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Merck MRK announced that the FDA has accepted its application for an additional biologic authorization for the recently approved 15-valent pneumococcal conjugate vaccine (PCV), Vaxneuvance (V114) and has granted priority review to the same. The sBLA aims to expand the label of the multivalent PCV for the prevention of invasive pneumococcal disease in children aged six weeks to 17 years. An FDA decision on the possible approval of the vaccine’s expanded label is expected by April 1, 2022.
– To fail
Vaxneuvance was approved by the FDA for use in adults in June this year. An application for a marketing authorization for use of the 15-valent PCV in adults is pending in Europe. In October, the Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending the approval of the vaccine. A final decision from the European Commission is expected at the end of 2021.
Vaxneuvance’s label extension application in pediatrics is supported by data from Phase III and Phase II studies evaluating the vaccine in infants, children and adolescents. The study evaluated the vaccine in a variety of clinical settings, including special populations at increased risk of pneumococcal disease, such as children with HIV infection or sickle cell disease. The sBLA is also supported by data for the use of the vaccine as part of a mixed dosing regimen, including immunization of children who have not previously received a pneumococcal vaccine or who have received a partial or full regimen of a lower valence pediatric PCV.
Merck shares have fallen 9% so far this year, against an 11.8% increase in the sector.
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Aside from Vaxneuvance, Merck has a strong vaccine portfolio, led by its human papillomavirus vaccine, Gardasil. The company also has a 23-valent PCV, Pneumovax 23, in its portfolio. It also has a commercialized shingles vaccine, Zostavax. However, the vaccine faces strong competition from the popular shingles vaccine, Glaxo‘s GSK Shingrix.
Glaxo received its first FDA approval for Shingrix in 2017. The approval was followed by multiple label expansions over the years. Glaxo posted revenue of approximately $1.5 billion from Shingrix in the first nine months of 2021.
We note that Merck faced patent infringement lawsuits by another US pharmaceutical giant, Pfizer PFE, related to its PCV vaccines. In October, Merck and Pfizer entered into settlements to resolve all pending PCV-related lawsuits worldwide.
Under the terms of the settlement, Merck will pay royalties to Pfizer on net sales of all Merck PCV products through 2035.
Zacks Rank & Stocks to Consider
Merck currently holds a Zacks Rank #3 (Hold).
Sarepta Therapeutics SRPT is a better ranked stock from the pharma/biotech sector with a Zacks Rank #2 (Buy). You can see the full list of current Zacks #1 Rank (Strong Buy) stocks here.
Estimates for Sarepta have fallen from a loss per share of $6.95 to $4.99 for 2021 and from $4.83 to $3.61 for 2022.
Sarepta provided an average profit surprise of 11.06% in the last four quarters.
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