Merck & Co. announced on Monday that Japan’s regulator approved the drugmaker’s Keytruda therapy for the treatment of patients with advanced esophageal squamous cell carcinoma (ESCC).
Merck (MRK) said that Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) also granted approval for its Keytruda monotherapy to be used at an additional recommended dosage of 400 mg every six weeks administered as an intravenous infusion over 30 minutes across all adult indications.
This new dosage option will be available in addition to the current dose of 200 mg every three weeks. The six-week dosing schedule for Keytruda is now approved in Japan, the US and Europe.
“We remain committed to improving outcomes for as many patients with cancer as possible, including those with esophageal squamous cell carcinoma, which is a leading cause of cancer-related death in Japan,” said Merck’s Jonathan Cheng. “With today’s approvals, specific patients with esophageal cancer can receive a much-needed new treatment option, and adult patients receiving Keytruda will now have the option of a dosing schedule that reduces how often they are at the clinic for treatment.”
Merck said that esophageal cancer, is a type of cancer that is particularly difficult to treat, begins in the inner layer (mucosa) of the esophagus and grows outward. There are two main types of esophageal cancer: squamous cell carcinoma and adenocarcinoma. In Japan, more than 90% of all esophageal cancers are squamous cell carcinomas.
Globally, esophageal cancer is the seventh most commonly diagnosed cancer, and it is estimated there were more than 572,000 new esophageal cancer cases and nearly 509,000 deaths resulting from the disease in 2018.
With these approvals, Keytruda has 13 indications across seven tumor types plus MSI-H tumors in Japan.
Merck shares are currently trading down 6.5% year-to-date, while analysts have a cautiously optimistic Moderate Buy consensus on the stock. That breaks down into 6 Buy ratings versus 3 Hold ratings. Meanwhile, the average analyst price target of $93.50 implies 9.6% upside potential in the coming year.
Mizuho Securities analyst Mara Goldstein recently reiterated a Buy rating on the stock with a $100 price target (reflecting 18% upside potential), saying that oncology is seeing a rebound from Covid-19. (See Merck stock analysis on TipRanks)
“The growth in Keytruda continues to drive transformation in the P&L and is supportive of our investment thesis,” Goldstein wrote in a note to investors.
The analyst expects Keytruda to drive operating margin expansion and offset negative pressure from loss of exclusivity for other products.
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