Merck Earnings Call Nuggets: Outcome of IMPROVE-IT and Filing Odanacatib

Merck & Co Inc (NYSE:MRK) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Outcome of IMPROVE-IT

Tim Anderson – Sanford Bernstein: Couple of questions on odanacatib. You’ve talked about safety obviously in the past and today you said the filing will slip. Without telling us what that safety issue is exactly, can you at least tell us whether that safety concern is a theoretical one, whether there’s actually any signal of some sort that you’ve seen in the data that you have in hand? And then on ZETIA atorvastatin, I look at that as normally a lower risk application, but given the controversies with ZETIA in the past, I would have to imagine FDA doesn’t take any final action until they have results from IMPROVE-IT. So the fact that you are saying FDA should complete its review by midyear might suggest that IMPROVE-IT could wrap up at this next interim look in March. So, I’m wondering if I am thinking about this correctly in terms of IMPROVE-IT potentially stopping at the interim look. And can you just reiterate your level of confidence in the outcome of IMPROVE-IT whenever it starts?

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Kenneth C. Frazier – Chairman, President and CEO: Thank Tim for that question. I’d like to turn it over to Peter, but just to reiterate, we continue to believe in the future benefit that’s possibly associated with coming forward with both of those drugs. So, let me turn it over to Peter.

Peter S. Kim, Ph.D. – EVP and President, Merck Research Laboratories: Tim, as you know, in July, we announced that the Data Monitoring Committee; the DMC, for the study completed its first planned interim analysis and they recommended that the study be closed early due to robust efficacy and a favorable benefit risk profile. And as a result of that, we made the decision to begin to take steps to close the pivotal trial. And as you know, we also said that the DMC noted that safety issues remain in certain select areas and they made recommendations with respect to following up on them. At that point, we reiterated the fact that our previously announced plan to conduct a blinded extension trial would allow us to further monitor these issues as well as to continue to measure efficacy. And really, at this point in time, that’s all we can say. We are going to be conducting as I say that extension trial in a double-blinded manner and we anticipate filing in 2014.

With regard to ATOZET, the combination of ZETIA with atorvastatin, what I would say there is that that file has now gone in. It is a re-filing as we have now conducted the clinical efficacy study to show that we’re clinically – with regard to clinical efficacy we have bioequivalence to the individual components alone. And, of course, the individual combination of ZETIA with atorvastatin is something that isn’t the label; it is currently being used. And so what we’re talking about is a combination of convenience. With regard to IMPROVE-IT, you’re correct the data monitoring committee for IMPROVE-IT, as you know, requesting there be another interim analysis. That interim analysis is currently scheduled for March, and we’ll see what happens there. With regard to confidence, I’ll just reiterate as I have before that we are very confident that lowering LDL cholesterol is a good thing to do for cardiovascular health.

Filing Odanacatib

Anthony Butler – Barclays Capital: Staying with odanacatib and then a couple of other pipeline questions, Peter, while we have you, you reemphasized or reread; it’s a live press release, when by saying that the DMC when they reached 70% of the key events so it’s roughly at least 166 events that would have occurred out of the 16,000 patients. But the question is, in the release also it states that you would file in ’13, the notion of the extension study was documented. So I guess the question is, was the anticipation at the time to file on the existing date of (July) without the extension study and then what changed to win and therefore included the extension study? If it was to have been included all along is it just simply taking longer than you would have assumed? Then two brief comments if I may, will we get any readout on the PD-1 in melanoma this calendar year and also on the base inhibitor in the Phase II in Alzheimer’s?

Peter S. Kim, Ph.D. – EVP and President, Merck Research Laboratories: You are correct that in July we said that we anticipated filing odanacatib in 2013. As I said we have just recently received the data from the pivotal study. We do not have any data from the ongoing extension study. But we have made the decision to include data from the extension study in our filings for regulatory approvals. So that’s really what I can see about that. With regard to PD-1, I’ll begin by saying that this is a very exciting mechanism and that actually unleashing the immune system so that it can now attack tumors is a very exciting area of research and we are certainly excited about our PD-1 inhibitor MK-3475 which is still early in development but which has shown significant improvement in patient outcomes. We reported recently on over I think 85 melanoma patients that we’re on our monotherapy and we saw a 51% objective anti-tumor response. So that’s really what we know right now. We have not made a final decision as to what it is that we’re going to be presenting this year. Although, I certainly anticipate that we will present additional data at the ASCO meeting as we move forward. So I’ll just say that, stay tuned, we certainly are very excited by this program. We are pleased with the data that we’ve seeing to date and we do anticipate presenting additional data later this year.

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With regard to the base inhibitor, which as you also know we’re very excited about. The key developments from 2012 were first of all that we were able to show that one can lower CSF A beta levels in people by over 90% without having untoward effects and that was a new result. Really, we had not known previously if you could lower CSF A beta by those sorts of levels and not have something show up, which was untoward. So that then gave us the confidence to kick off a Phase II/III outcomes trial in Alzheimer’s patients and that has now started. The design of that trial is to begin by enrolling a initial cohort of patients with mild to moderate Alzheimer’s disease and then after a set period of time to look for any safety issues that would preclude us from moving forward to Phase III. Absent any of those safety issues that would preclude us from moving into Phase III, to then move in a seamless manner into Phase III in the mild to moderate patient population. At the same time such a move would kick-off our plans to conduct the study in what’s called the prodromal patient population, and the prodromal population are basically patients with mild cognitive impairment or MCI that as judged by biomarkers have a higher propensity to progress to Alzheimer’s disease, the frank Alzheimer’s disease in a shorter period of time. As you may have seen, we’ve announced a deal with GE to use their PET ligand to identify patients with MCI that fall into this prodromal category, and we will use their PET ligand and take advantage of the infrastructure that they’re helping to establish to allow us to enroll a prodromal Phase III study with our base inhibitor. So that’s really the upshot of where things exist. We will conduct an interim analysis of the safety cohort as I said. We expect this interim analysis of the safety cohort to occur by the end of 2013.

A Closer Look: Merck Earnings Cheat Sheet>>