TOP20 US stock trading volume$Merck & Co (MRK.US)$ A new formulation for its famous cancer treatment pembrolizumab (Keytruda) has been launched, marking an important milestone for the company, as its heavyweight intravenous version Keytruda will face significant regulatory hurdles. Keytruda generated sales of 25 billion dollars in 2023.

Merck stated that in a key phase 3 trial, the subcutaneous version of the anti-PD1 drug achieved its primary endpoint, with performance comparable to the FDA-approved intravenous version, making it a first-line option for lung cancer.

Although Wall Street's reaction has been relatively muted, this development signifies a crucial step for Merck in expanding market access, with this drug accounting for over 40% of the company's total sales.

Merck stated that it is preparing to submit the application for the new formulation to global regulatory agencies "as quickly as possible." Time is crucial for the New Jersey-based pharmaceutical giant as Keytruda will face significant regulatory and market resistance in the coming years.

Due to Merck losing exclusive market operation rights for the drug in the USA in 2028, with competitors racing to develop cheaper biosimilar drugs, a significant portion of its revenue will be at risk, which the company can mitigate through injectable medications.

The injectable Keytruda contains a drug delivery compound, berahyaluronidase alfa, from South Korea's biotechnology company Alteogen, which will not face competition in the short term, while the intravenous Keytruda is threatened by biosimilars.

In addition, the injectable Keytruda will be more convenient than the current intravenous infusion given to patients at infusion centers, where intravenous injections take 30 minutes every three to six weeks.

Marjorie Green, oncology clinical development lead at Merck, stated that the new version of the drug will take about 2-3 minutes, "compared to intravenous injections, it may improve the patient experience, and increase access for patients and healthcare providers."

In addition to the patent cliff, Merck is expected to face medical insurance price negotiations for intravenous Keytruda in 2028. However, the injectable version with new components may be exempt from the bargaining process, allowing the company to set pricing terms for a more convenient option.

Merck's CEO Robert Davis stated during the first quarter earnings call in 2024 that the company expects about 50% of regular Keytruda patients to switch to the injectable version by 2028. Davis added, "So we see subcutaneous injections as indeed a promising market."