Merck KGaA’s pharma group is taking one more step in a long journey toward rehabbing its rep in the R&D field this weekend. Company execs turned up at the ACR scientific conference in San Diego to roll out a promising look at some key Phase II osteoarthritis data — which comes with a critical caveat.

The drug is sprifermin, which Merck Serono has had in its pipeline for the past 13 years after bagging it from ZymoGenetics, now a part of Bristol-Myers Squibb. In the first two-year efficacy assessment of the five-year study, researchers are now proudly pointing to a slight increase of cartilage in the knee, as opposed to the remorseless decline that leads to expensive knee replacement surgery.

By Merck research chief Luciano Rossetti’s reckoning, this is the first time a drug has actually triggered a reversal of this disease — rather than just managing the symptoms of the disease — leaving the German Merck with a potentially groundbreaking drug in a field that accounts for 5% of the world’s population, with 237 million people whose lives have been crimped by this disease.

“The most striking response is the disease response,” Rossetti tells me. And what’s particularly exciting, he added, is that the drug — recombinant human FGF-18 protein — is not just blocking the decline of cartilage, but significantly building normal cartilage in a 2-year time frame.

At the highest dosage, researchers tracked a 0.05 mm increase in cartilage thickness, with a step down in dose to a 0.04 mm increase. Considering that a 0.04 mm loss puts patients at a greatly higher risk of knee replacement, he says, they’re looking at a major treatment shift.

If the data are borne out in Phase III, Merck KGaA believes it can line up another drug behind its big PD-1 drug avelumab, partnered with Pfizer in the biggest upfront ever recorded in biotech. Merck KGaA also recently won a European approval for the MS drug cladribine, initially abandoned in 2010 after it was spurned by regulators on both sides of the Atlantic. That marked a low point for Merck KGaA, which went for more than a decade without a single major win on the R&D side of the business.

Rossetti and the rest of the team want to put the bad old days behind the company for good, and sprifermin could help.

But there’s a big catch. The drug failed to register any kind of noticeable improvement over placebo on patients’ symptoms involving pain or function, an essential part of the secondary endpoint profile.

Just getting an injection of either placebo or drug in the knee had a big impact, says Rossetti, making it impossible to tease out the drug’s effect. They now have to see if regulators are open to using a marker on cartilage thickness rather than an effect on symptoms as a Phase III primary endpoint.

There is no set plan for Phase III, he adds, with upcoming regulatory exchanges needed to sort out trial design and length. You can be sure it won’t be easy or quick, though. GlobalData recently estimated that the drug could hit the market in 2021, with fairly limited near-term commercial prospects in a market dominated by cheap generics.

Still, it’s forward progress for Merck KGaA in the clinic. And that is big.