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How Merck’s Isentress Is Expected to Perform in 2017

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Revenue trends for Isentress

In 2016, Merck’s (MRK) Isentress reported revenues of ~$1.4 billion, which reflected an ~8% decline year-over-year (or YoY). The company witnessed a loss of ~2% in the drug’s revenues due to the unfavorable impact of foreign exchange fluctuations.

The decline in sales volume in the US and Europe, coupled with pricing pressures in Europe, led to a decline in the drug’s net revenues in 2016. The high demand for the drug in emerging markets, however, has partially offset the decline in revenues in the US and Europe.

In 1Q17, Isentress generated revenues of around $305 million, which reflected an ~10% decline on a YoY basis and an ~9% decline on a quarter-over-quarter basis.

The above graph represents the revenue curve of Isentress from 1Q16 to 1Q17.

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About Isentress

Isentress (raltegravir) is an integrase strand transfer inhibitor used in combination with other anti-retroviral drugs for the treatment of patients with HIV-1.

In May 2017, the European Medical Agency (or EMA), through its Committee for Medicinal Products for Human Use (or CHMP), presented a positive opinion for Merck’s Isentress (600 mg film-coated tablets). This opinion recommended the approval of the drug for the treatment of patients with HIV-1 along with other anti-retroviral therapy. The regulatory approval could boost the drug’s sales in Europe.

In May 2017, the FDA approved Isentress HD, a novel 1200 mg once-daily dose regimen, along with other anti-retroviral drugs for the treatment of patients with HIV-1. The FDA approved the new dose regimen based on the phase 3 ONCEMRK trial.

At week 48 in the phase 3 ONCEMRK trial, 89% of treatment-naïve patients receiving Isentress HD demonstrated viral suppression compared to 88% of patients receiving Isentress 400 mg twice-a-day therapy. Both groups of patients were administered with emtricitabine and tenofovirdisoproxil fumarate along with respective doses of Isentress.

Merck’s Isentress faces stiff competition from Gilead Sciences’ (GILD) Truvada, Atripla, Stribild Johnson & Johnson’s (JNJ) Prezista, and GlaxoSmithKline’s (GSK) Triumeq. The Vanguard S&P 500 ETF (VOO) invests 0.70% of its total portfolio holdings in Merck & Co.

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