AstraZeneca's Imfinzi fails key Mystic trial in lung cancer. What now?

AstraZeneca has spent the last 16 months trying to keep investors’ hopes alive that a key immuno-oncology trial in the all-important previously untreated lung cancer field could still turn out positive after an initial flop. But it didn’t.

On Friday, the British drugmaker said that both Imfinzi on its own and a combination of Imfinzi and CTLA4 candidate tremelimumab had failed to top chemotherapy at extending patients’ lives in the closely watched phase 3 study, dubbed Mystic. And in a twist, the Imfinzi combo seemed to perform worse than solo Imfinzi did in the population, which featured patients whose tumors expressed protein PD-L1 on 25% or more of their cancer cells.

The news is a big blow to the drugmaker, which—like its rivals—had been hoping to snag a piece of immuno-oncology’s largest market. Bristol-Myers Squibb and Roche are also vying for first-line approvals with their PD-1/PD-L1 combinations, chasing undisputed leader Merck. But while those drugmakers have faced hurdles of their own—including regulatory setbacks and data that hasn’t necessarily wowed industry watchers—they both one-upped AstraZeneca by hitting the significance mark in clinical trials.

“We are disappointed that these results missed statistical significance,” AZ R&D chief Sean Bohen said in a statement.

RELATED: AstraZeneca's Mystic shortfall is an immuno-oncology shake-up for Bristol-Myers and a bolster for Merck and Roche

The latest results follow up on Mystic data from last July, which showed that the Imfinzi-tremelimumab pairing couldn’t beat chemo or solo Imfinzi at staving off lung cancer progression. Since then, though, company executives had repeatedly reminded shareholders that drugs that fail to keep cancer at bay can still wind up lengthening lives.

Now, AZ says, it’ll turn its attention toward trial subpopulations—“the data support further analysis in exploratory subgroups,” the company said—as well as other front-line lung cancer studies, one of which will test the PD-1/PD-L1-plus-chemo approach that worked out fantastically for Merck.

“We remain confident in Imfinzi as the cornerstone of our I-O program and continue to evaluate its potential in ongoing non-small cell lung cancer trials,” Bohen said.

RELATED: AstraZeneca gets back to growth, but can it hit $40B by 2023? CEO says yes—again

Meanwhile, outside of the first-line lung market, AstraZeneca’s oncology strategy is paying off. Imfinzi, which launched recently as a treatment for stage 3 lung cancer that can't be surgically removed, generated sales that hit 9% above consensus on its way to what analysts expect to become blockbuster numbers. And targeted lung cancer Tagrisso surpassed expectations, too, generating $506 million in sales that helped AZ get back to growth after a hard fall off the patent cliff.

Without an approval in the first-line lung cancer market, though, the company could run into trouble hitting the ambitious sales targets its CEO has set out. Chief executive Pascal Soriot has promised between $40 billion and $41 billion in revenue by 2023, well above the $15.3 billion the company's amassed through the first nine months of 2018.