Royalty Pharma bets Merck's schizophrenia drug can go where Pfizer, Takeda and Lundbeck's couldn't - Endpoints News

Mer­ck, the third-largest phar­ma R&D spender in 2021, has en­list­ed out­side help in fund­ing its mid-stage schiz­o­phre­nia pro­gram as the Big Phar­ma looks to fol­low in the foot­steps of Karuna Ther­a­peu­tics' late-stage tri­al suc­cess in the CNS dis­or­der and its im­me­di­ate fi­nanc­ing haul.

The New Jer­sey drug­mak­er is team­ing up with Pablo Legor­re­ta's roy­al­ty buy­er, plain­ly named Roy­al­ty Phar­ma, in a deal that sees Mer­ck get $50 mil­lion for the on­go­ing Phase IIb of MK-8189, which is be­ing stud­ied as a treat­ment for hal­lu­ci­na­tions, psy­chosis and oth­er pos­i­tive symp­toms as­so­ci­at­ed with schiz­o­phre­nia in pa­tients with acute episodes.

If the drug makes it in­to Phase III — a tough task, as ev­i­denced by mul­ti­ple mid-stage flops in re­cent years — then Roy­al­ty could dole out an­oth­er $375 mil­lion to co-bankroll the piv­otal study. The mid-stage read­out is like­ly to hap­pen to­ward the end of 2023 or ear­ly 2024.

Af­ter study­ing a sin­gle, 4 mg dose in a Phase IIa with 224 pa­tients, Mer­ck kicked off the Phase IIb in De­cem­ber 2020 and plans to en­roll 576 peo­ple in the tri­al. This time around, Mer­ck is in­ves­ti­gat­ing three dos­es of the oral tablet — 8 mg, 16 mg and 24 mg — and com­par­ing it to place­bo and risperi­done, a med for treat­ing schiz­o­phre­nia, bipo­lar dis­or­der and ir­ri­tabil­i­ty.

Pa­tients re­main on the drug for 12 weeks. Clin­i­cal in­ves­ti­ga­tors are ob­serv­ing the drug's im­pact based on a 30-item scale known as the Pos­i­tive and Neg­a­tive Syn­drome Scale, or PANSS, which rates each of the 30 items from 1 to 7, with the lat­ter rep­re­sent­ing the ex­treme.

The fund­ing in­fu­sion comes two months af­ter Karuna Ther­a­peu­tics re­port­ed a late-stage win in schiz­o­phre­nia, large­ly un­heard of these days in drug R&D. With the da­ta on KarXT and plans to sub­mit for ap­proval in mid-2023, the com­pa­ny im­me­di­ate­ly went to the mar­ket and raised more than a half-bil­lion dol­lars. A com­peti­tor, al­beit be­hind in de­vel­op­ment stages, se­cured fi­nanc­ing on the backs of Karuna's da­ta as well.

Mer­ck is hop­ing to go where Pfiz­er, Take­da and Lund­beck were un­able to with a phos­pho­di­esterase 10A in­hibitor, or PDE10A. The aim is to tar­get an en­zyme that could help re­tune the body's neu­ro­trans­mit­ter dopamine.

Pfiz­er ter­mi­nat­ed a few mid-stage stud­ies of its drug, PF-02545920, in­clud­ing ones in schiz­o­phre­nia and Hunt­ing­ton's dis­ease, af­ter de­ter­min­ing ef­fi­ca­cy would un­like­ly be met. Pfiz­er ditched the pro­gram in a 2017 pipeline culling.

Lund­beck ter­mi­nat­ed two Phase II stud­ies of its own PDE10A in­hibitor around 2020.

Sim­i­lar­ly, Take­da wiped its as­set, TAK-063, from the pipeline af­ter a Phase II study — in pa­tients with an acute ex­ac­er­ba­tion of schiz­o­phre­nia — re­port­ed a P-val­ue of 0.115 on PANSS.

Mer­ck thinks its drug can al­so re­duce body weight, as some stud­ies have found peo­ple with the CNS dis­or­der have high­er body mass in­dex­es.

Michael Egan, a 17-year Mer­ck vet­er­an and VP for neu­ro­science glob­al clin­i­cal de­vel­op­ment, called the deal a "cre­ative agree­ment" in the press re­lease. As did Legor­re­ta.

"We are al­ways look­ing for ways to op­ti­mize our R&D spend­ing to en­sure we are able to pur­sue the broad­est set of op­por­tu­ni­ties and gen­er­ate the high­est pos­si­ble re­turns," a Mer­ck spokesper­son said in an emailed state­ment to End­points News. "This trans­ac­tion al­lows us to ef­fi­cient­ly scale up the PDE10 de­vel­op­ment pro­gram to oth­er in­di­ca­tions tar­get­ing ar­eas of sig­nif­i­cant un­met med­ical need, share de­vel­op­ment risk, and en­able in­vest­ment in the oth­er sig­nif­i­cant op­por­tu­ni­ties in our pipeline."

Il­lus­tra­tion: As­sis­tant ed­i­tor Kathy Wong for End­points News

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The Big Phar­ma is tap­ping in­to a be­he­moth in the roy­al­ties mar­ket, as Legor­re­ta's 26-year-old firm claims to have more than 45 drugs in its port­fo­lio. They tout block­buster sta­tus for 14 of those.

Roy­al­ty's am­bi­tions in­clude dish­ing out $10 bil­lion to $12 bil­lion in the next five years for late-stage or ap­proved prod­ucts.

This is not the first time Roy­al­ty has linked up around a Mer­ck-in­volved as­set. Ai­Curis sold par­tial roy­al­ty in­ter­est for Pre­vymis, an ap­proved pre­ven­tion for cy­tomegalovirus in­fec­tion, for $220 mil­lion in 2020. There's al­so di­a­betes med Janu­via, ro­tavirus vac­cine Ro­taTeq, and the rheuma­toid arthri­tis and ul­cer­a­tive col­i­tis med Rem­i­cade.