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Research and Development

We conduct research and development (R&D) worldwide in order to develop new products and services designed to improve the quality of life of patients and to satisfy the needs of our customers. Further optimizing the relevance and efficiency of our research and development activities – either on our own or in cooperation with third parties – is one of our top priorities.

To address long-term health and technology trends in both established and growth markets, approximately 6,200 employees work for Merck researching innovations.

In 2016, Merck spent around ­€ 2.0 billion on research and development, thus exceeding the previous year’s level (2015: € 1.7 billion). This was due mainly to the intensified R&D activities of our Healthcare business sector. We focus on both in-house research and external collaborations, which enable us to increase the productivity of our research while simultaneously reducing financial outlay. The organizational set-up of our research and development activities reflects the structure of Merck with three business sectors.

Healthcare

Biopharma

Oncology

With regard to Erbitux®, we announced in April that the pivotal Chinese Phase III (TAILOR study) met its primary endpoint of significantly increasing progression-free survival (PFS) in patients with RAS wild-type metastatic colorectal cancer (mCRC) treated with Erbitux®(cetuximab) plus FOLFOX chemotherapy, compared with FOLFOX alone. Detailed data were presented from this first prospective study to evaluate an anti-EGFR antibody in first-­line therapy of patients with RAS wild-type mCRC at the European Society for Medical Oncology (ESMO) World Congress on Gastrointestinal Cancer in July in Barcelona. The study included 393 patients and showed that Erbitux®(cetuximab) plus FOLFOX statistically significantly improved outcomes compared to FOLFOX alone, including best overall response rate (61.1% vs. 39.5%), lowered the risk of disease progression by 31%, and decreased the risk of death by 24%. Progression-free survival was significantly improved by the combination of Erbitux®plus FOLFOX vs. FOLFOX alone (9.2 vs. 7.4 months), as was overall survival (20.7 vs. 17.8 months). These results reaffirm that Erbitux®plus FOLFOX is an effective treatment regimen for patients with RAS wild-type mCRC. As the first prospective trial evaluating Erbitux®in RAS wild-type patients, the TAILOR results show the importance of RAS biomarker testing in order to determine the appropriate targeted therapy for individual patients, based on their tumor’s genetic make-up. The safety profile of Erbitux®in this trial was manageable and similar to that observed in other pivotal trials, with no unexpected safety findings. Based on these results, we are evaluating the most appropriate way to make Erbitux®available in China as a first-line treatment for patients with RAS wild-type mCRC as soon as possible.

In April we announced that a new liquid biopsy RAS biomarker test, which we are co-developing and commercializing with Sysmex Inostics, has been granted CE Mark approval. This test will now be made widely accessible for patients with metastatic colorectal cancer in Europe, Asia, Latin America and Australia. The testing technology, OncoBEAM®RAS CRC assay can be used to determine which patients would benefit from anti-epidermal growth factor receptor (anti-EGFR) therapies, such as Erbitux®(cetuximab). The liquid biopsy RAS biomarker test is a comprehensive 34-mutation panel that is based on the BEAMing (Beads, Emulsion, Amplification and Magnetics) technology. The test only requires a small blood sample (10 ml), rather than a tissue biopsy, to determine the mutation status of tumors. The test has the potential to provide mutation status results within days, which can help guide quicker treatment decisions. Merck and Sysmex Inostics originally entered into an agreement to co-develop and commercialize the liquid biopsy test in 2014.

In January we announced that we have signed a collaboration agreement with Biocartis for the development and commercialization of a new liquid biopsy RAS biomarker test for patients with mCRC. The test will be developed on Biocartis’ innovative, fully automated molecular diagnostics system, Idylla™, which is designed to offer accurate and reliable molecular information from virtually any biological sample. The Idylla™ system is a fully automated sample-­­to-­result PCR-based (polymerase chain reaction) molecular diagnostics system. Whereas most of today’s solutions only look for the most prevalent RAS mutations, the Idylla™ RAS test will be designed to detect an extended panel of RAS mutations. The new test will also provide a BRAF V600 mutation analysis directly integrated with the Idylla™ RAS test, to allow clinicians to evaluate BRAF and RAS mutation status simultaneously. Based on a 2 ml sample of blood plasma, the test aims to provide high sensitivity and ease-of-­use, requiring less than 2 minutes of hands-on time and a turnaround time of approximately 2 hours, enabling clinical decision-­making in a timely manner. Merck and Biocartis plan to implement the Idylla™ liquid biopsy RAS test in numerous medical centers across the world, excluding the United States, China and Japan. The test was subsequently submitted for a CE Mark.

In March we announced that we had entered into a collaboration focused on cancer metabolism with the European Molecular Biology Laboratory (EMBL), located in Heidelberg, Germany. The aim of the collaboration is to investigate mechanisms by which cancer cells generate energy and growth-enabling building blocks, which could ultimately deliver novel therapeutic targets, as well as biomarkers. The collaboration will make use of EMBL’s capabilities in the area of metabolomics. During the three-year collaboration, EMBL will apply its unique expertise, combining modelling and bioinformatics with experimental approaches to investigate these metabolic pathways and shed light on their control mechanisms. EMBL will also utilize the cutting-edge equipment of its Genomics and Metabolomics Core Facilities to resolve the transcriptional and metabolic profiles of the samples for the study.

