Health Exchange: Merck, Dendreon miss out on health-care rally
LOS ANGELES (MarketWatch) — Two drug makers on vastly different paths both found themselves in negative territory Monday, as Dow component Merck & Co. Inc. slipped on a disappointing drug trial result and Dendreon Corp. plummeted after filing for bankruptcy.
The two missed out on a sector-wide rally in which health care led all S&P 500 categories by a wide margin, and biopharma companies were up an average 1% overall.
Merck MRK, -0.49% was off 1.4% to $ 58.50 in recent action, missing out on a sector rally as well as broader market gains after a new Hepatitis C treatment it was testing offered mixed results.
Merck was testing the use of two drugs it had developed, combined with Gilead Sciences Inc.’s GILD, +0.68% blockbuster Sovaldi treatment, which has gotten attention for both its near-flawless results, as well as its $ 1,000-a-day price tag. Sovaldi is commonly used over a 12-week period at a cost of $ 84,000.
The three-drug cocktail that Merck was developing is designed to accelerate the time by which patients are cured to as little as one month, but the company said it saw a success rate of only 38.7% in that time frame.
Merck said it stretched the regimen out to six weeks and got success rates in the 80%-plus range. After eight weeks of treatment, the success rates were near 95%, the company said.
Merck is one of several companies developing a new generation of Hepatitis C treatments designed to eclipse past drugs’ success rates with near-flawless results. Gilead’s Sovaldi was the first to market and thus is commanding high prices, but others in the pipeline from companies like Merck and AbbVie Inc. ABBV, +3.38% are expected to create more competition and perhaps bring down prices.
As Merck stumbled, AbbVie was up 3.5% to $ 63.63 and Gilead tacked on nearly 2% to $ 108.32.
Meanwhile, Dendreon Corp. DNDN, -74.24% — having already been reduced to a penny stock — lost three-fourths of its value as the company filed for Chapter 11 bankruptcy protection as expected.
Dendreon shares were off 71 cents to 24 cents in recent action. The company never recovered from lack of interest in its cancer drug, Provenge, hailed in 2010 as a breakthrough in oncology. Dendreon took heat for pricing the drug above Sovaldi, at $ 93,000, while offering cancer patients only four extra months of survival.
The company said in a press release that it hopes to keep Provenge commercially available, and it was seeking a potential buyer as it works through the bankruptcy process.