What Drug Study Flop Means for Merck, Incyte

The failure of their cancer immunotherapy combination is a bigger blow to Incyte than to Merck.

Securities In This Article
Incyte Corp
(INCY)
Merck & Co Inc
(MRK)

Early data for the combination of Incyte’s IDO inhibitor and Merck’s Keytruda in melanoma was promising, with what looked like slightly better efficacy without the additional side effects that some drug combinations can trigger. Management is still diving deeper to see if there could be some patient subgroups (PD-L1 status, BRAF status, and so on) that did better on the combination. However, given the hazard ratio for the overall study and what we see as similar profiles for PD-1 antibodies Keytruda and Opdivo, we think this bodes poorly for epacadostat’s other phase 3 programs that remain ongoing.

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About the Author

Karen Andersen, CFA

Strategist
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Karen Andersen, CFA, is a sector director, AM Healthcare, for Morningstar*. In addition to leading the sector team, she covers biopharma firms in the US and Europe, focusing mostly on large-cap firms with foundations in biologic or gene-based medicines.

Before joining Morningstar in 2005, Andersen received a master’s degree in business administration from the Jones Graduate School of Business at Rice University, where she served as senior healthcare analyst for the M.A. Wright Fund and earned the distinction of Jones Scholar. She also holds the Chartered Financial Analyst® designation.

She ranked first in the biotechnology industry, and had the highest score overall, in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

Andersen holds a bachelor’s degree in biochemistry from Rice University, where she graduated magna cum laude. She is also a member of Phi Beta Kappa. She has scientific research experience in academia at both Rice University and the University of Queensland in Australia. She also worked in the healthcare industry, both at genetic testing firm Integrated Genetics (now part of LabCorp) and as a research assistant at Lexicon Genetics (now Lexicon Pharmaceuticals).

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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