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At the end of last week, Merck made two big announcements. If there’s one thing we’ve learned the past two years, it’s that when big pharma speaks, we should listen.
Merck, known as MSD outside of the U.S., is a global pharmaceutical company responsible for developing and producing many life-saving therapies.
September 30th: PAH-lease
The first announcement was that the pharmaceutical giant acquired the rare disease company, Acceleron for $11.5B. With it comes the potential first-in-class therapy, sotatercept, in Phase III trials for the treatment of pulmonary arterial hypertension (PAH). At its most simple, it is a form of high blood pressure caused by constriction of arteries in the lungs and in the heart. This prevents blood flow to the lungs, which causes oxygen deprivation throughout the body.
(Image credit: Shutterstock)
That’s the scientific explanation. Practically speaking, it becomes exceptionally difficult to breathe or exert oneself with basic tasks, like climbing stairs. While some palliative treatments, like nitric oxide, can be used to temporarily widen blood vessels, these are only temporary solutions. One of pharma’s biggest under-the-radar races is to be the first-to-market in this space.
According to Grand View Research, this global market for PAH treatments is expected to grow from $5.5B in 2021 to $7.7B in 2028 (an average CAGR of about 5% per year). This rapid market growth is driven by an increasing prevalence of risk factors, including sedentary lifestyle, alcohol and/or tobacco consumption, HIV/AIDS, and other conditions.
Pulmonary arterial hypertension represents Merck’s latest commitment to venture into the rare disease space. Rare diseases are exactly what they sound like: devastating conditions that affect a relatively small number of people. As defined by the 1983 Orphan Drug Act, a rare disease is one that affects fewer than 200,000 people in the United States. Given the high-risk, high-reward, and capital-intensive nature of pharmaceutical development, this has left a staggering 95% of rare diseases without a curative treatment. However, the act also stipulates several economic incentives for therapeutic development, including longer patent lives, R&D tax credits, and others. Merck’s $11.5B acquisition also included the currently marketed drug REBLOZYL® (luspatercept-aamt), which is a first-in-class erythroid maturation recombinant fusion protein for the treatment of anemia in certain rare blood disorders.
Both of these assets signal a potential new direction for the pharmaceutical giant as their blockbuster oncology agent, KEYTRUDA® (pembrolizumab) heads towards patent expiration in 2028. Despite being approved in 31 indications and 16 different tumor types, all first-mover advantages must come to an end.
Keytruda's top competitors, ordered by date of earliest expected patent expiration. Number of approved indications found via approval history page for each product on Drugs.com.
All of this is to say that Merck is leveraging its established infrastructure and surplus of capital to pivot into new spaces like any other company. Of course, it’s easier to pivot when you have the capital to write nine- or ten-figure checks.
Despite some criticism around the valuation and timing of the Acceleron acquisition by investment groups, it was not Merck’s most notable announcement last week. That would be that the pharmaceutical giant is seeking Emergency Use Authorization (EUA) from the FDA for molnupiravir, a novel antiviral pill targeting COVID-19.
October 1st: 'There's a [pill coming soon] for that too.'
Merck has been relatively quiet amidst the industry-wide scramble to develop new products and/or repurpose old ones to address the COVID-19 pandemic. We’ve all been keeping close eyes on data pertaining to Pfizer’s, Moderna’s, and J&J’s vaccines in the U.S. Other vaccine candidates put forth by big pharma, including Sanofi’s and GSK’s, were pulled from development and redesigned due to early lackluster clinical trial results. Like Merck, these pharmaceutical giants have partially pivoted towards supporting the manufacturing of vaccine candidates that have already earned Emergency Use Authorization (EUA) to meet domestic and international demand. Other vaccine candidates are still in development for developing markets via up-and-coming innovators like Inovio Pharmaceuticals’ INO-4800.
However, molnupiravir positions Merck to be first-to-market with a desperately needed weapon in our arsenal for treating COVID-19.
