Merck, Daiichi pull lung cancer filing after FDA pushback deals another blow to $4B deal
Merck and Daiichi Sankyo withdrew their lung cancer drug filing after FDA deemed the data insufficient for accelerated approval. The partners may refile with phase 3 trial data. The withdrawal follows prior setbacks in their $4B partnership, including an FDA rejection and a voluntary withdrawal of another ADC. Phase 3 trials for the drug in other cancers are ongoing, with completion dates in 2028.
How this was made
The 30-second read
Why it matters
The withdrawal delays potential revenue from I‑DXd, reduces near‑term pipeline value, and may pressure both stocks until further data emerge.
Market read
Regulatory setback for a high‑value ADC partnership likely depresses both MRK and DSK shares and adds caution to the broader oncology ADC space.
What to watch
The partners still have phase‑3 trials for I‑DXd in other indications (prostate, esophageal) slated for 2028, which could mitigate long‑term impact.
Background
Merck paid Daiichi $4 billion in 2023 for three ADC collaborations. The FDA rejected an earlier HER3‑DXd filing in 2024, and the current B7‑H3 ADC filing was pulled after feedback on data sufficiency.
Ticker impact
Merck & Co. withdrew its FDA accelerated‑approval filing for the B7‑H3 ADC I‑DXd in extensive‑stage small cell lung cancer.
likely downward pressure as investors price in delayed revenue from the ADC.
Regulatory rejection of a near‑term product reduces near‑term upside; the $4 billion partnership value heightens market sensitivity.
Market effects
Sets back momentum for the ADC oncology sector and may delay investor enthusiasm for similar B7‑H3 programs.
US biotech stocks could see modest weakness as the FDA signal raises regulatory risk perception.
The partnership involves a Japanese firm, so the news may affect Asian biotech sentiment as well.
Counterpoint
If the phase‑3 data later prove compelling, the withdrawal could be seen as a temporary hurdle, offering a buying opportunity at lower valuations.
Key entities
- companyMerck & Co.
US‑listed pharmaceutical giant (ticker MRK).
- companyDaiichi Sankyo
Japan‑based pharma with US ADR (ticker DSK).
- regulatorFDA
U.S. Food and Drug Administration, source of the rejection.