New research on Erbitux®and our pipeline compounds was presented at the Annual Meeting of the European Society for ­Medical Oncology (ESMO) in Copenhagen, Denmark, in October. Presentations focused on hard-to-treat cancers, and included study results for Erbitux®in mCRC and in squamous cell carcinoma of the head and neck (SCCHN), reaffirming Erbitux®as a standard-of-care therapy for mCRC patients with RAS wild-type tumors and patients with SCCHN. Preliminary study results were presented for our investigational product avelumab in bladder cancer, supporting its further development in this indication, as well as preliminary results from a combination study of avelumab with axitinib in renal cell carcinoma (RCC) that support the rationale to evaluate this combination in a Phase III pivotal study in RCC. Results on the investigational compound tepotinib, a highly selective c-Met kinase inhibitor, were presented on three posters, and included updates on the ongoing study program in c-Met-positive metastatic non-small cell lung cancer.

In September we commenced the clinical development of our investigational BTK inhibitor (M7583) in Oncology, with the start of our first Phase I clinical study of this compound. This first-in-human study in hematological malignancies represents a milestone of this program.

In June Merck announced jointly with Array BioPharma Inc. and Pierre Fabre the initiation of a randomized, global Phase III clinical trial of BRAF-mutant mCRC, investigating a new combination of Erbitux®plus encorafenib, with or without binimetinib. The trial, known as BEACON CRC (Binimetinib, Encorafenib And Cetuximab Combined to treat BRAF-mutant Colorectal Cancer) will assess the efficacy and safety of these two novel combinations in patients with BRAF-mutant tumors, compared with investigator’s choice of Erbitux®plus irinotecan or Erbitux®plus FOLFIRI. Approximately 650 patients are expected to be enrolled by 2018 and, after a lead-­­in period to assess the safety and tolerability of Erbitux®plus encorafenib (a BRAF inhibitor) and binimetinib (a MEK inhibitor), will be randomized to receive one of the two novel combinations, or the investigator’s choice. The primary endpoint of the trial is overall survival. Key secondary endpoints include progression-free survival, objective response rate, duration of response, safety and tolerability. The trial will also assess health-related quality of life.

Our Grant for Oncology Innovation (GOI) initiative, which awards funds for pioneering independent research in oncology, was awarded on the occasion of the ESMO meeting on October 9. There were 405 applications from 49 countries for the 2016 award. Three research teams from Italy, New Zealand and Spain were selected to share the € 1 million grant to fund their research in the areas of breast cancer, colorectal cancer and lung cancer.

Immuno-Oncology

The investigational product avelumab is our most advanced clinical development program in immuno-oncology with eight Phase III studies sponsored by the Merck-Pfizer Alliance now underway in a variety of solid tumors.

On October 31, Merck and Pfizer Inc. announced that the ­European Medicines Agency (EMA) had validated for review Merck’s Marketing Authorization Application (MAA) for avelumab, for the proposed indication of metastatic Merkel cell carcinoma (MCC). A rare and aggressive skin cancer, MCC impacts approximately 2,500 Europeans a year. Validation of the MAA confirms that submission is complete and begins the EMA’s centralized review process. If approved, avelumab, an investigational fully human anti-PD-L1 IgG1 monoclonal antibody, could be the first approved treatment indicated for metastatic MCC in the EU. Patients with metastatic MCC face a very poor prognosis, with less than 20% surviving beyond five years. Avelumab received an Orphan Drug Designation (ODD) from the European Commission for MCC. The avelumab metastatic MCC MAA submission is supported by data from JAVELIN Merkel 200, a multicenter, single-arm, open-label, Phase II study of 88 patients with metastatic MCC whose disease had progressed after at least one chemotherapy treatment. The ­JAVELIN Merkel 200 study represents the largest data set of any anti-PD-L1 / ­PD-1 antibody reported in this patient population. These data were recently published in the medical journal Lancet Oncology.

In November Merck and Pfizer Inc. announced that the U.S. Food and Drug Administration (FDA) had accepted for Priority Review the Biologics License Application (BLA) for avelumab in metastatic MCC. The application was submitted by EMD Serono, the biopharmaceutical business of Merck in the United States and Canada. This review relates to avelumab’s proposed use in patients with metastatic MCC, based on tumor response results from the JAVELIN Merkel 200 trial. The FDA’s Priority Review status reduces the review time from ten months to a goal of six months from the day of filing and is given to drugs that may offer major advances in treatment or may provide a treatment where no adequate therapy exists. The FDA previously granted avelumab Orphan Drug Designation for MCC, as well as Fast Track and Breakthrough Therapy Designations for the treatment of patients with metastatic MCC whose disease has progressed after at least one previous chemotherapy regimen. Breakthrough Therapy Designation is intended to expedite the development and review of treatments for serious or life-threatening disease where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies for one or more endpoints.

The Merck and Pfizer alliance’s presence at the 2016 American Society of Clinical Oncology (ASCO) annual meeting demonstrated how the collaboration between the two companies is making significant progress to rapidly accelerate the expansive, international development program (known as JAVELIN) for its investigational product avelumab. The program comprises 30 ongoing clinical programs assessing avelumab as monotherapy or combination therapy including nine pivotal studies, and approximately 4,000 patients across more than 15 tumor types. The data presented at ASCO 2016 contribute to the growing understanding of the potential role of avelumab in treating a broad range of cancers. In total 14 avelumab abstracts were presented (two oral presentations and 12 posters / poster discussions) across seven different cancer types.

One of the oral presentations concerned the results of JAVELIN Merkel 200 in metastatic MCC. The study showed a 31.8% objective response rate. There were 8 complete responses and 20 partial responses. Tumor responses were rapid, with 78.6% of patients (22 of 28) responding within 7 weeks of starting treatment, and durable, with 82.1% of patients (23 of 28) still responding at the time of analysis. Tumor responses were seen in patients regardless of the status of certain biomarkers (PD-L1 and Merkel cell polyomavirus). No unexpected safety signals were reported. Treatment-­related adverse events (AEs) occurred in 62 patients (70.5%); the most common were fatigue (23.9%) and infusion-related reactions (17.0%), all of which were Grade 1 or 2 in severity. Grade 3 treatment-­­related AEs were reported in four patients (4.5%).

