Merck KGaA Expects Core Franchises, Alliances To Strengthen In China
Executive Summary
Merck KGaA's healthcare business in China will continue to center around its fertility, general medicines and endocrinology therapies while also building on new corporate alliances there, the German conglomerate’s global operations head told Scrip.
Merck of Germany expects to keep expanding in China, helped by its buoyant core franchises in fertility treatments, hypertension, type 2 diabetes and hypothyroidism, group global operations head Chris Round told Scrip.
Merck KGaA's China strategy also includes building on its recently established manufacturing presence there, and leveraging its scientific expertise, such as in gene and cell therapy.
Providing drugs to combat the spread of type 2 diabetes in China will also remain a big part of the company's commercial operations there.
Round, a UK national, has been the head of Merck KGaA's international operations and global head of the core medicine franchises since last summer. “I basically have responsibility for everything that’s not North America and Canada,” he explained.
Global 'Bedrock Portfolio'
While top earners for Merck's healthcare division globally include multiple sclerosis therapy Rebif (interferon beta-1a) and cancer drug Erbitux (cetuximab), the German group is also a global market leader in fertility treatments as well as hypertension, type 2 diabetes and hypothyroidism. (Also see "Mavenclad Poised To Be Big Mover For Merck KGaA " - Scrip, 7 Mar, 2019.)
“General medicines and endocrinology are key drivers for our international markets and these core therapeutics have been the bedrock of Merck for many years and it’s still growing extraordinarily well,” Round told Scrip.
“We have three core general medicine assets – Glucophage or metformin for type 2 diabetes; we have Concor which is a well-positioned beta-blocker treatment for hypertension, and then there’s the levothyroxine product Euthyrox, indicated for hypothyroidism. These are our core general medicines within cardio metabolic care and general medicines.”
“Many of them we launched years ago. These are not recent innovations. But they are very well positioned, particularly in emerging markets. They’ve proven to be a bedrock of business for Merck over many years. And we had another very successful year in 2018 with the franchise," Round explained.
Support Merck China Plans
Merck has been operating in China since 1933, and today has more than 3,200 employees there. The country is the second largest market for Merck’s healthcare business worldwide, after the US.
The spreading diabetes epidemic in China has generated huge demand for Merck's drug Glucophage, a prescription drug for treating the condition developed by Merck in 1957 and which remains a core product.
"Glucophage's use has been growing in recent years, particularly in the Chinese market, so it underpins a lot of our growth in China. It’s our largest product there for the time being," Round said.
There is something like 100 million type 2 diabetics in China, of which only around 40% have been diagnosed with the disease and fewer than half of those are treated.
"So, there’s a very large number of type 2 diabetics in China. And Glucophage is now effectively the cornerstone of any treatments there," Round said, adding that, upon being diagnosed with type 2 diabetes, the first drug that a patient in China is likely to be prescribed is a metformin. product.
"There are many of metformin-based drugs but Glucophage has been around for a long time, there’s a lot of data, it’s highly regarded.
"We’re manufacturing some formulations of it in China, just outside Shanghai, as part of our overall strategy. We’re seeing volume increases that are very high. We have between 2 million and 3 million patients there taking Glucophage, but it’s a small number compared to the market," the executive said.
"We feel there’s no real constraint on how far we can grow with this drug and how far we can develop it,” Round added.
Underpin J&J Canagliflozin Pact
Hoping to build on that strength, Merck has teamed up with Johnson & Johnson's Xian Janssen Pharmaceuticals Ltd. in Beijing, to launch Invokana (canagliflozin), an innovative drug for adults with type 2 diabetes.
Through their agreement, the duo will work closely together on future development, distribution, promotion, access, marketing and sales in China of Invokana, a sodium-glucose co-transporter 2 (SGLT-2) inhibitor approved in China in September 2017 for treatment of type 2 diabetes in combination with metformin or with metformin plus sulfonylurea in adults who have not achieved adequate glycemic control on these oral therapies.
Merck will hold the exclusive rights for Invokana's promotion in China.
“This is an interesting drug in a new space. And because of our Glucophage business we have a very large diabetes commercialization operation in China so it just made sense for us to help with the commercialization of Invokana, and add a another product to Merck’s sales team there," Round said.
He said the Invokana alliance reflects Merck's strategy. "We’re often on the look out for complimentary activities on a local, regional, some times global basis that can leverage the resources that we’ve got and provide additional commercial effectiveness.”
As GenScript Alliance Inked
Another example of that approach was announced March 19 when the German group's inked a non-binding memorandum of understanding with Chinese biotech company GenScript for a strategic alliance focusing on plasmid and viral vector manufacturing.
China is the world leader in terms of where gene-modified cell therapy clinical trials are conducted. Merck said that there are more than 130 companies in China today developing cell and gene therapies ranging from chimeric antigen receptor T cell therapy (CAR-T)/T-cell receptor therapy (TCR-T) and adeno-associated virus (AAV) to oncolytic virus, according to clinicaltrials.gov.
The two parties hope their alliance will speed up the industrialization and commercialization of cell and gene therapy in China. Nanjing-based GenScript aims to create a global-standard platform of plasmid and virus manufacturing service in the country.
Merck aims to provide GenScript with comprehensive products, training and consulting services covering process design, facility concept design and quality management system set-up from lab development to large-scale GMP manufacturing.