From a 30,000 foot-view, an antiviral is like an antibiotic – it is (traditionally) a small molecule that helps you control the infection of a specific pathogen. Of course, antivirals are aimed at viruses, which reproduce by directly harnessing our cell’s machinery to replicate (unlike bacteria). Antivirals also target specific viruses, unlike antibiotics, which can target many different types of bacteria.
Broadly speaking, antivirals help control disease progression in one of three ways, by:
Preventing viruses from entering cells in the first place, thus preventing infection
Preventing viruses from harnessing our cell’s molecular machinery that they need to replicate, thus lowering the amount of virus (‘viral load’) in the body
Preventing infected cells from releasing viral particles, thus preventing new cells from becoming infected
In this case, molnupiravir leverages the second mechanism by targeting the virus’ DNA polymerase. This is the core enzyme needed for the virus to replicate. It then substitutes itself for one of those enzyme’s substrates, which generates errors in the genetic code that can render the virus inert. Despite the emergence of the delta, delta-plus, and mu variants of COVID-19, Merck is confident that this pill will be effective against current and future variants. This is likely because DNA polymerase is one of the most conserved – that is, least subject to change with each variant – enzymes in the genome. Even nature follows the axiom, ‘If it ain’t broke, don’t fix it.’
The structure of molnupiravir
Preliminary clinical trial data shows us cause for optimism. The planned interim analysis of the Phase III MOVe-OUT trial showed that the risk for hospitalization or death was cut by 50%. What’s more, these were COVID-19-postive patients who had a risk factor for a poor clinical outcome already. The data was compelling enough for the FDA to recommend closing the study early and encouraging Merck to proceed with their Emergency Use Authorization (EUA) application.
So where does that leave us? The day before Merck’s announcement, the US crossed the tragic threshold of 700,000 deaths from COVID-19. Even that pales in comparison to the current 4.80 million deaths worldwide (as of this writing). Despite the vaccine becoming broadly available in the US in early 2021, stark differences in adoption have led to a return to relative normalcy in some areas, while others are locked in a needless cycle of suffering.
Spikes in infections and hospitalizations refuse to abate abroad as well. The difference is that vaccines are not always readily available. Even first-world countries with established healthcare infrastructure and strong masking mandates like South Korea struggle with balancing a demand for foreign vaccines, economic and social stability, and the emergence of new variants. What’s more, life and death struggles continue in less fortunate countries like Brazil, where necessities like space, oxygen, and workers are stretched thin.
During a discussion at the Johns Hopkins Carey Business School, Merck’s CEO Robert M. Davis commented that they were already manufacturing molnupiravir at risk across 17 different sites in 8 countries and 3 continents. They’ve also given licenses to eight generics manufacturers in low-and-middle-income-countries (LMICs) to rapidly scale manufacturing where the drug is needed the most. Add on the fact that this is a small-molecule, so it's generally cheaper to make and easier to store than our current Pfizer and Moderna vaccines, and you've got a recipe to save lives anywhere.
Dean Alex Triantis of the Johns Hopkins Carey Business School (left) speaking with Robert M. Davis, CEO of Merck (right) as part of the Johns Hopkins Health Policy Forum on 10/04/2021
If the safety and efficacy data for molnupiravir hold up under the FDA’s scrutiny, the ability to reduce hospitalization through a short course of pills may move us towards a true post-COVID-19 world. The regimen is four capsules, taken twice a day for five days. Future iterations will likely simplify this, but for now, that’s not wildly different than taking an antibiotic for a typical infection.
While it’s less effective than monoclonal antibody treatment and cannot prevent disease like a vaccine, an oral pill formulation also has several behavioral implications. It negates the childish ‘I hate needles’ argument. It's easier to administer in a home setting, or anywhere else you are. Plus, the fact that the pill doesn’t modify or upgrade your immune system to deal with COVID-19 in the long-term may help some anti-vaxxers come to the table.
To be clear, widespread adoption of effective COVID-19 vaccines is still critical to managing – and eventually eliminating – this disease. Molnupiravir is likely the first of several agents that can serve as a stopgap against the worst COVID-19 has to offer.
At the very least, it sounds better than injecting bleach.
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