Other highlights of the avelumab clinical program reported at ASCO included the presentation of data in adrenocortical carcinoma, gastric / gastro-esophageal junction cancer, mesothelioma, non-small cell lung cancer, ovarian cancer and urothelial (bladder) cancer. Additionally, safety data were presented from 1,300 patients enrolled in the Phase Ib JAVELIN Solid Tumor trial, the largest Phase I trial investigating an anti-PD-L1 therapy.

In April Merck and Pfizer announced the initiation of a Phase III study of avelumab in an advanced renal cell carcinoma setting. The study, JAVELIN Renal 101, is a multicenter, international, randomized, open-label Phase III trial designed to evaluate the potential superiority, assessed by the progression-free survival, of first-line avelumab combined with INLYTA®(axitinib) compared with SUTENT (sunitinib malate) monotherapy in patients with unresectable, locally advanced or metastatic RCC with clear cell component. It is the first pivotal trial investigating avelumab in combination with INLYTA®(axitinib), a tyrosine kinase inhibitor (TKI), in patients with previously untreated advanced RCC. Moreover, it is the only Phase III trial currently evaluating an anti-PD-L1 immunotherapy in combination with a vascular endothelial growth factor (VEGF)-­receptor TKI in this setting.

In July we initiated a new Phase III study evaluating avelumab as a first-line treatment for ovarian cancer. This study, known as JAVELIN Ovarian 100, is an open-label, international, multi-center, randomized trial in treatment-naïve patients with locally advanced or metastatic ovarian cancer (Stage III or Stage IV). It is the first Phase III study evaluating the addition of an immune checkpoint inhibitor to standard-of-care in first-line treatment for this aggressive disease and aims to enroll approximately 950 patients, who will receive concurrent avelumab and chemotherapy, avelumab following chemotherapy, or chemotherapy alone.

In January Merck and Pfizer entered into an exclusive collaboration agreement with Syndax Pharmaceuticals, Inc. to evaluate avelumab in combination with Syndax’s entinostat, an investigational oral small molecule that targets immune regulatory cells (myeloid-derived suppressor cells and regulatory T-cells), in patients with heavily pre-treated, recurrent ovarian cancer. Syndax will be responsible for conducting the Phase Ib / II clinical trial.

In March, Merck, Pfizer and Verastem announced that they had entered into an agreement to evaluate avelumab in combination with Verastem’s VS-6063, an investigational focal adhesion kinase (FAK) inhibitor, in a Phase I / Ib trial in patients with advanced ­ovarian cancer.

In early 2017, we announced that we had entered into an agreement with the University of Texas MD Anderson Cancer Center for a three-year strategic collaboration aiming to more quickly advance the development of investigational therapies in four cancers – breast, colorectal, glioblastoma, and leukemia – through the study of biomarkers of response and resistance. We are therefore the first company to gain access to MD Anderson’s Adaptive Patient-Orientated Longitudinal Learning and Optimization Platform (APOLLO) that standardizes the long-term collection of patients’ medical history and data derived from tissue samples in order to better understand the biology of cancer and accelerate research-driven patient care.

Also in early January 2017, we reached a licensing agreement with Vertex Pharmaceuticals Inc., Boston, Massachusetts (USA), for the worldwide development and commercialization of four promising research and development programs that represent novel approaches to the treatment of cancer. As part of the agreement, we have licensed-in two clinical-stage programs targeting DNA damage and repair, along with two additional novel pre-clinical programs for which we will assume full responsibility for development and commercialization.

Neurology

The EMA accepted for review our MAA for the investigational product cladribine tablets for the treatment of relapsing-remitting multiple sclerosis (MS). This MAA submission includes data from three Phase III studies, CLARITY, CLARITY EXTENSION and ORACLE MS, and the Phase II ONWARD study. In these trials, cladribine tablets showed a significant reduction in relapse rates, risk of disability progression and development of new MS lesions, as detected by MRI, versus placebo in patients with relapsing-remitting MS. Together with interim long-term follow-up data from the prospective registry, PREMIERE, the new MAA includes follow-up data consisting of over 10,000 patient years of observation, with follow-up in some patients exceeding eight years.

At the European Academy of Neurology (EAN) meeting in Copenhagen in May 2016, new data and analyses were presented from clinical studies with cladribine tablets. Outcomes in patients from across the spectrum of relapsing MS were presented from the CLARITY, ORACLE-MS and ONWARD studies. The results of a re-­analysis of the ORACLE-MS data in clinically isolated syndrome (CIS) were chosen by the organizers to be shown at the highlights session that showcases the most interesting data presented during the congress. This analysis showed efficacy of cladribine tablets in patients who would now be classified as having early multiple sclerosis according to the latest disease definitions, as well as an adverse event profile in line with previous experience. Further data investigating brain atrophy associated with cladribine tablet therapy vs placebo was presented from the CLARITY study. Final results on safety and tolerability were reported from the ONWARD study.

