Merck & Co. Inc. MRK and Johnson & Johnson JNJ announced that the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) has given a positive opinion in favor of expanding Simponi’s label in the EU.
Simponi is under review in the EU for the treatment of adult patients suffering from severe, active non-radiographic axial spondyloarthritis (nr-axial SpA) with objective signs of inflammation as indicated by elevated C-reactive protein and/or magnetic resonance imaging evidence. These patients have also had an inadequate response to, or are intolerant to, nonsteroidal anti-inflammatory drugs.
The favorable opinion of the CHMP will now be reviewed by the European Commission. With the CHMP issuing a positive opinion, we believe chances of Simponi gaining EU approval are high. A decision should be out in the third quarter.
We note that Simponi is currently approved in the EU for the treatment of patients suffering from moderate-to-severe active rheumatoid arthritis, active and severe psoriatic arthritis, ankylosing spondylitis and moderately to severely active ulcerative colitis who have had an inadequate response to conventional therapy.
Merck recorded Simponi revenues of $689 million in 2014, reflecting an increase of 38%. Approval would further increase the drug’s sales potential. We remind investors that Merck has an agreement with Johnson & Johnson’s Janssen Biotech Inc. for Simponi’s marketing in Europe, Russia and Turkey.
Currently prescribed treatments for nr-axial SpA include AbbVie’s ABBV Humira.
Merck currently carries a Zacks Rank #3 (Hold). Gilead Sciences Inc. GILD is a better-ranked stock in the health care sector carrying a Zacks Rank #1 (Strong Buy).
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