Pfizer, Merck KGaA nab NICE's favor for Bavencio in Merkel cell carcinoma

Analysts have questioned whether Pfizer would stick with its Bavencio development program. (Pfizer)

After two recent trial flops, Pfizer and Merck KGaA are getting some good news around immuno-oncology contender Bavencio.

England’s National Institute for Health and Care Excellence (NICE) has issued a final verdict on reimbursement for the drug in its first indication, Merkel cell carcinoma, and it’s a positive one. The cost watchdog has recommended the drug for routine use in England, Wales and Northern Ireland for adults who have already been through one or more lines of chemo.

Patients in England who haven’t yet undergone chemo will have a shot at receiving the drug, too, thanks to the Cancer Drugs Fund (CDF). Of course, that’s provided the drugmakers provide an already-agreed-upon discount, known as a patient-access scheme.

The way NICE sees it, as a second-line therapy, Bavencio (avelumab) is cost-effective for the gatekeeper, which considers its price to be “within the range NICE normally considers acceptable for end-of-life treatments.” And it “has the potential to be cost-effective as a first-line treatment,” too, the body said in its final appraisal document, but it needs more data before it can move it off the CDF.

RELATED: Pfizer's Bavencio flops third key study, this time in lung cancer. Can crossover really explain it?

It’s a boost for Pfizer and Merck, which lately have struck out when it comes to widening Bavencio’s reach. The medication, already approved for bladder cancer in addition to MCC, came up short in a stomach cancer trial in November.

And while industry watchers may have given the companies a pass on that one—they pitted Bavencio against chemo, while rivals Merck and Bristol-Myers Squibb, who have both succeeded in the disease area, put their checkpoint drugs up against placebo—they couldn’t do the same last month, when Bavencio slipped in a second-line lung cancer trial.

“The news today on Pfizer’s 2L lung failure marks the first time we can start to say that PFE may have underperformed,” Evercore ISI analyst Umer Raffat wrote at the time.

RELATED: Does Pfizer really want Bristol-Myers? Likely, says one analyst. What's it waiting for?

Meanwhile, analysts have been watching Pfizer closely to see if it would stay with Merck and Bavencio or chase a big deal to buy one of its competitors. Last month, though, Pfizer’s immuno-oncology head said in a statement that it would “continue to pursue a broad program with avelumab," Bernstein’s Tim Anderson pointed out in a note to clients.