In September we presented clinical data for investigational cladribine tablets in two oral presentations at the 32nd Congress of the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) in London. The findings, from the CLARITY and CLARITY EXTENSION trials and from the open-label maintenance period of the ORACLE-MS study, demonstrated durable efficacy of cladribine tablets in patients with MS along with an acceptable safety profile. Results from these studies confirmed that 20 days of oral dosing over two years was effective in reducing the frequency of relapses and slowing disability progression for up to four years. The second oral presentation reported data from the open-label maintenance period of the Phase III ORACLE-MS study. ORACLE-­MS showed that for patients with a first demyelinating event, treatment with investigational cladribine tablets significantly reduced the risk of progression to clinically definite MS compared with placebo. For the open-label portion of the study, patients who converted to clinically definite MS during the initial treatment period were switched to Rebif®therapy. The new data presented at ECTRIMS show that patients who had received investigational cladribine ­tablets in the initial treatment phase had lower annualized relapse rates over the maintenance period compared to those who had received placebo in the initial treatment phase.

On the occasion of the ECTRIMS meeting, we announced the recipients of the fourth annual Grant for Multiple Sclerosis Innovation (GMSI). In 2016, 260 proposals from 45 countries were submitted, representing innovative research projects taking place across the globe. Four international research teams from Canada, Germany, Israel, Qatar, Spain, and the United Kingdom were selected to share the € 1 million grant to support their research. The GMSI was launched in October 2012 with the aim of improving the understanding of MS for the ultimate benefit of patients living with the disease.

Concerning Rebif®, results of two non-interventional studies (REBIFLECT and REBISTART) were presented showing the positive effect of the RebiSmart™ injection device as well as nurse support for patient adherence to treatment, a key concern in patients requiring treatment for a chronic disease. In addition, a retrospective claims analysis was presented to investigate the reasons for treatment discontinuation over time.

As part of our portfolio prioritization efforts, and to allow us to focus on other ongoing projects in Neurology and Immunology, we returned the rights to the Phase II MS project ATX-MS-1467 to Apitope.

Immunology

In August the first patient in a Phase IIa clinical trial was dosed with our internally developed investigational product, the BTK inhibitor M2951. The study will evaluate the efficacy and safety of M2951 in subjects with rheumatoid arthritis on stable methotrexate ­therapy. A Phase II study with the same compound was initiated in December in systemic lupus erythematosus (SLE).

In November we announced the results of the ADDRESS II, Phase IIb, multicenter study on atacicept in patients with SLE, which were presented at the 2016 American College of Rheumatology / ­
Association of Rheumatology Health Professionals Annual Meeting in Washington, DC (USA). Patients on standard-of-care therapy (n = 306) were randomized to weekly subcutaneous injections of atacicept (75 or 150 mg) or placebo for 24 weeks. The primary endpoint was the proportion of patients achieving a clinical response as defined by a composite SLE Responder Index (SRI)-4 at week 24. Secondary endpoints included SRI-6 response rate and time to severe flare, assessed by the SLEDAI flare index (SFI) or BILAG. Although the primary endpoint was not met in the overall study population, there was a trend favoring atacicept with statistical significance achieved in a pre-specified sensitivity analysis of the primary endpoint using treatment Day 1 as baseline (rather than screening visit); atacicept 75 mg (55.9%, adjusted odds ratio / OR 1.88, p = 0.029) and 150 mg (55.8%, adjusted OR 1.96, p = 0.020) compared with placebo (41.0%). BILAG A flares were significantly reduced compared to placebo with atacicept 75 mg (p = 0.019), and severe SFI flare reduced with 150 mg (p = 0.002). Additionally, analyses of a predefined subpopulation of patients with high disease activity demonstrated statistically significant treatment effects of atacicept when compared to placebo. SRI-6 response at week 24 was significantly greater with atacicept 150 mg compared with placebo. Both atacicept doses led to significant reductions in the incidence of severe flare versus placebo, BILAG A flare and SFI flare. Atacicept was also associated with increased serum complement C3 and C4, and decreased IgG, IgM, IgA, and anti-dsDNA antibodies over time. Treatment-emergent adverse event incidence was slightly higher with atacicept (150 mg, 80.8%; 75 mg, 81.4%) than placebo (71.0%), however, the risks of serious adverse events or serious / severe infections were not increased with atacicept versus placebo, and there were no deaths. The safety findings were comparable for the high disease activity subpopulation.

Fertility

In July we announced our continued support for the advancement of medical science in the field of fertility through the Grant for Fertility Innovation (GFI) program by awarding grants totaling € 1.5 million in 2016 / 17. The announcement was made on the occasion of the 32nd annual meeting of European Society of Human Reproduction and Embryology (ESHRE) in Helsinki, Finland. Launched in 2009, the GFI is dedicated to transforming innovative translational fertility research projects into concrete health solutions to improve the outcomes of assisted reproductive technologies. In 2016, six winning projects from China, Hong Kong, Ireland, the United States, and Italy (two teams) were selected from 112 global proposals with the overall goal of improving the chances of conceiving.

In October we launched two innovative fertility technologies, Gavi™ oocyte protocol and Geri™ medium. Both products help to improve key steps of assisted reproductive treatment (ART) – an area where laboratory technologies play a vital role for treatment success.

The launches represent the seventh and eighth product launch in 18 months for the Fertility Technologies unit at Merck, demonstrating the company’s healthcare strategy to deliver innovation through best-in-class assets. Gavi™ enables clinics to preserve human egg cells, also called oocytes, and embryos at the main stages of ART, while Geri™ medium supports undisturbed cultivation of embryos. Preserving oocytes or embryos for future in vitro fertilization and embryo transfers by cooling them to deep sub-zero degrees is a key step in the laboratory. Gavi™ is the world’s first automated instrument for this preservation technique, also called vitrification. With its latest product innovation, Gavi™ provides clinicians with added flexibility when taking important treatment decisions with and for their patients. Geri™ medium was developed to help improve another critical factor for successful treatment, embryo cultivation. After fertilization, the embryo needs to grow and develop before it is transferred into a woman’s womb. With the single-step culture medium, Merck now provides a way to support undisturbed incubation and optimal embryo development. Both products are being commercialized as part of the partnership between Merck and Australian company Genea Biomedx.

