What is Merck preparing to follow Keytruda?

  • Citi believes Merck’s oncology strategy after the end of Keytruda’s exclusivity is increasingly focused on two platforms: the antibody-drug conjugate sac-TMT and intismeran autogene (INT), a personalized neoantigen therapy developed with Moderna. Both could launch in 2027.
  • INT has been validated in a Phase III trial as an adjuvant treatment for melanoma; Citi views sac-TMT as a candidate with the potential to become a core product franchise. Citi sees the progress as encouraging but insufficient to fully dispel concerns about the end of Keytruda’s exclusivity, and maintains its Neutral rating and 145-dollar price target.

How far is sac-TMT from its first approval?

  • The US FDA has accepted a biologics license application for sac-TMT in advanced endometrial cancer and granted it priority review, with a Prescription Drug User Fee Act review target date of 15 June 2027. Management expressed confidence in the strength and maturity of the data, citing, among other reasons, the consistency between earlier Chinese study results and those of the global Phase III TroFuse-005 trial.
  • Citi believes the extensive clinical development program gives sac-TMT potential beyond endometrial cancer, but expansion into other indications still requires support from more late-stage clinical results.

Why is the kidney cancer trial particularly important for INT?

  • Merck chose renal cell carcinoma (RCC) to test whether INT can be used in tumors that respond to immuno-oncology therapy but have traditionally not been regarded as having high neoantigen expression. The company said its work identifying neoantigens in kidney tumors has been quite successful, but efficacy remains to be demonstrated clinically.
  • Citi sees RCC as the most important platform proof-of-concept readout after melanoma: the results bear on both the commercial opportunity in this indication and whether INT can be applied to a broader range of cancers. Management is more cautious about extrapolating existing success to other indications, while still planning to broadly assess the therapy’s commercial potential.

How do combination treatment plans broaden sac-TMT’s development?

  • Merck plans to test sac-TMT in combination with drugs including MK-2010. MK-2010 is a bispecific antibody targeting PD-1 and VEGF, which Citi views as a candidate backbone drug for next-generation combination therapies.
  • The company plans to start a Phase III study of MK-2010 in the first half of 2027 and said its discussions with the FDA have been productive; management also said combination development of MK-2010 will extend beyond sac-TMT, with several Phase II programs already underway.