likelihood of approval given its excellent efficacy and good safety profiles.

"We believe Merck is in a strong position to lead in IO with Keytruda monotherapy, combination with chemo, as well as in combination with INCY's Epacadostat for which we will likely see positive data at ASCO 2017, and soon its own secondary IO's," the analyst wrote.

Finally, Arfaei said Merck's primary growth driver through 2017 will be Keytruda, followed by a ramp-up in Zepatier. The company expects these two therapies to be a meaningful contributor in the bottom half of 2017 and the analyst's Keytruda sales estimate of $3.9 billion is even ahead of the consensus estimate of $3.5 billion.

See Also:

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Everything We Know About Merck's Keytruda