Merck's Seattle Genetics ADC deal extends blockbuster Keytruda franchise: analyst

Merck & Co.’s Keytruda is already undoubtedly the king among immune checkpoint inhibitors. And the New Jersey’s pharma’s new investment in an antibody-drug conjugate (ADC) could extend that megablockbuster franchise even further, according to one analyst.

Merck on Monday unveiled a $1.6 billion licensing deal for Seattle Genetics’ experimental ADC ladiratuzumab vedotin (LV), which is already being paired with Keytruda in clinical trials in metastatic triple-negative breast cancer (TNBC).

For Merck, the deal at the least gives the company a foothold in the hot ADC arena, and “at best, tightens Keytruda’s place in highly synergistic ADC combinations,” SVB Leerink analyst Daina Graybosch wrote in Tuesday note to investors.

Keytruda already has multiple FDA-approved indications in which it’s being paired with chemotherapy. In newly diagnosed TNBC patients with lymph node metastasis, data unveiled at last year’s San Antonio Breast Cancer Symposium (SABCS) showed that adding the PD-1 inhibitor to standard chemo ahead of surgery helped clear signs of cancer cells in removed tissue. And results from the Keynote-355 study helped a Keytruda-chemo combo earn an FDA priority review in locally recurrent tumors that can't be surgically removed or metastatic disease, provided patients express levels of biomarker PD-L1 that hit a combined positive score of 10 or higher.

However, according to Graybosch, the industry is still trying to figure out which chemotherapies are most productive in immuno-oncology pairings. Early data from the Keytruda-LV cocktail “suggest this ADC approach may hit the sweet spot,” she said.

RELATED: Merck to pay Seattle $1.6B for ADC work as ex-partner Immunomedics nabs the big bucks buyout

LV delivers the vedotin toxic payload to tumor sites by targeting LIV-1, which is expressed in more than 90% of metastatic breast cancer cases and at lower rates in multiple other tumors. The combination of Keytruda and LV significantly shrank tumors in 35% of new TNBC patients in an ongoing Phase 1b/2 trial, according to data unveiled at last year’s SABCS.

But right now, industry watchers don’t yet know for sure whether the ADC is mostly responsible for the early signals, rather than a synergistic effect between the ADC and Keytruda.

While sifting through existing data for possible clues, Graybosch noted that a hallmark of immuno-oncology therapy in TNBC is a “precipitous drop” in efficacy as the therapy moves to later lines of treatment. “We see an echo of this trend in the data with LV + Keytruda, hinting at an IO mechanism and meaningful Keytruda contribution,” she said in her note.

The first definitive word could actually come from Keytruda’s archrival, Bristol Myers Squibb’s Opdivo. The phase 3 CheckMate-812 trial, which pairs Seattle Genetics’ fellow vedotin-based ADC Adcetris with Opdivo in classical Hodgkin lymphoma, bears a primary completion date this year, Graybosch noted. Keytruda previously topped solo Adcetris in the disease, but analysts were quick to point to the Opdivo-Adcetris combo as regimen that holds the most potential in the setting.