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Keytruda: Merck’s Key Growth Driver in Fiscal 2019

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Keytruda’s growth trends

In its first-quarter conference call, Merck (MRK) highlighted that Keytruda was approved in 18 indications across 11 tumor types and in one indication covering MSI-high (microsatellite-instability high) patients across all tumors. In fiscal 2019, Keytruda continued to see solid uptake in first-line NSCLC (non-small cell lung cancer), both as a monotherapy and as a part of a combination regimen with chemotherapy agents. 

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Demand for Keytruda was robust in other approved indications, such as head and neck cancer, bladder cancer, melanoma, and MSI-high tumors. The drug has been expanded to utilization in adjuvant melanoma and renal cell carcinoma. Solid demand, label expansion, and geographic market expansion are expected to drive Keytruda’s revenue growth in fiscal 2019.

Revenue growth trajectory

In the first quarter, Keytruda revenue rose 55% YoY (year-over-year) on a reported basis and 60% on CC (constant-currency) basis to $2.27 billion. In fiscal 2018, it rose 88% YoY on a reported and CC basis to $7.17 billion.

Merck stated in its conference call that increased penetration of Keytruda-chemotherapy combination regimens, both in squamous and non-squamous NSCLC indications, was the key factor driving uptake of the drug in US markets in the first quarter. The company anticipates a favorable response to Keytruda’s recent approval for adjuvant melanoma in future quarters.

Keytruda’s demand as part of combination regimens with chemotherapy in certain European markets has been solid after it secured regulatory and reimbursement approval in non-squamous NSCLC. In fiscal 2019, the company expects more reimbursement approvals in Europe, and is set to launch Keytruda-chemotherapy regimens in first-line metastatic squamous NSCLC in the region.

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