Merck KGaA, GSK suffer lung cancer drug setback

By Ludwig Burger

FRANKFURT (Reuters) - Merck KGaA's drug development programme has suffered a setback with the most important clinical trial of its cancer drug hopeful bintrafusp alfa stopped because the treatment does not appear to work.

The halt also puts a damper on the oncology ambitions of Britain's GlaxoSmithKline, which is co-developing the drug with Merck under a 2019 agreement that could have seen it pay up to 3.7 billion euros ($4.5 billion) to the German company.

In a statement on Wednesday, Merck KGaA said the late-stage trial dubbed INTR@PID Lung 037, testing the novel drug against U.S. namesake Merck & Co's bestseller Keytruda in newly diagnosed cases of a certain type of lung cancer, would be discontinued.

It said independent supervisors concluded the drug was unlikely to show the desired efficacy.

Merck KGaA's shares dropped as much as 7% but had pared losses to trade 3.3% lower at 1355 GMT.

Keytruda dominates a class of immunotherapies known as checkpoint inhibitors, and is expected to generate $17 billion in revenues this year.

Merck KGaA and Merck & Co Inc, known as MSD outside North America, share historic roots but have been under separate ownership since World War One.

The bintrafusp alfa drug is a so-called fusion protein designed to trigger both checkpoint inhibition and another immune response booster known as TGF-beta-inhibtion.

While several other experimental drugs are based on TGF-beta-inhibtion, the combination is a unique approach in the pharma industry.

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(Reporting by Ludwig Burger; editing by Thomas Seythal, Kirsten Donovan)