Less than a year after securing its first Chinese approval, in previously treated metastatic melanoma patients, Merck & Co.’s Keytruda has leapt ahead of Bristol-Myers Squibb’s Opdivo and nabbed a green light in newly diagnosed non-small cell lung cancer.
The new approval is for the combination of Keytruda, Eli Lilly’s Alimta and platinum chemo as first-line treatment of patients with NSCLC without EGFR or ALK mutations. And it’s based on the foreign Keynote-189 study, which showed the regimen could cut the risk of death by half.
With that, Keytruda has become the first PD-1/L1 to expand its Chinese label, and has outrun Opdivo—which was approved last June in previously treated NSCLC as the country’s first immuno-oncology agent—into the first-line setting. But that doesn’t mean blockbuster sales will be an easy threshold to cross for the Merck drug, according to at least one analyst.
Recently, Cantor Fitzgerald analysts wrote that Keytruda had a blockbuster opportunity in China that’s not factored into forecasts. But Hong Kong-based biopharma analyst Tony Ren disagrees. His main arguments? The Chinese lung cancer market for PD-1/L1s is not as big as some have projected, and without head-to-head studies, Keytruda will have a hard time fighting off several cheaper domestic drugs.
Like in the U.S., lung cancer is the most common cancer type in China, with about 782,000 new cases each year, according to a 2018 study done by China’s National Cancer Center based on 2014 numbers. By total number, that was more than three times the diagnoses the U.S. saw in 2018. But unlike in the Western market, EGFR mutations make up the lion's share in NSCLC in China.
About 680,000 new lung cancer cases in China are NSCLC, and of them, around 40% to 50% are EGFR-positive, according to different studies like this one or this one; the prevalence of EGFR mutations in the West is about 10% to 15%. These patients will likely get EGFR inhibitors such as AstraZeneca’s Tagrisso. In comparison, patients with high PD-L1 expression represent only about 5% in China. Among them, 40% are nonsquamous. So according to Ren's calculations, that leaves just 14,000 patients in line for Keytruda treatment, he said in an email interview.
Ren argued that using I-O in low PD-L1 patients “raises ... some questions” in developed markets. Even among key opinion leaders in the U.S., despite Merck's Keynote-189 study, “there is a view” that for non-squamous patients with levels of biomarker PD-L1 below 50% and “good performance status, using I-O on 2L after progressing on chemo is as good as using it on 1L,” he said.
Chinese firm Junshi Biosciences’ Tuoyi (toripalimab), the cheapest PD-1 available in China, costs about 100,000 Chinese yuan (about $15,000) a year after patient assistance programs (which most patients are eligible for), versus about 300,000 yuan for Keytruda post-PAP. Opdivo and Innovent’s Lilly-partnered Tyvyt (sintilimab) are offered at prices within that range.
Assuming an average market price in the middle, the PD-L1-high nonsquamous market in China is about $400 million a year. Even after adding another $400 million for the low PD-L1 group—whom the Keytruda-Alimta-chemo combo's approval covers—the Chinese lung market is barely $1 billion for PD-1s/PD-L1s.
Of course, there are also the squamous NSCLC and small cell lung populations, but Ren contended the available foreign data might not be strong enough to support the financial burden that comes along with the more expensive meds' use. Keytruda is already approved by the FDA, in tandem with chemo, in first-line squamous NSCLC. It's also awaiting an FDA decision in SCLC patients who have undergone at least two prior lines of therapy, and study Keynote-604 is testing it in the front-line setting.
Still, Ren conceded that Keytruda has the best data, but “[e]ven very strong data can be interpreted in different ways.”
And in the second-line setting, Opdivo seems to be establishing itself as the standard of care in China. Pointing to the Keynote-189 study, Ren noted that about 50% of patients in the control arm crossed over after progression, making the chemo arm appear “to have underperformed compared to what we’d usually expect,” he said. “What will it be when the majority (say 80% and 90%) of the chemo arm pts cross over and chemo arm starts to carry its weight?” he asked. And as Ren sees it, reserving PD-1/L1s for second-line use is the way the guideline and reimbursement will go.
Keytruda faces a hard fight ahead, and not just in lung cancer. Besides Opdivo, AstraZeneca’s PD-L1 Imfinzi and Roche’s Tecentriq are both awaiting approvals from China’s drug regulators. AstraZeneca seems to have a way with the Chinese market, having enjoyed double-digit sales growth quarter after quarter, and Roche’s Herceptin is the best-selling cancer drug in China’s history, according to Ren. While Junshi and Innovent are selling their first commercial products, seasoned domestic players BeiGene and Jiangsu Hengrui Medicine are both seeking approvals, too, with many more waiting in the wings.
All of these drugmakers are looking to get a piece of the lucrative I-O market. And every bit of share they get will hurt Keytruda’s chances to land blockbuster status.
“Without a head-to-head comparison (nobody is running such a trial), every Chinese firm will argue their drug is as good as or better than Keytruda, based on some snippets of data gleaned from cross-trial comparisons,” Ren said. “Many Chinese KOLs who participated in the trials of the local firms will certainly argue this way," he added.
High pricing has already put Keytruda in a disadvantaged position. And Chinese authorities will also want domestic players to counterbalance the multinational companies, Ren observed.
That fight between local firm proponents and supporters of multinational drugmakers has already spread to China’s popular social media platform, WeChat. Team China is working to tell a Chinese innovation story, claiming that local drugs are as good as foreign-made ones. Team Multinationals, meanwhile, is attacking their lack of mature data.
Despite the rhetoric targeting consumers, Ren figured decisions will still be made largely by physicians, given the complexity of the data, and that “[t]he financial incentives offered to the docs by the Chinese firms can be very tempting."
“I used to believe that data is the key to the clinical success of a drug in China but I'm increasingly doubtful,” he said. “I now believe marketing and selling effort is the most important in China, more so than data.”
Outside of lung, China experiences higher prevalence of some cancer types than the U.S. does. However, in gastric cancer, China’s second-most common cancer with new cases numbering 410,000 per year, and in liver cancer, which sees 365,000 new cases each year, Keytruda has stacked up failures in patients who have been treated before. In breast cancer, Roche recently consolidated its lead, with an FDA nod in the triple-negative form of the disease.
But on the bright side for Merck, In esophageal cancer, which affects 258,000 new Chinese patients each year, the Keynote-181 trial recently showed Keytruda as a second-line monotherapy could cut the risk of death by 31% compared to traditional chemotherapy in PD-L1-positive patients.