Merck MRK decided to discontinue two clinical development programs, namely KeyVibe and KEYFORM, which are evaluating its investigational cancer drugs vibostolimab and favezelimab, respectively.

Merck’s decision followed a series of setbacks for both drugs, which were being tested in combination with its blockbuster drug Keytruda for various cancer indications across multiple late-stage studies. After a detailed review of data from the clinical studies on both drugs, management has decided to focus on its other ongoing pipeline programs.

Merck Halts Vibostolimab Development for Futility

Merck’s decision to discontinue development on vibostolimab is based on a pre-planned analysis of data from the two phase III studies, KeyVibe-003 and KeyVibe-007, conducted by an independent data monitoring committee (IDMC). These studies evaluated the combination of vibostolimab and Keytruda in certain patients with non-small cell lung cancer (NSCLC) compared to Keytruda alone.

The IDMC pointed out that both studies met the pre-specified futility criteria, which suggests that treatment with the combination is unlikely to achieve their respective primary endpoints.

This is not the first setback faced by Merck for the Keytruda-vibostolimab combination. In August, management discontinued the late-stage KeyVibe-008 study, which evaluated this combination for the first-line treatment of patients with extensive-stage small cell lung cancer (ES-SCLC). Like the above studies, an IDMC pointed out that the study was unlikely to meet its primary endpoint.

MRK Ceases Favezelimab Development After Data Review

Management’s decision to end the development of favezelimab came after a comprehensive review of the data from the KEYFORM program. Based on this review, Merck decided to end all studies related to the drug, including the phase III KEYFORM-008 study evaluating the combination of favezelimab and Keytruda in certain patients with Hodgkin lymphoma. However, study participants who have already enrolled in the KEYFORM-008 study can choose to receive treatment with this combination until the completion of the study.

This decision to discontinue favezelimab development came a few months after Merck reported that the late-stage KEYFORM-007 study evaluating the favezelimab-Keytruda combination in certain patients with colorectal cancer failed to meet the primary endpoint.

MRK Stock Performance

Year to date, Merck’s shares have lost 8.3% against the industry’s 6.3% growth.

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Keytruda: A Key Revenue Driver for MRK

Keytruda is the biggest product in Merck’s portfolio. The drug has played an instrumental role in driving Merck’s steady revenue growth in the past few years. Keytruda sales continue to grow year over year as well as sequentially. The drug generated sales of more than $21 billion in the first nine months of 2024.

Keytruda sales benefited from rapid uptake across earlier-stage indications in triple-negative breast cancer, renal cell carcinoma and NSCLC. Continued strong momentum in metastatic indications also boosted sales growth.

This is one of the most successful cancer drugs ever and considered a market leader for treating NSCLC. Keytruda is already approved for treating many cancers globally and accounts for almost 45% of Merck’s total revenues. However, Keytruda patents are set to lose exclusivity post 2028.

MRK’s Zacks Rank

Merck currently carries a Zacks Rank #3 (Hold).

Merck & Co., Inc. Price

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Our Key Picks Among Biotech Stocks

Some better-ranked stocks from the sector are Castle Biosciences CSTL, CytomX Therapeutics CTMX and Spero Therapeutics SPRO, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bottom-line estimates for Castle Biosciences have improved from a loss of 58 cents per share to earnings of 34 cents for 2024 in the past 60 days. During the same timeframe, loss per share estimates for 2025 have narrowed from $2.13 to $1.84. Year to date, shares of Castle Biosciences have surged 33.6%.

CSTL’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 172.72%.

In the past 60 days, estimates for CytomX Therapeutics’ 2024 loss per share have narrowed from 29 cents to 5 cents. Estimates for 2025 loss per share have narrowed from 56 cents to 35 cents during the same timeframe. Year to date, CTMX stock has lost 25.8%.

CytomX’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 115.70%.

In the past 60 days, estimates for Spero Therapeutics’ 2024 loss per share have narrowed from $1.59 to $1.29. Estimates for 2025 loss per share have narrowed from $1.54 to 79 cents during the same timeframe. Year to date, Spero’s shares have lost 27.2%.

SPRO’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 94.42%.

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