Merck shares fall after multiple sclerosis drug trial fails

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Shares in German pharmaceutical group Merck fell nearly 14 per cent on Wednesday morning after it announced that its experimental multiple sclerosis drug had failed in late-stage trials.

Chief executive Belén Garijo said in October that the company hoped evobrutinib could be a blockbuster, defined by the pharmaceutical industry as a drug that generates more than $1bn in annual sales. But on Tuesday night, the company announced it had failed to reduce relapse rates for MS patients compared with teriflunomide, which is produced by rival Sanofi.

“We are very disappointed with the results,” said Merck’s global head of research and development and chief medical officer Danny Bar-Zohar, adding that the company would continue to “focus on progressing our marketed portfolio and internal pipeline”.

Merck estimates that 2.8mn people have MS, a neurological condition with symptoms including balance and movement problems, pain and tiredness.

The news about evobrutinib, which caused the company’s shares to fall to their lowest level since 2009, was another disappointment for Merck after it was forced two years ago to halt work on a cancer drug, bintrafusp alfa, which had also been viewed as a potential blockbuster.

Analysts will now be focusing on Merck’s progress with xevinapant, an experimental drug for head and neck cancer that is in late-stage trials.

It is not unusual for expensive medical trials to fail. Two weeks ago, shares in Merck’s rival Bayer dropped to their lowest level in a decade after the company abandoned a late-stage trial of a blood-thinning drug.

Merck, which employs 64,000 people, is the world’s oldest pharmaceutical company, tracing its history back to 1668. The founding family still owns 70 per cent of the company.