Merck's Announcement of Successful Phase 3 Trial of Subcutaneous Keytruda Progresses Towards FDA Submission

With MRK announcing that their subcutaneous Keytruda seems to work just as well as their IV infused Keytruda in a Ph. 3 trial, they're on their way toward FDA submission. This highlights an interesting strategy of pharma companies seeking to extend patent life of their products (by formulating with an enzyme called hyaluronidase to make it injectable) while also improving the patient experience (≤10mn injection vs. prior ≥30mn infusion).

Merck’s Investigational Subcutaneous Pembrolizumab With Berahyaluronidase Alfa Demonstrates Noninferior Pharmacokinetics Compared to Intravenous (IV) KEYTRUDA® (pembrolizumab) in Pivotal 3475A-D77 Trial - Merck.com

Recall that in August 2024, Keytruda became the top-selling drug in the world, with FactSet expecting sales to peak at $33.3B in 2027. In 2024 alone, Keytruda generated around $25B in sales for Merck. This accounted for roughly 40% of its total revenue.

Keytruda was approved by the FDA over 10 years ago as a groundbreaking medicine that promised to turn the body's own immune system against cancer cells. Keytruda helped to launch a wave of immunotherapy drugs that have revolutionized how doctors treat cancer.

Merck sponsored hundreds of human studies of the medicine. Trial after trial showed that Keytruda worked far better than existing treatments. In advanced skin cancer, where survival rates a year after diagnosis had been only 25%, Merck eventually showed that patients on Keytruda survived more than 2½ years on average, and that nearly 40% of patients were alive after seven years.

However, Merck expects the patents protecting Keytruda to expire in the U.S. in 2028, at which point it will begin facing competition from copycat medicines known as biosimilars. Amgen and Samsung Bioepis are already testing their own versions of Keytruda. A large handful of biosimilars could be on the market by 2028 or 2029.

And that will happen just as Keytruda becomes eligible for a government program that could allow Medicare to pay reduced prices for the medicine beginning in 2028. A long history of patent expirations in the pharma industry suggests that Merck will face a revenue hole of some $16 billion by 2029 or 2030, and that’s assuming that multiple things go right.

For the foreseeable future, though, Keytruda remains vital to Merck’s future. The company is betting on its strategy—call it Keytruda 2.0—to extend the financial value of the drug well past its expiration. The success of the latest trial is a very positive step in the right direction.

Today, every dose of Keytruda is administered intravenously during a 30-minute session at a hospital or clinic.

The new subcutaneous version would be more convenient for patients and doctors but would also have big commercial benefits for Merck. It would mean that the biosimilar versions of intravenous Keytruda that hit the market in 2028 would need to compete with Merck’s new subcutaneous version, which competitors wouldn’t be allowed to copy, leaving open an avenue for Merck to hold on to significant Keytruda revenue.

Merck executives say the new version of the drug could also be exempt from the Medicare price negotiation program.

We will be keeping our eyes closely on this.