We announced in mid-November that we had launched two new innovative fertility technologies, Gidget™ and Geri™+, to extend our innovative portfolio to support all steps performed by fertility laboratories during ART, where technologies play a vital role for treatment success. Gidget™ is designed as an easy-to-use witnessing and tracking system to reduce the potential for error and improve lab workflows, and Geri™+ is the basis to combine the Geri™ embryo incubator and the innovative Eeva®algorithm. Both new products underline Merck’s healthcare strategy to provide innovation to patients / customers through best-in-class products. Gidget™ and Geri™+ stem from the ARTinnovations development hub, which we formed in collaboration with Genea Biomedx, Australia. ARTinnovations is an incubator for ideas and innovations for fertility treatment and technologies. It combines the commitment and know-how of both partners to develop ideas that can take root and grow into better outcomes for patients.

Integrating bright- and dark-field imaging, the Geri™+ incubator allows for combination with the Eeva®software and any Geri Assess version. Geri+ becomes a multifunctional incubator, which gives embryologists a multitude of possibilities around embryo analytics. It brings together the benefits of undisturbed incubation, while complying with the high control and safety standards of the Geri™ incubator and the analytics of the Eeva®software, the first automated algorithm clinically shown to improve embryo assessment.

Gidget™ is a hand-held device for the IVF laboratory that lets the embryologist focus on the science by eliminating any chance of mismatching, and includes unique tracking and workflow features. It provides electronic witnessing, lab workflow management and support for traceability and audit reporting.

General Medicine & Endocrinology

In mid-October we announced that the Committee for Medicinal Products for Human Use (CHMP) of the EMA has issued a positive opinion recommending extension of the label for all metformin-­containing products, including the Glucophage®product portfolio and Glucovance®, for the treatment of type 2 diabetes patients. The label change will lift the former contraindication for stable renal failure CKD stage 3. The maximum daily metformin dose will be 2,000 mg/day in CKD stage 3a (GFR = 45 – 59 ml/min) and 1,000 mg/day in CKD stage 3b (GFR = 30 – 44 ml/min), allowing a large additional group of type 2 diabetes patients with reduced kidney function to benefit from the treatment. In a recent analysis in CPRD, a UK medical record database, 32.7% of all diabetic patients had CKD stage 3.

Following a routine evaluation of the safety of metformin medicines, it was found that based on scientific evidence and clinical guidelines, patients with moderate renal failure may stand to benefit from treatment with metformin, and that the contraindication may therefore no longer be justified. Based on this evidence, the EMA issued an Article 31 referral requesting a cumulative review of the benefit and risk in this patient group across all metformin selling companies in the European Union. Leveraging around 60 years of experience in market as the metformin originator, Merck supported the EMA request by providing a comprehensive analysis of all available clinical data on the efficacy and safety of metformin in patients with CKD stage 3. This was balanced against a cumulative analysis of all case reports Merck has received for lactic acidosis, the very rare risk associated with metformin accumulation due to acute or severe renal failure. The EMA reviewed the data submitted by all companies, and as a result, the CHMP issued a positive opinion on lifting the contraindication for treatment of type 2 diabetes patients with renal impairment CKD stage 3.

In September we announced the recipients of the Grant for Growth Innovation (GGI) for 2016. The awards are intended to advance understanding in the field of human growth disorders. This year’s winners were announced at an award presentation meeting held on the occasion of the 55th European Society for Pediatric Endocrinology (ESPE) Meeting in Paris, France. Thirty-eight applications were received from 20 countries and following a rigorous selection process, three awards were made to innovative projects from Australia, Brazil and Italy.

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BIOPHARMA PIPELINE

as of December 31, 2016

Therapeutic area
Compound
Indication Status
Neurology    
Cladribine tablets (lymphocyte-targeting agent) Relapsing-remitting multiple sclerosis Registration 1
     
Oncology    
Tepotinib (c-Met kinase inhibitor) Non-small cell lung cancer Phase II
Tepotinib (c-Met kinase inhibitor) Hepatocellular cancer Phase II
Tepotinib (c-Met kinase inhibitor) Solid tumors Phase I
M2698 (p70S6K and Akt inhibitor) Solid tumors Phase I
M3814 (DNA-PK inhibitor) Solid tumors Phase I
BeiGene-283 (BRAF inhibitor) Solid tumors Phase I
M7583 (BTK inhibitor) Hematological malignancies Phase I
     
Immuno-Oncology    
Avelumab (anti-PD-L1 mAb) Merkel cell carcinoma Registration 2
Avelumab (anti-PD-L1 mAb) Non-small cell lung cancer, 1st line Phase III
Avelumab (anti-PD-L1 mAb) Non-small cell lung cancer, 2nd line Phase III
Avelumab (anti-PD-L1 mAb) Gastric cancer, 1st line Phase III
Avelumab (anti-PD-L1 mAb) Gastric cancer, 3rd line Phase III
Avelumab (anti-PD-L1 mAb) Bladder cancer, 1st line Phase III
Avelumab (anti-PD-L1 mAb) Ovarian cancer platinum-resistant / -refractory Phase III
Avelumab (anti-PD-L1 mAb) Ovarian cancer, 1st line Phase III
Avelumab (anti-PD-L1 mAb) Renal cell cancer, 1st line Phase III
Avelumab (anti-PD-L1 mAb) Locally advanced head and neck cancer Phase III
Avelumab (anti-PD-L1 mAb) Solid tumors Phase I
Avelumab (anti-PD-L1 mAb) Hematological malignancies Phase I
M9241 ( NHS -IL12, cancer immunotherapy) Solid tumors Phase I 3
M7824 (anti-PD-L1 / TGFbeta trap) Solid tumors Phase I
     
