Can Merck’s $11.5 Billion Bet on Sotatercept Spark the Next 'Keytruda' in Pulmonary Arterial Hypertension?

As the MNCs released their 2023 half-year financial reports, it can be seen that Humira has stepped down from its pedestal, with its sales in H1 2023 shrinking to 7.5 billion US dollars; meanwhile, Keytruda has ascended to the top as the "king of drugs," achieving an astonishing H1 sales figure of 12 billion US dollars.

But the existence of the patent cliff determines that there is no eternal "king of drugs" in the pharmaceutical world. Although Keytruda will not face the challenge of patent expiration until 2028, MSD will not sit idle.

"I'm no longer focused on the 2028 Keytruda patent cliff but am considering how to achieve continued growth over the next decade," said Rob Davis, CEO of MSD, reiterating his long-term vision during the Q1 2023 earnings call.

In terms of timeline, Rob Davis is focused on MSD's development from now until 2033, by which time Keytruda will have been off patent for five years.Spatially, Rob Davis focuses on broader therapeutic areas beyond immuno-oncology.

On August 1, MSD announced in its 2023 H1 financial report that it had submitted a Biologics License Application (BLA) to the FDA for sotatercept (MK-7962) for the treatment of pulmonary arterial hypertension (PAH).

MSD's Chief Medical Officer Eliav Barr expressed excitement about the company's clinical-stage PAH drug. In September 2021, MSD reached an $11.5 billion acquisition agreement with Acceleron, gaining access to the key investigational pipeline drug sotatercept and a marketed drug. Sotatercept has already received Breakthrough Therapy Designation from the FDA. Notably,This is also the first PAH drug to receive this designation since the FDA's Breakthrough Therapy registration pathway was established in 2012.Previously, sotatercept was listed by Evaluate as one of the top ten potential blockbuster therapies expected to be approved in 2023. Among these potential blockbusters, Leqembi (Alzheimer's disease), Syfovre (GA), and Arexvy (RSV) have already been approved this year.

Eliav Barr described sotatercept as a "Keytruda-like" drug,And indicated that the company is currently testing the drug at different stages of the PAH disease process. "When you have something truly unique and distinctive, it's all or nothing."

Can the heavy-hitting therapy sotatercept lead the PAH market into a new era? What opportunities are there to be uncovered in this era?

Few new drug development projects can attract global attention like Keytruda.

Keytruda was initially used to treat PD-L1 high-expression non-small cell lung cancer (NSCLC), but this was just the beginning. Since the essence of Keytruda (K药) is to inhibit PD-1 immune checkpoint, any cancer that attempts to evade immune cells through PD-L1 can potentially become an indication for K药. This has led to an increasing number of diseases that it can be applied to. The number of indications approved by the U.S. FDA for K药 has exceeded 30, and in China, as of January 2023, 10 indications have been approved.

The core reason why K drug became the leader in PD-1 inhibitors is that it successfully won the battle for first-line therapy in its key indication, NSCLC, in 2018. After this, K drug really took off, and from 2019 to 2021, it secured a large number of new indications. It’s not hard to see that for new drug projects in the same field, the growth of product revenue is often positively correlated with the expansion of indications. The layout of indications a drug can secure will largely influence the revenue ceiling of that drug.

With K drug as a precedent, sotatercept, described by Barr as a "K-like drug," is currently only undergoing clinical trials for PAH.But obviously, MSD's ambition will not be limited to PAH.

PAH is a rare, progressive, and life-threatening cardiovascular disease, characterized by proliferative remodeling of small pulmonary arteries and gradual narrowing of the lumen. International epidemiological data show that the incidence rate of PAH in adults is about 2.4 million people per year, with a prevalence rate of approximately 15-30 per million. It is estimated that there were about 40 million PAH patients globally in 2021, with a five-year mortality rate as high as 43%.Currently, existing PAH therapies on the market can alleviate patients' conditions by promoting pulmonary vasodilation but fail to fundamentally address the issue of pulmonary vascular remodeling.

▲ Commonly Used Targeted Drugs for PAH Treatment

It is estimated that by 2030, the global pulmonary arterial hypertension treatment market is expected to reach nearly$11 billionGlobal Data cardiovascular and metabolic diseases analyst Akash Patel stated that although the current market size of PAH may not be large compared to other markets, there is still a huge gap waiting to be tapped. "Developing a treatment that targets the pathogenesis of the disease and has good safety could potentially capture a market share of over $2 billion in the long term, which would be a very significant revenue stream for any pharmaceutical company that can dominate this field."

At the same time, while the market size of PAH is not huge, other forms of pulmonary hypertension are not the same. Pulmonary hypertension is associated with lung diseases, and more than 10% of people over the age of 40 suffer from lung diseases.Pulmonary HypertensionIt is a more severe disease than PAH, affecting millions of patients, and may be the next indication area MSD chooses for sotatercept.In principle, drugs that can control vascular contraction in PAH may be expanded for use in these more common and profitable related indications.

