Immuno-oncology drugs that block the checkpoint PD-1 have been one of the biggest success stories in the pharma industry, creating blockbusters like Bristol Myers Squibb’s Opdivo and Merck’s Keytruda. The embrace of the drugs to treat many types of metastatic cancer has created a $23 billion market.
But that market is slowing, raising a worrisome question on Wall Street: How can companies like BMS and Merck continue to fuel the growth of PD-1 inhibitors?
The answer is in “pan-adjuvant” settings, in which patients are given PD-1 blockers before and/or after surgery along with other treatments to boost their chances of beating their cancer, analysts at Bernstein said in a note to investors earlier this week. For Merck and BMS, pan-adjuvant approvals could add at least $12 billion to their annual haul from PD-1 drugs in the next eight years—with the lion’s share of that going to Keytruda, they predicted.
BMS and Merck have already benefited from regulatory approvals of their PD-1 blockers in the post-surgery melanoma market, which brings in $1.4 billion for the companies, split between the two, the Bernstein analysts said. But beyond melanoma, pan-adjuvant settings “are untapped territories,” they wrote.
That’s about to change. Merck and BMS have pivotal trials underway in 14 pan-adjuvant indications apiece, the analysts figure.
By far the biggest of those opportunities for Merck is non-small cell lung cancer (NSCLC). Merck’s pivotal pan-adjuvant Keytruda trials in NSCLC are likely to read out next year, and, if the program is a success, it could add $2 billion to the drug's sales, the analysts estimated.
BMS’ pan-adjuvant program, meanwhile, is narrower that Merck’s, with the biggest opportunity likely to come from the melanoma market, which could generate an additional $1.7 billion in sales. Bernstein analysts projected that pan-adjuvant use of Opdivo in NSCLC would bring in $530 million.
The analysts calculated the likelihood of success for PD-1 blockers in pan-adjuvant settings based on numerous factors, including the typical rate of cancer recurrence after surgery and how effective Opdivo and Keytruda have been as single agents in metastatic cancer. They tagged PD-1 blockers as having a 75% chance of succeeding in pan-adjuvant clinical trials for NSCLC. The drugs were also given 75% odds of succeeding in bladder cancer, cutaneous squamous-cell carcinoma, esophageal cancer and triple-negative breast cancer.
Still, competition will be challenging for all the players in the pan-adjuvant market. There are ongoing trials in adjuvant kidney cancer, not just of Opdivo and Keytruda, but also of PD-1 blockers from AstraZeneca and Roche, Bernstein analysts said. And even though the analysts predict Merck will take 40% market share in NSCLC, Roche’s Tecentriq could pose a threat.
All in all, the analysts see Merck bringing in $7.2 billion in sales of Keytruda in pan-adjuvant settings by 2028, not just from kidney cancer and NSCLC but also from melanoma and other cancers. “However, the range is broad and revenue can end up being as high as $17B,” they wrote, especially if Keytruda outperforms competitors like Tecentriq with its data readouts.
BMS, for its part, will record $4.8 billion in pan-adjuvant sales of Opdivo by 2028, the analysts predicted. Even though six of the company's 14 trials in pan-adjuvant settings will read out by the end of next year, “this is a very competitive market and we don't expect Opdivo to be the market leader,” they said.
As for the overall pan-adjuvant market for PD-1 inhibitors, stay tuned, the analysts advised. “We already have some early pan-adjuvant data, but the next 12 months are the 'make-or-break' period for these indications,” they said.