) recently announced that its biologic drug, Remicade, received a
positive opinion from the European Medicines Agency's (EMA)
Committee for Medicinal Products for Human Use (
) for the treatment of severely active ulcerative colitis (UC) in
pediatric patients (ages 6 to 17 years).
The CHMP recommended the use of Remicade in pediatric patients
who have not responded sufficiently to conventional therapy,
including corticosteroids and 6-mercaptopurine or azathioprine, or
who are unable to opt for conventional therapy due to intolerance
or medical contraindications.
The recommendation was based on data from a phase III
multicenter, randomized, open-label, parallel-group study that was
conducted to evaluate the efficacy and safety of Remicade.
A final decision should be out in the first quarter of 2012. A
positive decision would make Remicade the first and only biologic
therapy approved in the EU for the treatment of pediatric UC.
Remicade is already approved in the EU for several indications
like the treatment of moderately to severely active UC in adults,
severely active Crohn's disease and moderately to severely active
pediatric Crohn's disease.
Remicade became a part of Merck's portfolio following its merger
with Schering-Plough in 2009. Originally,
Johnson & Johnson
) had licensed ex-US rights of Remicade and another product,
Simponi, to Schering-Plough. Both compounds were developed by
Johnson & Johnson. However, in May 2009, Johnson & Johnson
announced an arbitration demand against Merck requesting a ruling
regarding the ex-US rights of Remicade and Simponi. According to
Johnson & Johnson, the merger between Merck and Schering-Plough
triggered a change-of-control provision in the original agreement,
resulting in its termination. Therefore, Johnson & Johnson
asserted that full rights to both drugs should be returned to
In April 2011, the companies settled the dispute and amended the
terms of the agreement. While Merck gave up exclusive marketing
rights for Remicade and Simponi to Johnson & Johnson in
territories including Canada, Central and South America, the Middle
East, Africa and Asia Pacific, the company retained exclusive
marketing rights throughout Europe, Russia and Turkey.
Merck recognized Remicade sales of $561 million in the third
quarter of 2011. Approval for the pediatric indication should help
drive sales. We note that Remicade gained approval in the US in
September 2011 for the treatment of moderately to severely active
ulcerative colitis in pediatric patients who have not responded
adequately to conventional therapy .
Neutral on Merck
We currently have a Neutral recommendation on Merck, which
carries a Zacks #3 Rank (short-term Hold rating). While headwinds
remain in the form of patent expirations of key drugs, EU pricing
pressure, US health care reform, and pipeline setbacks, some of the
company's recent launches should start contributing
significantly to the top line in the forthcoming quarters.
JOHNSON & JOHNS (
): Free Stock Analysis Report
MERCK & CO INC (
): Free Stock Analysis Report
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