Merck's Bid To Add Cardiovascular Data On Januvia Label Fails

Merck & Co., Inc. (NYSE:MRK) announced that the FDA has denied approval to include cardiovascular outcomes data on the labels of its diabetes drug, Januvia (sitagliptin) and other medicines containing Januvia.

The FDA issued a complete response letter to Merck’s supplemental new drug applications (sNDA) seeking approval to include data from the TECOS (Trial Evaluating Cardiovascular Outcomes with Sitagliptin) trial on labels of Januvia, Janumet (Januvia+ metformin HCl) and Janumet XR, an extended release formulation of Janumet. Merck is reviewing the letter and will discuss further steps with the FDA.

Merck’s shares are up 7.2% so far this year, comparing favorably with an increase of 5.7% witnessed by the Zacks classified Large-Cap Pharma industry.

As it is, the Januvia franchise (Januvia+Janumet) is facing pricing pressure due to higher discounts and rebates to maintain good managed care coverage. The franchise recorded sales of $1.51 billion in the fourth quarter of 2016, up 4% from the year-ago quarter as higher sales in the U.S. offset lower sales in Japan. In 2016, the franchise’s sales were $6.1 billion, up 2% year over year.

Note that the diabetes space is highly crowded with drugs like Eli Lilly & Company’s (NYSE:LLY) Tradjenta and Jardiance, Novo Nordisk (CO:NOVOb) A/S’s (NYSE:NVO) Victoza and Tresiba and Johnson & Johnson’s (NYSE:JNJ) Invokana, among others.

Importantly, with Lilly and Boehringer Ingelheim receiving FDA approval last year to include the cardiovascular (CV) indication on the label of their SGLT-2 inhibitor, Jardiance, DPP-IV inhibitors like Januvia could see patients switching to SGLT-2 inhibitors. Cardiovascular disease is very common in adults with type II diabetes. With about 50% of deaths in type II diabetics resulting from CV disease, the addition of this data to Jardiance’s label can lead to a major surge in the sales of the drug. The latest setback adds to Merck’s woes for the diabetes franchise.

Merck currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks' Hidden Trades

While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them? Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>