Bristol-Myers' Opdivo far outpaced Merck's Keytruda again in Q2. What gives?

Keytruda Opdivo

Ever since they hit the market within weeks of each other in 2014, Merck & Co. and Bristol-Myers Squibb’s cancer immunotherapies have been running neck-and-neck when it comes to FDA approvals and new data. But sales? Not so much.

In 2015, Merck’s Keytruda brought in $566 million, an impressive total to be sure. But Opdivo racked up several hundred million more at $942 million.

And that trend has only continued. Opdivo recorded $840 million in second quarter sales, more than twice Keytruda’s $314 million. For the first quarter, Opdivo posted $704 million, while Keytruda managed $249 million. That brings the drugs’ first-half tallies to $1.58 billion and $563 million, respectively.

What’s going on? After all, the two meds do have similar lists of indications in melanoma and non-small cell lung cancer. They’re both on their way to new uses in head and neck cancer, too. The big difference in their labeling is that, in lung cancer, Keytruda is supposed to be given to patients who test positive for certain levels of the PD-L1 biomarker, and Opdivo is approved for use regardless of PD-L1 status.

And that’s holding Merck back on market share in lung cancer, not only in its current target market--patients who’ve failed on at least one prior treatment--but in off-label use in previously untreated patients. Right now, 70% of Keytruda sales derive from melanoma, with 10% to 15% coming in second-line lung cancer. In previously untreated patients--where Merck expects eventual growth, once it wins a first-line approval--“the utilization ... right now is very low,” Merck EVP Adam Schechter said during the Q2 earnings call.

Meanwhile, doctors are bringing Opdivo to previously untreated patients more quickly. On the company’s second-quarter call with analysts, Bristol-Myers executives said doctors’ off-label use of Opdivo has given the drug 10% to 15% of the first-line market in squamous lung cancer and about 5% in non-squamous patients, a much bigger market.

But BMS admits that, as both drugs win their coveted first-line lung-cancer approvals, Opdivo’s advantage there could wane. In that field, up-front PD-L1 diagnostic testing will apply to both meds--and that means both companies will be pushing doctors to run those diagnostics.

More testing means more opportunity for Keytruda to win scripts, Schechter said, and right now, doctors seem to be enthusiastic about Keytruda in PD-L1-positive patients.

“[W]hat’s important is we're seeing PD-L1 testing start to occur more and more often,” he said on the call, adding that two-thirds of physicians are now testing. “And what we see is when physicians test, they tend to use Keytruda, and that's where we see the utilization of Keytruda for lung right now.”

Unfortunately for Merck, however, Bristol-Myers is moving toward another first-line lung-cancer approval--this time for Opdivo alongside its other immunotherapy, Yervoy. In data rolled out at the American Society of Clinical Oncology meeting in June, the two meds together boosted response rates in lung cancer patients, compared with Opdivo alone.

Special Report: Top 20 drugs by 2020 - Opdivo - Keytruda

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Bristol-Myers beats the Street in Q2, but without much help from Opdivo