The launch of major new drugs has been notably lacking among pharma giants in recent years. Merck (US:MRK) provides an exception. In 2016, its drug Keytruda became the first approved cancer immunotherapy - a type of treatment that uses the body's own immune system to attack cancer - and in its first full year it has already reached blockbuster status with sales of over $1bn (£808m).
The 148 per cent increase in revenue from Keytruda helped reduce the impact of a rapid decline in sales of pain alleviator Remicade, which lost patent protection last year. The forthcoming patent expiration of more of Merck's top-selling drugs has made analysts rightly anxious, particularly as sales from four other blockbuster treatments fell last year. But management is upbeat about the group's future mainly due to the potential of Keytruda.
Sales of the drug are expected to multiply again next year after a "significant acceleration" in patients being tested to see if they can benefit from Keytruda. The drug is also undergoing further trials to expand its approval into more clinical populations. But Merck has received some criticism for the amount it is still spending on developing Keytruda and other drugs: research and development (R&D) expenses rose 7 per cent to $7.2bn last year.
