Keytruda: The New Blockbuster of Merck’s Immuno-Oncology Franchise




Keytruda, a prescription medicine classified under Merck & Co.’s (MRK) Immuno-Oncology franchise, is used to treat non-small cell lung cancer as well as melanoma, which is a type of skin cancer.

Merck launched Keytruda in 4Q14 and reported global sales of $356 million for 3Q16, resulting in revenue growth exceeding 100% compared to $159 million in 3Q15. The US market contributed ~52.8% of total Keytruda sales during 3Q16.

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Keytruda is used for the treatment of melanoma, a type of skin cancer, when melanoma has spread or cannot be removed by surgery (advanced melanoma), the medicine ipilimumab did not work or is no longer working, and the tumor has an abnormal BRAF gene and the BRAF inhibitor did not work.

Keytruda is also used for non-small cell lung cancer (or NSCLC) when cancer has spread and tests positive for PD-L1, chemotherapy containing platinum does not work, and the tumor has an abnormal EGFR or ALK gene, but EGFR or ALK inhibitors did not work.

Recently, the FDA approved the supplemental Biologics License Application (or sBLA) for Keytruda, for use as the first-line treatment for patients with metastatic NSCLC with high PD-L1 expressions, but no EGFR or ALK gene abnormalities.

Keytruda is also approved for the treatment of recurrent or metastatic squamous cell carcinoma of head and neck (or HNSCC) for patients who have undergone platinum-contained chemotherapy.

Geographical reach

In the US, Keytruda has ~70% of anti-PD-1 patient share in melanoma and is the number-one therapy for melanoma in the US across all classes of treatment.

Outside the US market, Keytruda is launching in around 40 markets, including the European Union. Keytruda is approved for advanced first-line and second-line melanoma in the EU.

Overall, Keytruda’s clinical development program studies for more than 30 tumor types in more than 160 clinical trials, including more than 80 combinations of Keytruda with other cancer treatments.

Some of the EGFR inhibitors used to treat various types of cancer include Iressa from AstraZeneca (AZN), Tarceva from Astellas Pharma (ALPMY), Tykerb from Novartis (NVS), Erbitux from Eli Lilly (LLY), and Vectibix from Amgen (AMGN).

Investors can consider funds like the VanEck Vectors Pharmaceutical ETF (PPH), which holds ~5.3% of its total assets in Merck, in order to divest anystock-specific risk.


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