Shares of Merck & Co. (MRK) rose 5% on Friday after the pharmaceutical giant reported positive developments across multiple oncology programs, reinforcing investor confidence in its efforts to extend the dominance of blockbuster cancer drug Keytruda ahead of looming patent expirations later this decade.
The rally followed encouraging Phase 3 clinical trial results involving sacituzumab tirumotecan, or sac-TMT, an antibody-drug conjugate developed in partnership with Sichuan Kelun-Biotech Biopharmaceutical.
The treatment, when combined with Keytruda, demonstrated significantly improved outcomes for patients with advanced non-small cell lung cancer.
Merck shares also gained support after European regulators issued a positive opinion recommending approval of the Keytruda and Padcev combination for a specific type of bladder cancer.
Lung cancer trial strengthens Keytruda franchise
Interim results from the Phase 3 OptiTROP-Lung05 study showed that the combination of sac-TMT and Keytruda outperformed Keytruda alone in patients with advanced non-small cell lung cancer.
Kelun-Biotech said the treatment significantly improved progression-free survival and reduced the risk of disease progression or death by roughly 65%.
The trial enrolled more than 400 advanced-stage patients in China who had not previously received systemic therapy.
Although overall survival data remain immature, the company said early results showed a “positive trend.”
The results are viewed as strategically important for Merck as the company prepares for Keytruda’s approaching patent cliff beginning in 2028.
Keytruda has become one of the world’s best-selling cancer drugs and remains central to Merck’s oncology business.
However, analysts expect biosimilar competition to intensify once key patent protections begin to expire.
Merck Chief Executive Robert Davis previously said the company had been building a “patent wall” through new indications and combination therapies to extend protection for the drug.
J.P. Morgan analysts described the latest findings as “highly encouraging.”
Although the analysts noted that Keytruda monotherapy is not the global standard of care, they said “The data is nonetheless solid.”
Merck and Kelun-Biotech first partnered in 2022 through an exclusive licensing agreement focused on developing antibody-drug conjugates for cancer treatment.
The agreement also included a $100 million equity investment by Merck in the Chinese biotech company.
European regulators back bladder cancer treatment
Additional momentum came after the European Medicines Agency’s Committee for Medicinal Products for Human Use recommended approval of the Keytruda and Padcev combination for adults with resectable muscle-invasive bladder cancer who are ineligible for cisplatin-based chemotherapy.
If approved by the European Commission, the regimen would become the first PD-1 inhibitor and antibody-drug conjugate combination available in the European Union for that patient group.
The recommendation was based on results from the Phase 3 KEYNOTE-905 trial.
According to Merck, the treatment combination reduced the risk of disease progression or recurrence by approximately 60% while lowering the risk of death by around 50% compared with surgery alone.
Patients receiving the combination also demonstrated substantially higher complete tumor response rates.
Merck said the results address a major unmet need for patients unable to receive cisplatin-based chemotherapy, who currently face limited treatment options and elevated risks of recurrence.
A final decision from the European Commission is expected during the third quarter of 2026.
Oncology pipeline remains central to growth strategy
The latest developments underscore Merck’s broader effort to strengthen its oncology portfolio as competition intensifies across the pharmaceutical industry.
In addition to Keytruda-related programs, Merck continues expanding research efforts across lung cancer, colorectal cancer, chronic kidney disease, and hepatitis markets.
The company is also expected to present additional oncology data at the upcoming American Society of Clinical Oncology Annual Meeting, an event closely watched by investors and industry analysts.
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