FRANKFURT (Reuters) - Germany's Merck KGaA MRCG.DE is reviving plans to bring an oral multiple sclerosis (MS) treatment to the U.S. market, hoping for blockbuster sales despite regulatory concerns about side effects having frustrated its ambitions almost seven years ago.

The logo of German pharmaceuticals company Merck is seen in front of the company's headquarters in Darmstadt, Germany, May 16, 2016. REUTERS/Kai Pfaffenbach

In early 2011 the U.S. regulator’s concerns put an end to Merck’s development plans for the cladribine pill, now branded as Mavenclad, but Merck later revived efforts by focusing on the most severely affected patients and won approval in Europe in August this year.

Merck, whose products include high-tech chemicals, laboratory equipment and cancer drugs, has now decided also to file for approval with the U.S. Food and Drug Administration (FDA) in the second quarter of 2018, the head of its healthcare division, Belen Garijo, told Reuters.

“If Mavenclad is approved in the U.S., we see this opportunity as one of the significant growth drivers in our MS franchise and we would say that Mavenclad will in the longer term develop blockbuster potential,” she said.

The industry term blockbuster typically implies annual sales of at least $1 billion, but Garijo would not elaborate on figures.

Mavenclad, alongside cancer immunotherapy treatment Bavencio, is a central part of Merck’s push to reinvigorate its drug development business after years of setbacks.

The diversified group is also working on the sale of its consumer healthcare unit to focus on the development of new drugs, with sources telling Reuters late on Thursday that Perrigo PRGO.N is preparing a bid, competing with Nestle NESN.S and the private-equity owners of Stada STAGn.DE.

Merck said in September it was eyeing annual sales in the European Union for Mavenclad, a latecomer to the market for oral treatments against the neurological disease, of 500 million to 700 million euros ($590 million to $823 million).

Bernstein analyst Wimal Kapadia, who anticipates 400 million euros in annual peak sales in Europe, said: “If approved, we should assume at least a similar expectation for the U.S.”

Bryan Garnier analyst Hugo Solvet said: “The potential of the product in the U.S. was not taken into account by the consensus nor by the company in its 2022 guidance.”

The targeted patient group is characterized by highly active relapsing MS. Among the relapsing-remitting type of MS, they account for the roughly 60 percent of patients most severely affected by neurological damage and disability.

“Our aspiration is to be able to serve the same patient group that is now benefiting under the European registration. But of course the label will have to be approved by the FDA,” the Merck executive said.

Biogen BIIB.O, Novartis NOVN.S and Sanofi SASY.PA have long pulled ahead with novel MS treatments taken as a pill, gradually replacing standard injection therapies and reaching a combined share of the overall MS market of more than 40 percent.

If approved in the United States Mavenclad will also be up against Roche's ROG.S Ocrevus, an infusion drug that has had U.S. approval since March and which analysts expect to generate $1.5 billion in sales next year.

But Garijo said Ocrevus was targeted mainly at primary progressive MS, which Mavenclad was not developed for treating.

“Mavenclad seems to be a pretty effective MS drug and is tolerated relatively well, but there is a fair amount of baggage associated with the product and in a very competitive market,” Bernstein’s Kapadia said.

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