Bayer and MSD's New Drug, Verquvo (Vericiguat), Approved by EMA, Entering the European Market for Reduced Ejection Fraction Heart Failure
Bayer and MSD's Strategic Collaboration and Regulatory Success
The European Medicines Agency (EMA) has granted final approval on July 16, 2021, for Verquvo (vericiguat), a chronic heart failure treatment co-developed by Bayer AG (ticker: BAYN) and Merck & Co. (ticker: MRK). This approval marks the culmination of a 2014 agreement between the two companies for the global co-development of a soluble guanylate cyclase (sGC) stimulator. At the time, Merck paid Bayer a $1.0 billion upfront payment and promised up to $1.1 billion in sales milestones, totaling a $2.1 billion deal. With this EMA approval, Bayer, which holds the European marketing rights, has established a commercial foothold. The FDA had previously approved the drug without a separate advisory committee review, further solidifying its position as a drug that has successfully overcome regulatory hurdles.
Novel Mechanism of Action and the Value of the VICTORIA Phase 3 Trial
Verquvo is the world's first approved sGC stimulator, promoting intracellular cGMP synthesis and restoring cardiac and vascular function. In the pivotal Phase 3 VICTORIA study (5,050 patients), Verquvo, when used in combination with standard therapy, significantly reduced the composite risk of cardiovascular death and heart failure hospitalization by 10% compared to placebo (Hazard Ratio 0.90, 95% CI 0.82-0.98, p=0.019). The composite event rate was 35.5% in the Verquvo group and 38.5% in the placebo group, with an absolute risk reduction (ARR) of 3.0 percentage points. The number needed to treat (NNT) to prevent one event in one year was 24 patients, quantitatively demonstrating its clinical value.
Positioning as a Combination Therapy with Existing Standard of Care for Heart Failure
In clinical practice, Verquvo is more likely to be prescribed as a combination therapy rather than as a direct competitor to existing blockbuster heart failure drugs such as Entresto (Novartis) or Farxiga (AstraZeneca). In particular, this European approval targets patients with reduced ejection fraction heart failure (HFrEF) who have recently experienced worsening heart failure and required intravenous (IV) diuretic treatment, carving out a differentiated niche. It provides an additional survival option for high-risk patients who are not adequately controlled with existing treatments.
Challenges in Expanding Insurance Coverage and Achieving Commercial Success
The cost-effectiveness assessment and pricing negotiations with individual European national health authorities will be key determinants of future commercial success. Given that Novartis's Entresto and SGLT2 inhibitors have already become market leaders, rapid reimbursement for Verquvo will be crucial for revenue growth. To achieve peak sales of up to €1 billion globally, it is essential to secure rapid agreement on reimbursement criteria in each European country and accumulate clinical prescribing experience.
Global Commercial Rights and Partnership Structure
Verquvo's commercial rights are divided, with Merck responsible for the U.S. market and Bayer responsible for sales in Europe and other global regions. The two companies share development costs and revenue, enhancing global marketing efficiency. In the future, the partnership is expected to play a key role in demonstrating synergy by pursuing expanded indications based on long-term data and extending the drug's lifespan.
The European approval of Verquvo establishes a complementary position to existing standard-of-care treatments, Entresto and SGLT2 inhibitors, in the global heart failure drug market, which ranges from $7.7 billion to $26 billion, and will initiate short-term revenue contributions to the joint sales network of Bayer and Merck. From a researcher's perspective, the first commercialization of an sGC stimulator, a novel mechanism of action, will be an important milestone for research on expanding the use of the cGMP pathway for other indications and for the development of subsequent pipelines. Industry professionals are paying attention to how much of the unmet needs in the real-world clinical setting can be absorbed by the 10% relative risk reduction (HR 0.90, p=0.019) demonstrated in the Phase 3 VICTORIA study in the high-risk reduced ejection fraction heart failure (HFrEF) submarket. In the medium to long term, the speed at which individual countries secure reimbursement will be a critical factor in corporate value as the company strives to achieve its global peak sales target of €1 billion.
Source: EMA (ema)