Immunology    
Sprifermin (fibroblast growth factor 18) Osteoarthritis Phase II
Atacicept (anti-BLys / anti-APRIL fusion protein) Systemic lupus erythematosus Phase II
M2951 (BTK inhibitor) Rheumatoid arthritis Phase II
M2951 (BTK inhibitor) Systemic lupus erythematosus Phase I
M1095 (ALX-0761, anti-IL-17A / F nanobody) Psoriasis Phase I
Abituzumab (anti-CD51 mAb) Systemic ­sclerosis with interstitial lung disease Phase II
     
Biosimilars    
MSB 11022 (proposed biosimilar of adalimumab) Chronic plaque psoriasis Phase III
     
1
As announced on July 18, 2016, the European Medicines Agency (EMA) has accepted for review the Marketing Authorization Application (MAA) of cladribine tablets for the treatment of relapsing-­remitting multiple sclerosis (MS).
2
As announced on October 31, 2016, the European Medicines Agency (EMA) has validated for review Merck’s Marketing Authorization Application (MAA) for avelumab for the proposed indication of metastatic Merkel cell carcinoma (MCC). Additionally, as announced on November 29, 2016, the U.S. Food and Drug Administration (FDA) has accepted for Priority Review the Biologics License Application (BLA) for avelumab in this indication.
3
Sponsored by the National Cancer Institute (USA). More information on the ongoing clinical trials can be found at www.clinicaltrials.gov Pipeline products are under clinical investigation and have not been proven to be safe and effective. There is no guarantee any product will be approved in the sought-after indication.
Akt
Protein kinase B
APRIL
Proliferation-inducing ligand
BLyS
B-lymphocyte stimulator
BTK
Bruton’s Tyrosine Kinase
IL
Interleukin
mAb
Monoclonal antibody
PD-L1
Programmed cell death ligand 1
PK
Protein kinase

Consumer Health

Our Consumer Health business develops and sells over-the-counter medicines and food supplements in Europe, in particular in France, Germany and the United Kingdom, and in growth markets in Latin America, the Middle East and Africa, and Southeast Asia. The focus of our research and development activities is on the continuous improvement of existing formulations as well as on the development of new products and line extensions. We are following a consumer-­centric innovation approach based on intensive market research across all our key markets. Since 2014, we have been establishing cooperation agreements with independent third-party research facilities to leverage their specific capabilities and expertise for the development of new products that meet the specific needs of our consumers.

Biosimilars

In March, we announced the initiation of a global Phase III clinical study in patients with chronic plaque psoriasis, of MSB11022, a proposed biosimilar of adalimumab, a recombinant human mono­clonal antibody that binds specifically to tumor necrosis factor-­alpha (TNF-α). The AURIEL-Psoriasis (PsO) study is a randomized, double-blind, active-controlled trial evaluating the efficacy, safety and immunogenicity of Merck’s adalimumab biosimilar candidate MSB11022 compared with Humira®(adalimumab) in patients with moderate to severe chronic plaque psoriasis. Humira®is marketed globally by AbbVie, Inc., USA. The study is expected to recruit approximately 400 patients across Europe, Asia as well as North and Central America.

Merck is in advanced stages of negotiations to divest the ­Biosimilars business and the transaction is expected to close in 2017.

Allergopharma

Allergopharma, our allergy business, is one of the leading manu­facturers of diagnostics and prescription drugs for allergen immunotherapy. With its own research department and in cooperation with research institutes and other partners, we are helping develop a better understanding of the immunological mechanism that underlies the development of allergies and are actively working on the next generation of drugs for allergen immunotherapy.

Life Science

Innovation is at the core of the value that we deliver to our customers. Our Life Science business sector has approximately 1,500 employees working in various R&D functions around the world. These teams collaborate closely with our customers to solve the toughest problems in life science by translating ideas into product innovations. To do so, we invest significantly in R&D.

2016 marked a year of diverse innovation activities that are contributing to our promise of accelerating access to health for people everywhere. We aim to:

  • Improve and expand our portfolio
  • Invest in new and disruptive technologies for the long term
  • Partner with the global scientific community
  • Meet customer needs

Improving and expanding the portfolio

We launched innovations across all segments of our portfolio throughout the course of 2016. In Research Solutions, we launched the CellASIC®ONIX2 Microfluidic System for advanced live cell imaging. The system converts laboratory microscopes into powerful tools for live cell imaging to more effectively perform in-depth analysis of cellular mechanisms and behaviors in a live environment.

In Process Solutions, we updated our bioreactor system, critical for drug development, with the new Mobius®products that include a 1,000-liter single-use bioreactor, Mobius®1000, and a 2,000-liter mixing system, Mobius®Power MIX 2000. We also expanded our state-of-the-art single-use current Good Manufacturing Practice (cGMP) facility, in France, with the addition of Mobius®2,000-liter single-use bioreactor to facilitate accelerated drug development and delivery via continued innovation and technical expertise by offering customers a complete end-to-end solution.

