Merck ($MRK) says it's not worried about the bad news on Cubicin generics. It's as committed as ever to its $9.5 billion buyout of Cubist Pharmaceuticals ($CBST). But the unfavorable patent verdict, which came on the heels of that merger announcement, has created plenty of other worrywarts.
Not all worrywarts are pessimists. Some of them are accentuating the positive. For instance, some analysts have pointed to Merck's hospital sales force and its 2,000 or so reps. Surely those experienced sales types can wring more sales out of Cubist's products than the much smaller Cubist group did.
The Cubist reps working on Cubicin, a high-powered antibiotic for drug-resistant skin and bloodstream infections, managed to pump it up to blockbuster-level sales. The team has set the brand-new Sivextro off to a solid start. Other drugs, such as the C. difficile fighter Dificid, may not be delivering much now--but they have more potential.
Merck and its Big Pharma marketing touch might accelerate that product growth enough to offset a big chunk of the sales lost to earlier-than-expected Cubicin generics, which could now hit in 2016. And the launch of Cubist's soon-to-be-approved superbug-fighter Zerbaxa? Merck can bring all that marketing know-how to bear in launching that treatment.
And then there's the Cubist-reps-helping-Merck angle. Merck is developing a C. difficile drug of its own, because persistent colitis caused by C. diff has grown increasingly common in hospitalized patients. Dificid is the leading treatment right now, thanks in part to Cubist's sales team. But it doesn't work long-term for some 15% of those afflicted.
If and when Merck's drug candidate--now called MK-3415A--wins FDA approval, that same sales team can hit the ground running. Cubist reps can leverage their contacts with hospitals and clinics, insurers, gastroenterologists and infectious disease specialists, Merck's Adam Schechter told Reuters.
"This is a blockbuster market opportunity for Merck," Gabelli & Co. analyst Kevin Kedra told the news service. Ori Hershkowitz, a Sphera Funds partner, added, "Merck couldn't have a better infrastructure than Cubist to launch its drug."
Of course, similar arguments accompany most mergers. Valeant Pharmaceuticals ($VRX) was counting on Allergan's ($AGN) experienced sales force to help it grow its own dermatology and aesthetics business--before that deal crashed and burned, that is. Now, analysts are singing the praises of an Allergan-Actavis ($ACT) sales force combo. But that doesn't mean the argument isn't true.
So, you naysayers. Are you listening? Sales and marketing will save the day for Merck and Cubist. Reps should negotiate their bonuses now.
- read the Reuters news
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