MRK's ADC Candidate Gets FDA Breakthrough Therapy Tag for Lung Cancer

Merck MRK announced that the FDA has granted the Breakthrough Therapy designation (BTD) to its B7-H3-directed DXd antibody-drug conjugate (ADC), ifinatamab deruxtecan (I-DXd), for treating adult patients with extensive-stage small cell lung cancer whose disease progressed on or after platinum-based chemotherapy.

The FDA’s Breakthrough Therapy designation is a process that speeds up the development and review of drugs for serious or life-threatening conditions. This designation is granted when early clinical evidence suggests that a drug may significantly improve over existing treatments on one or more important clinical measures.

The FDA’s latest decision was based on data from the phase II IDeate-Lung01 study with support from the phase I/II IDeate-PanTumor01 study. The IDeate-Lung01 study evaluated the safety and efficacy of I-DXdin in the given patient population.

MRK Stock Performance

Year to date, shares of Merck have plunged 15.3% compared with the industry’s decline of 2.8%.

MRK & Daiichi's Deal for I-DXd & Other ADC Candidates

Besides extensive-stage small cell lung cancer, I-DXd is being evaluated in separate phase III studies for treating esophageal cancer and prostate cancer. Developed by Daiichi Sankyo, this ADC drug candidate already enjoys an orphan drug designation for treating small-cell lung cancer in the United States, Europe and some other countries.

Merck acquired global co-development and co-commercialization rights to I-DXd and two other ADCs, patritumab deruxtecan and raludotatug deruxtecan, from Daiichi Sankyo in October 2023 for a total potential consideration of up to $22 billion. However, Daiichi Sankyo has retained exclusive rights for the development of the candidates in Japan.

In August last year, Merck expanded the collaboration to co-develop and co-commercialize MK-6070, an investigational T-cell engager targeting delta-like ligand 3 (DLL3), which it obtained from its recent acquisition of Harpoon Therapeutics.

Patritumab deruxtecan is being developed in late-stage studies for breast cancer, while raludotatug deruxtecan is being developed in mid-stage studies for ovarian cancer as well as other cancer indications.

Competition in the ADC Space

ADCs are being considered a disruptive innovation in the pharmaceutical industry, as these will enable better treatment of cancer by harnessing the targeting power of antibodies to deliver cytotoxic molecule drugs to tumors.

Daiichi Sankyo has several ADCs in clinical development across multiple types of cancer. It markets Enhertu, a HER2-directed ADC, in partnership with AstraZeneca AZN, which is presently approved across multiple indications, including HER2-mutated breast, lung and gastric cancers.

In January 2025, the FDA approved AZN and Daiichi’s second ADC drug, Datroway, for treating unresectable or metastatic HR-positive, HER2-negative breast cancer in adult patients who have received prior endocrine-based therapy and chemotherapy. The FDA approved Datroway for its second indication, non-small-cell lung cancer, in June.

Pfizer PFE also forayed into the lucrative ADC space with the acquisition of Seagen for $43 billion in late 2023.

Following this acquisition, PFE added three ADCs to its portfolio — Adcetris, Padcev, Tukysa and Tivdak — all approved across various types of solid tumors and hematologic malignancies. These products contributed meaningfully to Pfizer’s revenues in 2024 and in the first half of 2025.

MRK's Zacks Rank

Merck currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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