▲ Potential New Drugs for Treating PAH (Data Source: The Future of PAH Treatment. Advances in Pulmonary Hypertension)

The focus of current research on PAH is to fundamentally address the issue of pulmonary vascular remodeling.Drugs targeting ACVR2A are a potentially effective approach to reverse pulmonary vascular remodeling.Sotatercept is a potential "first-in-class" type IIA activin receptor (ActRIIA) fusion protein., selectively binds to TGF-β superfamily ligands, restoring the balance between pro-proliferative and anti-proliferative signaling pathways associated with pulmonary artery wall and right ventricular remodeling, thereby inhibiting cell proliferation, reversing vascular remodeling, and promoting vascular patency.

In October 2022, the Phase III STELLAR study of sotatercept for PAH achieved positive results, meeting the primary endpoint and multiple secondary endpoints. In February this year, Timothy Anderson, a pharmaceutical industry analyst at Wolfe Research, estimated based on the company’s database and upcoming data to be presented at ACC that sales of sotatercept could reach $2 billion by 2030.

The focus of the PAH trial is to improve the distance walked by treated patients in six minutes (6MWD).

Joerg Koglin, Vice President of Global Clinical Development for Cardiovascular at MSD, believes thatSotatercept can effectively reverse the disease"In preclinical studies, the blood vessels of treated patients essentially looked no different from normal vessels," Koglin said, "I personally have never seen such a reversal of pulmonary vascular remodeling at its root cause."

Data released in March this year at the American College of Cardiology annual meeting showed that sotatercept significantly increased the distance patients could walk in six minutes. Of the nine secondary endpoints, eight achieved statistically significant improvements. At week 24 of treatment, the 6-minute walking distance (6MWD) of patients in the sotatercept group increased by 34.4 meters from baseline, compared to only 1.0 meter in the placebo group, reducing the risk of disease worsening and death. The BLA for sotatercept is based on the positive results of the Phase III STELLAR study.

Although there are not many drug pipelines currently targeting ActRIIA, some companies are closely following in the footsteps of sotatercept, making early plans in this niche yet-to-be-heated blue ocean.

▲ Targeted ActRIIA Drug Pipeline

Although sotatercept is currently the most advanced PAH drug in development and has the best chance of being approved soon, the targets a single drug can address are limited, leaving room for other biotech companies to develop.

PDGFR, CSF1R, and c-KIT kinase pathways play a critical role in driving inflammation, proliferation, and fibrosis in pulmonary vascular remodeling in PAH.Seralutinib is a tyrosine kinase inhibitor targeting PDGFRα/β developed by Gossamer Bio., aiming to block the inflammation, proliferation, and fibrosis that cause PAH.

On May 9, Gossamer Bio announced a restructuring plan while disclosing its first-quarter earnings.The company has cut all other clinical and preclinical programs to focus全力 on developing its lead candidate drug seralutinib for the treatment of pulmonary arterial hypertension.Faheem Hasnain, co-founder, CEO, and chairman of Gossamer Bio, stated that making such a restructuring decision was extremely difficult, "but it is also a necessary step to focus the company on its most promising projects and maximize the potential of seralutinib."

On July 22, Gossamer Bio announced that it had completed a $210 million financing. The proceeds will be used for the continued development and commercialization of seralutinib, working capital, and general corporate purposes. Gossamer plans to initiate a pivotal Phase III clinical trial for seralutinib in the third quarter of this year.

In addition to traditional targeted drugs, other innovative methods are also being studied for the treatment of pulmonary arterial hypertension (PAH). Since specific gene mutations are associated with hereditary PAH and account for 6% to 10% of all PAH cases, gene therapy offers an effective approach to directly correct abnormal genes and restore the balance between proliferation and apoptosis. In July 2022, research indicated that Apela gene therapy can suppress pulmonary small artery vascular remodeling in PAH rats, reduce pulmonary artery pressure, and the apelinergic system may be a potential new target for the prevention and treatment of PAH.

Combining Stem Cell Technology and Gene Modification: A New Approach to PAH Treatment ExplorationIn June 2022, Professor Hansmann and Professor Ralf Hass from Hannover Medical School (MHH) applied a novel stem cell therapy, administering five treatments of human umbilical cord mesenchymal stem cells to a patient with severe pulmonary arterial hypertension (PAH). For the first time, this successfully halted the typically fatal progression of PAH.

Research on the microbiome may reveal new mechanisms and therapeutic targets in pulmonary arterial hypertension (PAH). Studies have shown that the microbiome of PAH patients exhibits reduced α-diversity, with substances associated with trimethylamine oxide increased in high-risk PAH patients, while species associated with anti-inflammatory metabolites are decreased. Based on these data, a Phase I trial (NCT04884971) is currently evaluating the safety of microbiome transplantation in PAH patients.

Despite significant advances in the treatment of PAH over the past two decades, the fundamental issue of pulmonary vascular remodeling remains unresolved. In addition to existing therapies, novel approaches such as targeting ActRIIA, tyrosine kinase signaling pathways, and even gene therapy aimed at pulmonary vascular remodeling are under development at various stages. In China, some companies have also set their sights on this largely untapped field, but most are focused on replicating already marketed drugs while neglecting independent research and development.To secure a place in the PAH market, which holds enormous potential for the future, the development of innovative therapies cannot be overlooked.

References:

Jennifer L. Keen, Nadine Al-Naamani, Corey E. Ventetuolo; The Future of PAH Treatment. Advances in Pulmonary Hypertension 1 January 2023; 22 (1): 55–61

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