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Merck’s August performance drives PPIP’s growth

Merck makes up approximately 6.5% of Pittsburgh Pharmacy Investment Portfolio’s holdings. PPIP bought 76 shares of Merck at a price of $60.05 on August 23, 2018. 13 shares were sold at $78.69 on May 1, 2019 and another 15 shares at $78.02 on May 4, 2020 to make room for new holdings. On Thursday, July 30th, Merck closed at $78.99 per share. On Thursday, August 27th, Merck closed at $85.82 per share, thus adding $327.84 of growth to our portfolio. Here are some of the factors possibly driving Merck’s growth in August.

July 31st, 2020 – Q2 earnings were released. Q2 global sales decreased 8% from 11.8B in Q2 2019 to 10.9B in part due to the impact of COVID-19. However, many companies also saw losses due to COVID-19. Growth in Immuno-oncology helped offset these losses. Keytruda sales grew 29% to $3.4B. Merck’s share of Lynparza and Lenvima, being co-developed and co-commercialized with AstraZeneca and Eisai, grew 61% to 178M and 57% to 151M, respectively. Merck is also involved in two COVID-19 vaccine efforts and one novel antiviral candidate for COVID-19.

August 4th, 2020 – Merck and Hanmi Pharmaceutical entered an agreement to develop, manufacture, and commercialize efinopegdutide, Hanmi’s investigational once-weekly GLP-1/glucagon receptor dual agonist, for the treatment of nonalcoholic steatohepatitis (NASH). Phase 2 evidence peaked Merck’s interest in establishing a partnership and further studying efinopegdutide’s role in the treatment of NASH. According to the American Liver Foundation, it is estimated that 5% of adults in the U.S. have NASH. Since no treatment currently exists, NASH is an area of competition with companies such as Novartis, Intercept, Gilead, Novo Nordisk, Eli Lilly, and Alnylam.

August 19th, 2020 – Keytruda in combination with chemotherapy showed a superior survival benefit as first-line treatment for patients with esophageal cancer regardless of histology. Results of Phase 3 KEYNOTE-590 trial are to be submitted to global regulatory authorities early after an independent monitoring committee determined Keytruda in combination with chemotherapy demonstrated statistically significant and clinically meaningful improvement in Overall Survival and Progression-Free Survival compared with chemotherapy (the current standard of care) in the intent-to-treat (ITT) population. Beyond chemotherapy, few first line treatments options are available for esophageal cancer. Approval would add to Keytruda’s extensive list of oncology indications and provide a needed treatment option for people diagnosed with esophageal cancer, the seventh most commonly diagnosed cancer and sixth leading cause of death from cancer worldwide.

August 24th, 2020 – In Japan, Keytruda secured two new indications. One, Keytruda is approved for patients with PD-L1-positive esophageal squamous cell carcinoma who have progressed after chemotherapy. Of note, more than 90% of esophageal cancers are squamous cell carcinomas in Japan. Two, Keytruda is approved for a six-week dosing schedule across all adult indications including combination and monotherapy. With these two approvals, Keytruda now has 13 indications across seven tumor types in Japan. Looking towards the future, there are more than 1,200 trials studying Keytruda across a variety of cancers and treatment settings.

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