The latest addition to our comprehensive excipients portfolio is Parteck®MXP, a polyvinyl alcohol-based excipient that enhances solubility of a wide range of active pharmaceutical ingredients (APIs) with poor bioavailability. The product allows customers to address solubility challenges that otherwise might have prevented promising and potentially life-changing candidates from progressing through the pipeline. As part of this portfolio, Parteck®SRP 80 was awarded for excellence in innovation by the global organization CPhI, as a functional direct compressible excipient designed for oral sustained-­release formulations. It is fully synthetic for batch-to-batch and performance consistency and enhances the bioavailability of actives.

As an industry leader in filtration, we enhanced our portfolio with Viresolve®Pro Shield H, which effectively improves aggregate removal and reduces the required virus filtration area needed to process feed streams, while delivering the same high level of virus clearance customers expect. The new Viresolve®Pro Shield H is designed for use as a prefilter with Viresolve®Pro Device for more robust, cost-economic viral clearance.

In Applied Solutions we expanded our portfolio of Cerilliant®certified reference materials for applied diagnostics and testing. We introduced nine new Certified Spiking Solutions®that leverage the latest research and techniques from around the world for ­accurate and reliable starting materials.

Since introducing the first water filtration device in 1974, we have set the standard for reliability and convenience in sterility testing. Our new Steritest™ Symbio Pump accessories address testing challenges in various laboratory settings and enhance safety and convenience during sample handling, filtration and waste ­management as well as canister transport, incubation and reading.

Investing in new and disruptive technologies for the long term

Advancements in gene editing tools like CRISPR are helping to accelerate discovery and manufacturing of new treatments for difficult-­to-­treat conditions. We produce gene editing tools and cell lines for both faster, better drug discovery and faster, better biomanufacturing of gene-modified cell therapies. Our innovations in 2016 showcased our commitment to empowering scientists and researchers with the solutions they need to develop new tools that can improve health.

In March 2016, we announced that our CRISPR Epigenetic ­Activator was named to The Scientist’s Top 10 Innovation list. The system enables the life science community to explore advanced regulatory aspects of gene expression by allowing epigenetic modification of genetic loci at both close and distal locations to a gene of interest.

Following this accomplishment, in May we announced the expansion of our Carlsbad, California facility to meet the growing demand for viral and gene therapy products. The expansion builds on our industry-leading offerings in the manufacturing and testing of innovative and complex products and will seamlessly support customers from clinical to commercial scales. The expansion incorporates single-use equipment in a flexible, scalable format for ­clinical and commercial bulk drug production.

In September, we launched new gene editing technology to modify CHO cell lines to be resistant to minute virus of mice (MVM), a common contamination threat that remains despite the shift to chemically defined, animal-component-free manufacturing ­processes. The Centinel™ technology targets genes which play a role in MVM susceptibility and exemplifies how we are addressing some of the industry’s most complex challenges through the unique combination of experience and technologies.

We also introduced the Sanger Arrayed lentiviral CRISPR libraries, the first human and mouse arrayed lentiviral CRISPR libraries for knocking out and screening gene function. Recognized by R&D Magazine as a top 100 R&D innovation, the library allows discovery of genes involved in drug resistance, human disease and a wide variety of biological processes.

Partnering with the global scientific community

We entered into a research agreement with the International ­Vaccine Institute of Seoul, Korea, to help develop next-generation purification processes. Through this partnership, we are improving the manufacturing process to deliver greater yield, allowing higher recovery and purer vaccines. We will help create a more modern, scalable and robust manufacturing process so as to increase access to life-saving vaccines in developing countries.

Our customers face many challenges when it comes to the development, manufacture and delivery of vaccines. As a business committed to sharing our technological expertise in this area, we joined the DiViNe project, a European consortium of six companies working to create an integrated, cost-efficient purification program specifically tailored for vaccines that achieve higher yields while preserving product integrity. As an industry leader in chromatography, we specifically focus on simplifying the process of vaccine purification that typically relies on affinity chromatography, a method of capturing antibodies.

In addition, a signed collaboration agreement with Evotec International GmbH, Hamburg, aims to accelerate discovery workflows and eliminate the need for resource-intensive in-house assay development and screening. The collaboration allows customers to select a customized set of CRISPR and shRNA libraries and then leverage Evotec’s extensive capabilities in phenotypic screening within primary and induced pluripotent stem cells and in vivo disease models. Customers can more rapidly and efficiently explore disease pathways and identify new targets.

In December, we expanded our distribution alliance with various companies of the Roche Group, Switzerland, to be the exclusive supplier of novel enzymes for polymerase chain reaction (PCR) and quantitative real-time PCR enzyme products of Kapa Biosystems, a company owned by Roche. The alliance extension gives our ­customers greater access to novel products through our world-class distribution channel. The agreement is a growth driver for our Life Science business sector, which offers premier brand tools for genomics, proteomics and cell analysis.

Meeting customer needs

Proving our commitment to our customer needs, we relaunched our global network of customer collaboration centers as M Lab™ Collaboration Centers. The centers provide customers with a shared, exploratory environment with scientists and engineers working to solve the toughest biomanufacturing challenges. The dynamic setting promotes customer collaboration and problem solving, from pre-clinical through full-scale production. Our scientists and engineers work closely with customers to understand biomanufacturing needs that are then realized within R&D.

In 2016, we committed to provide Provantage®End-to-End development and manufacturing services to Y-mAbs Therapeutics, Inc. in support of Y-mAbs’ monoclonal antibody in late-stage clinical development for pediatric brain cancer and also to Acticor Biotech to develop a safe and effective treatment for strokes. Our Provantage®End-to-End solution is a comprehensive suite of products and services that allows biopharmaceutical companies to accelerate the progression of molecules into the clinic and toward commercialization.

