MSD has only just completed its $10 billion takeover of Verona Pharma, but is still on the hunt for more bolt-on acquisitions to flesh out its pipeline, according to chief executive Rob Davis.
On the company's third-quarter results call, Davis said that despite the company's multibillion-dollar peak sales expectations for Verona's Ohtuvayre (ensifentrine) in chronic obstructive pulmonary disease (COPD), "we need to do more…and we continue to look across all therapeutic areas."
Davis has previously said that MSD – known as Merck & Co in the US and Canada – is still looking for transactions worth up to $15 billion as it prepares for the loss of patent protection in 2028 for its biggest product, cancer immunotherapy Keytruda (pembrolizumab), which contributed more than $8 billion of its $17.3 billion in third-quarter revenues.
While the figure was slightly shy of expectations, breaching the $8 billion threshold for the first time consolidated Keytruda's position as the pharma industry's biggest-selling medicine, and creates an even bigger gap for MSD to plug when it faces biosimilar rivals. And that competition could gather momentum more quickly if the FDA follows through on proposals to reduce the hurdles needed to bring biosimilars to market, which were announced this week.
Along with Verona, MSD has been adding to its post-Keytruda prospects with a string of acquisitions and licensing deals in the last couple of years, including the takeovers of Modifi Biosciences, EyeBio, Abceutics, and Harpoon Therapeutics in 2024.
Davis said small- to mid-sized deals remain the key focus, and – while he would not rule out a larger-scale merger – that is not something that needs to happen "because as we have one of the most robust pipelines we've ever had, and we see large synergy-driven deals as disruptive to that activity." The company currently has around 80 phase 3 trials on the go.
One drug from an MSD acquisition, pulmonary arterial hypertension (PAH) treatment Winrevair (sotatercept), has emerged as one of its strongest growth drivers with sales reaching $360 million in the third quarter, up 141% on the same period of 2024. MSD added Winrevair when it bought Acceleron Pharma for $11.5 billion in 2021.
Keytruda and Winrevair's growth has helped offset weakening sales of Gardasil, MSD's top-selling HPV vaccine, which shrank 24% to $1.7 billion due to continuing reduced demand in China as well as Japan.
https://pharmaphorum.com/news/msd-still-seeking-deals-urgency-after-verona-takeover
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