Bristol-Myers scores lung cancer survival data on Opdivo as Merck preps for Keytruda filing

Bristol-Myers Squibb ($BMY) and Merck & Co. ($MRK) rolled out some juicy news about their cancer immunotherapies as the JPMorgan Healthcare Conference got into full swing. And the tit-for-tat press releases turned up the spotlight on one of the most closely watched drug match-ups on the market.

Bristol-Myers got in the first punch Sunday, announcing that a key non-small cell lung cancer trial testing Opdivo against the standard chemotherapy docetaxel had already hit its goal and would be stopped early. The Checkmate-017 trial, one in a range of studies testing Opdivo, found that squamous NSCLC patients using the Bristol-Myers drug as a second-line treatment lived longer than those in the docetaxel arm.

It's not an unexpected result; ISI Group analyst Mark Schoenebaum says 70% of his surveyed investors expected the trial to stop early with positive results. But it's still a big deal for immunotherapies in general and Opdivo in particular. As Bristol-Myers pointed out, this is the first trial to show that a PD-1/PD-L1 drug actually helped patients live longer, compared with another cancer treatment rather than with placebo. The overall survival benefit is obviously good for Opdivo, backing up its case for quick expansion into lung cancer; in announcing the news, Bristol-Myers said it would be sharing the results with regulators.

Then, Monday morning, Merck said it would be asking the FDA to approve Keytruda for NSCLC patients in mid-2015. That means Keytruda could potentially win that approval during the second half of the year, setting up a close battle with Opdivo.

Last week, Bernstein analyst Tim Anderson predicted that Merck would file for the NSCLC approval in the first half of the year, and that Keytruda could hit the lung cancer market with a broader approval than Opdivo, at least at first. Even with the Checkmate-017 trial stopped early, that's still the case, Anderson wrote in a note to investors Monday; Keytruda's label would likely cover about three times as many patients as Opdivo's initial approval would. That's one reason why Bernstein estimates about $900 million in Keytruda sales for 2015, compared with Opdivo's $500 million estimate.

Roche ($RHHBY) has its own competitor that might go to FDA for approval soon, and that could throw forecasts off a bit. But for now, Bristol-Myers and Merck are the ones to watch--and Bristol-Myers just got a boost, however expected that boost may have been. "[W]e believe the probability of ultimate success in non-squamous NSCLC goes up with this study's early success," Leerink analyst Seamus Fernandez said in a Monday note, "and we expect [Bristol-Myers] to capture more of second-line squamous NSCLC than other immunotherapy competitors."

If Bristol's next data reveal--involving Checkmate-057, testing Opdivo in non-squamous NSCLC--shows an overall survival benefit, too, then Opdivo could gain that patient group, too. And by 2020, Bernstein expects Opdivo to bring in about $4.5 billion, compared with about $3.8 billion for Keytruda, because of Bristol-Myers' "broader development program," Anderson wrote.

- get the news from BMS
- read the Merck release

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