Merck's $10.8 Billion Bet Just Paid Off in a Place Nobody Expected

The results held up on tougher measures, too. HiSCR75 (a higher bar requiring 75% lesion reduction) showed 41% in the high-dose group versus just 15% on placebo. Merck confirmed the study hit both its primary and key secondary endpoints.

Safety Looked Clean

One of the fastest ways to kill excitement about a new drug is a messy safety profile. Tulisokibart avoided that problem. Adverse events actually occurred at similar rates across all groups: 42.9% in the high-dose arm, 47.6% in the medium-dose arm, and 40.9% in placebo. Serious adverse events were rare, and the company reported no serious or opportunistic infections.

For a drug that suppresses part of the immune system, that's a reassuring signal. It's early, and Phase 2 trials aren't designed to catch every safety issue, but this is the kind of clean profile that makes Phase 3 planning much easier.

Why HS Is Such a Big Deal (and Such a Mess)

HS is one of dermatology's most frustrating diseases. Patients often wait seven to ten years for a correct diagnosis. Treatment still relies heavily on antibiotics, retinoids, and surgery, none of which address the underlying immune dysfunction.

The approved biologic options have grown in recent years. AbbVie's Humira (adalimumab) was first, followed by Novartis's Cosentyx (secukinumab) and UCB's Bimzelx (bimekizumab). But the market remains seriously underpenetrated. Estimates peg it at roughly $1 billion to $1.3 billion in 2025, with room to grow as newer therapies launch and more patients get diagnosed.

The core problem: existing biologics don't work well enough for many patients. HS needs more shots on goal, and tulisokibart's mechanism is completely different from anything currently approved for the condition.

The Bigger Picture for TL1A

This readout matters for reasons beyond HS. It's the first positive Phase 2 result for an anti-TL1A antibody in dermatology, which validates the idea that TL1A isn't just a gut target. Merck has been telling investors that tulisokibart could work across gastroenterology, dermatology, and rheumatology. The HS data is the first real proof of that broader thesis.

That's significant because TL1A has become one of the hottest targets in all of biotech. Three drugs (tulisokibart, afimkibart, and duvakitug) are all in Phase 3 for IBD. A fourth, TEV-48574, is running a Phase 2 basket study. Next-generation approaches including bispecific antibodies and extended half-life formulations are already in development.

But almost all of that activity has been focused on the gut. Merck just opened a second front, and nobody else in the TL1A space has matched it yet.

What Wall Street Is Saying

Early analyst commentary has been broadly positive. The consensus framing: this is a pipeline-strengthening readout that validates Merck's Prometheus acquisition and supports further development. It's not being treated as a commercial blockbuster on its own (HS is a meaningful but not massive market), but rather as evidence that Merck's immunology platform has legs.

The timing also matters. At least one other Merck anti-TL1A mid-stage program reportedly missed its endpoint recently, which had raised questions about how broadly TL1A inhibition would work. The HS win helps answer those doubts.

For a company staring down the eventual loss of exclusivity on Keytruda (its nearly $30 billion-a-year cancer drug), every positive pipeline readout counts. Tulisokibart in HS won't replace Keytruda revenue, but it adds another brick to the wall Merck is trying to build.

What Comes Next

Merck hasn't announced Phase 3 timing for HS yet, but the strength of these results makes advancement likely. The dose-response relationship was clear, the safety profile was clean, and the unmet need is enormous. Those are the three boxes pharma companies want to check before committing to a registrational program.

Keep an eye on this one. TL1A started as a promising gut target. It's becoming something much bigger, and Merck just proved it with data in a disease that desperately needs new options. The $10.8 billion Prometheus deal is looking smarter by the quarter.

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