Look out for a Q4 surprise from BMS' Opdivo, but Merck's Keytruda will stay on top: analyst

When the dust settles on the fourth quarter, analysts expect Merck’s Keytruda to maintain its lead over archrival Opdivo from Bristol-Myers Squibb. But it’s Opdivo that could surprise Wall Street, one analyst says.

Data from analytics firm Symphony Health put Opdivo’s Q4 sales in the U.S. at $1.24 billion, which would far surpass the $1.12 billion consensus estimate. Credit Suisse analyst Vamil Divan, for his part, doesn’t expect to see sales hit that high mark—“actual sales for Opdivo have come in below this estimate by 5-10% in the past quarters,” he wrote in a note to clients. But even after making that adjustment to Symphony's figure, “Opdivo still appears to beat ours as well as Street estimates,” he said.

RELATED: Bristol-Myers surprise: Threatened I-O drug Opdivo stands its ground in lung cancer

It certainly wouldn’t be the first time in recent memory that Opdivo surprised industry watchers, many of whom have braced for the drug’s demise as Keytruda picks up steam in previously untreated lung cancer patients. Thanks to Keytruda’s indications in that setting, “lung cancer patients who previously would have been coming off chemotherapy will instead be coming off of Keytruda and unlikely to end up on another PD-(L)1 agent for 2nd line treatment,” Divan wrote. And that, of course, would leave Opdivo out of the running in that patient group.

But Opdivo has shown up. In last year’s second quarter, it blew past estimates on the back of a big second-line lung cancer performance; at the time, execs said the drug was hanging onto a leadership share of 30% to 35% in that setting. And after the following quarter, they pledged the drug would keep growing in 2019.

One reason? It’s not all about lung cancer, as Divan noted. “While investors have been especially focused on the dynamics in the 1L NSCLC market, we have consistently highlighted the overall I-O market opportunity, which we believe is still underappreciated,” he said, adding that “use in other indications is clearly boosting sales of both” Opdivo and Keytruda.

Bristol’s execs have been quick to make that same point, especially as Opdivo’s own future in first-line lung cancer grew more uncertain. Kidney cancer, though becoming increasingly crowded with treatments, is one area where they see continued success for the PD-1 blockbuster.

RELATED: The day has come: Merck’s Keytruda surpasses Bristol-Myers Squibb’s Opdivo in Q2 sales

Meanwhile, Keytruda’s win for the quarter will likely be maintaining the lead over Opdivo it finally nabbed last summer. Symphony data put U.S. sales of the drug at $1.13 billion, but Symphony has historically come in low with its Keytruda estimates; adjusting for that trend, “Keytruda could come in slightly lower than our estimates, and in-line with Street expectations” of $1.26 billion, Divan said.