Merck extends all-important lung-cancer lead with phase 3 Keytruda combo win

Skittish investors grew increasingly concerned last year that Merck & Co. couldn’t replicate a Keytruda-chemo combo's phase 2 success in previously untreated patients. But on Tuesday, with phase 3 results in hand, the pharma giant silenced its doubters.

The study, dubbed Keynote-189, nailed both its endpoints, showing that Keytruda combined with Eli Lilly’s Alimta topped an Alimta-platinum chemo combo, by staving off cancer progression longer and—more importantly—extending patients' lives. Merck will share the detailed data, from an interim analysis of the trial, at an upcoming medical meeting, the company said.

The readout represents a “positive surprise” that “may point to a substantial benefit for the Keytruda + chemo combination,” Leerink Partners analyst Seamus Fernandez wrote to clients, pointing out that a final readout hadn’t been anticipated until 2019.

And it also “puts the conspiracies to rest,” as Evercore ISI analyst Umer Raffat put it in his own note. Those “conspiracies” developed last year after Merck withdrew its European Keytruda-chemo combo application for first-line lung cancer, a move the company made because of a small number of patients in its phase 2 trial, known as Keynote-021G.

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Skeptics viewed the maneuver “as a signal there could be some issue” with ‘189, hurting Merck shares. (Raffat, though, did his part to combat their fears, including the phrase “overblown concerns” in the subject lines of two separate investor notes.)

The new data should also boost Keytruda from a commercial perspective, Raffat figures, by reassuring physicians. The blockbuster already bears an FDA combo approval based on ‘021G, but “we had picked up feedback from docs that they wanted to see a confirmation of the phase 2 data before more widespread use,” he wrote.

And because “today's data is already ‘on label,’” Merck “can immediately begin to highlight the [overall survival] benefit to physicians,” Credit Suisse analyst Vamil Divan, M.D., wrote to his clients. Plus, “Hitting KN-189 phase 3 means Merck will likely get an EMA approval,” Raffat pointed out. And that closes the “opening for competitors … to reach ex-U.S. markets first,” Bernstein’s Tim Anderson added.

Right now, Keytruda is the only immuno-oncology product that boasts indications in the lucrative first-line lung cancer arena—and it has two, both in tandem with chemo and on its own.

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But that doesn’t mean plenty of challengers aren’t on their way to try to steal Keytruda’s crown. For starters, there’s Roche, which is trialing PD-L1 contender Tecentriq alongside chemo; Merck’s combo will have to eventually show it can outperform Roche’s if it wants to remain the go-to choice.

So far, analysts seem to think Keytruda can, based on recent results from the Swiss drugmaker’s IMpower150 trial, though they admitted the comparison, which pitted data against results from the phase 2 Keynote-021G study, wasn’t a great one.

One thing’s for sure, though: The “PD1 + chemo combination is now the bar to beat for any potential IO-IO regimens in development,” Raffat wrote. And that’s a big development for both Bristol-Myers Squibb and AstraZeneca, which are trialing a different approach combining PD-1/PD-L1 inhibitors with CTLA4 drugs, such as Bristol-Myers' Yervoy.

Those companies have even more to prove than Roche does; there’s no evidence that the pairings—BMS’ Opdivo and Yervoy, and AstraZeneca’s Imfinzi and candidate tremelimumab—can score in previously untreated patients. Bristol-Myers has yet to produce any data, and AZ's combo, for its part, came up short last summer in staving off disease progression, though the company has reminded investors multiple times that that result doesn’t preclude an overall survival benefit.

Whatever happens, though, it won’t be long before investors have more clarity around the first-line market in lung cancer. An interim overall survival analysis from Bristol-Myers’ trial, Checkmate-227, and a final overall survival analysis from AZ's study Mystic are both on their way, and results from those studies will help determine the overall IO “pecking order” in lung cancer, Bernstein’s Anderson has said.