Performance Materials

We are the undisputed market and technology leader in liquid crystals (LCs) and photoresist materials, which are primarily used in televisions and mobile communication applications. We are also one of the leading suppliers of OLED materials as well as decorative and functional effect pigments. Materials for integrated circuits round off the portfolio.

Display Materials

We continued to work with our customers, display manufacturers, on the further development of high-performance liquid crystal technologies. These include the multiple award-winning, energy-saving liquid crystal technology UB-FFS (Ultra-Brightness Fringe-Field Switching) for mobile applications. We are additionally testing UB-FFS for non-mobile applications. SA-VA (self-aligned vertical alignment) is the next technology, with which the first products are expected on the market in 2017. It is very eco-friendly and resource-conserving as it requires less energy and solvent in display manufacture. In addition, it is more efficient for display manufacturers because fewer process steps are needed. Since SA-VA ­technology can be processed at lower temperatures, it is suitable for sensitive materials such as those used in premium products or future applications including flexible displays.

In order to strengthen our position in the increasingly important Chinese market, in September we opened a research and development laboratory for display materials in Shanghai. The new R&D laboratory will focus on the development of new and improved mixtures for liquid crystal displays manufactured in China. This allows us to cover the entire value chain for our customers in China and improve our competitiveness. In addition, we have more strongly positioned liquid crystals under the licrivision™ brand as an innovative material for windows in architectural and automotive applications. We are currently concentrating on three variants: sun protection, glare protection, and privacy control where the windows switch to opaque. Subsequent to the positive resonance to multiple pilot applications for liquid crystal windows, we decided to press ahead with the development and to set up our own production plant for liquid crystal window modules. The development of smart antennas using liquid crystal technology is continuing to make good progress.

Integrated Circuit Materials

In recent years, the cost per transistor for computer chips has not declined to the same extent as in the past. This is a result of the increasingly high cost of photolithography steps, which for modern chips today already amounts to more than 50% of manufacturing costs. This offers us the opportunity to introduce novel, cost-­effective materials that allow our customers to counteract this cost development with innovative processes. In spin-on dielectrics, we further strengthened our market position with high-quality, sophisticated materials. Moreover, we successfully launched new products with better performance and better specifications and qualified them in new memory chip production lines. In close contact with our customers, we are also conducting research on new dielectrics that are adapted to the lower process temperature budget of novel chip types. The integration of the former SAFC Hitech business of Sigma-Aldrich has enabled us to combine spin-on technologies with deposition processes and provide customers with both from a single source.

Pigments & Functional Materials

Meoxal®effect pigments based on aluminum platelets are distinguished by their exceptional color saturation and brilliance. We are developing new color spectra for these pigments, which are used especially in automotive and plastic coatings. For Xirallic®NXT, an improved product generation of the well-known high-tech effect pigments, further variants are also under development. The most recently launched pigments include Xirallic®NXT Leonis Gold, a gold-­colored pigment with outstanding hiding power and intense glitter, and Xirallic®NXT Tigris Blue, a pure and highly chromatic blue pigment.

In technical applications, we intensified our activities in additives for 3D laser direct structuring with a focus on 3D printing of plastics. We also developed laboratory prototypes together with our partners, which were presented for the first time at the K 2016, the top trade fair for plastics, in Düsseldorf. Laser additives enable computer-controlled fabrication of three-dimensional components with integrated electronic parts and laser-assisted circuit board bonding. We also see potential in energy management. We made good progress in high-voltage technology. Within the scope of the iShield research project, which is funded by the German Federal Ministry of Education and Research (BMBF), we are collaborating with academic and industrial partners to develop novel materials to shield generators and engines. We received the Darmstadt Enterprise Innovation Award for an innovative project with our customer Siemens, in which we are producing additives for more energy-efficient generators. Iriotec®7340 was the first very light-colored, conductive pigment that we developed to market readiness. It allows a neutral background color that is suitable for every coating color.

We successfully further developed our range of fluorosurfactants, which strongly differentiates itself from competitive products on account of its favorable ecotoxicological profile, among other things. In early 2017, Tivida®FL 3000 is to be added to our portfolio of nonionic surfactants. Even in very low concentrations, it significantly improves the flow and wetting behavior of coating systems.

Besides materials for technical applications, we are also working on innovative raw materials for cosmetics – cosmetic fillers and actives. In cooperation with the French company Agrimer, we launched the first marine active ingredient from a new genetically decoded species of algae. The product known under the brand name RonaCare®RenouMer firms the skin and supports collagen formation.

Advanced Technologies

Organic light-emitting diodes (OLEDs) are an outstanding example of our R&D activities in the Advanced Technologies business unit. We pushed ahead with their further development again in 2016.

In 2016, we realigned our strategic projects for future business fields to megatrends such as miniaturization and the Internet of Things, which are developing at a rapid pace. One of the fields of work that we have derived from these is hybrid electronics. This new generation of electronics can be used, for example, in flexible displays and innovative sensors. Another field is electronic packaging. Here we see the future in materials that can protect or encapsulate the coming generation of semiconductor elements – also for flexible applications. In both fields of work, we are concentrating on markets in which Merck already holds a leading position, namely display and semiconductor materials. In addition, we are addressing interdisciplinary topics, as smart materials are also gaining importance in the Healthcare and Life Science business sectors. Sensor applications are one such example, which specifically monitor patients’ temperature profiles and movements. In the fields of energy storage and thin-film transistors, we are collaborating on projects with partner companies that have introduced new solutions to the market with the help of our innovative products. We also achieved progress in the field of printable organic photovoltaics: In close collaboration with our customers, several mass-producible printing machines were commissioned in 2016. This was made possible thanks to our printing inks, with formulations specifically developed and tailored for customer processes.