BUZZ - Brokerage Opinion: Merck’s ophthalmic drug shows efficacy comparable to Roche therapy, analysts remain cautious

October 12 - ** Merck (Merck, MRK.N) said on Saturday that in a late-stage clinical trial for patients with diabetic macular edema, its experimental ophthalmic drug remigromig showed similar effectiveness in improving vision as Roche's (ROPC.S) Lucentis. Diabetic macular edema is a diabetes-related disease that can lead to vision loss.

** After one year of treatment with remigromig, patients improved by 8.7 to 9.1 letters on standard vision tests, compared to an 11.8 letter improvement for those on Lucentis, meeting the study's non-inferiority endpoint.

Not a clear product win?

** Jefferies (maintains "Buy" rating, target price: $176) noted the study data was "less impressive than the preliminary results," citing the numerically lower gains in vision compared to Lucentis (link), lack of subgroup data on previously treated patients, and a higher treatment discontinuation rate.

** BMO Capital Markets ("Outperform," target price: $170) stated the study confirmed efficacy but that the "results are not sufficient to demonstrate significant differentiation," adding that "not every business development deal (link) yields a commercially successful asset."

** Barclays ("Neutral," target price: $150) said the study did not show an advantage for remigromig in patients with suboptimal VEGF therapy response or when used in combination with such therapies, so commercial differentiation has yet to be demonstrated.

** Jefferies also noted that remigromig helps enrich Merck’s R&D pipeline but is “not a clear blockbuster,” and lowered its risk-adjusted sales forecast for the drug from $750 million to about $300 million.

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