Why did Merck issue an unusual press release? It knows investors are hyperfocused on I-O data

Investors falsely suspected Merck was sitting on negative Keytruda data last week. (Merck)

Investor “conspiracy theories” are real in immuno-oncology, something Merck & Co. knows all too well. So well, in fact, that the company recently changed up its communications game to address investor fears directly.

It all started last on Merck’s first-quarter conference call, when the company confirmed that data from the Keynote-407 trial—which is examining Keytruda alongside two different chemo regimens as a treatment for first-line, metastatic squamous non-small cell lung cancer—would be released at June’s American Society of Clinical Oncology (ASCO) annual meeting.

The thing was, Merck hadn’t yet released any top-line data from that trial, a factor that “led to fears that perhaps Merck was sitting on bad data,” Bernstein analyst Tim Anderson wrote in a note to clients.

But that wasn’t the case, and to set the story straight, Merck issued a press release with an earlier-than-normal data disclosure: The cocktail had nailed its response-rate marks, hitting a secondary endpoint for the trial. And based on that performance, it had filed the regimen for FDA approval.

As Anderson pointed out, Merck “would not normally put out a press release like this based on an ORR analysis as part of a secondary endpoint, even if it had filed for approval with FDA, as it has in this instance.” Instead, it would generally wait until the filing had been accepted or until the regimen had hit the study’s primary endpoint to come out publicly with the news.

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Evercore ISI’s Umer Raffat applauded the New Jersey drugmaker’s decision, writing in his own note to clients that the tidbits included in the press release “check the box and put any KN-407 controversy to rest.”

“This is good news … and should calm down conspiracy theories” on the trial, he wrote.

But beyond hinting at Merck’s hand, the move illustrated the pressure on companies—immuno-oncology drugmakers in particular—that’s coming from shareholders, who are monitoring the I-O landscape like hawks and have been known to let fears run wild and run down a stock based on a false premise.  

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The desire to play directly to shareholders extends beyond I-O, though. A wave of recent pharma corporate image campaigns have served dual purposes: portraying a culture of innovation to consumers increasingly focused on drug prices, and allaying fears from shareholders worried that government and payer drug-pricing action could hurt shares.