Pfizer, Merck KGaA's Bavencio flops in 'high-risk' stomach cancer trial

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Pfizer and Merck KGaA's Bavencio currently bears indications in bladder cancer and Merkel cell carcinoma.

Pfizer and Merck KGaA are working to carve out a niche for immuno-oncology drug Bavencio in a crowded field. But a failed phase 3 trial in advanced stomach cancer just dinged their ambitions.

Tuesday, the companies said Bavencio (avelumab) failed to outperform physician’s choice of chemo at improving overall survival among third-line metastatic gastric or gastroesophageal junction adenocarcinoma patients. The trial enrolled 371 patients regardless of their PD-L1 expression levels.

As the pair was quick to point out, third-line gastric cancer “is a particularly hard-to-treat and heterogeneous disease, and importantly, this was the first trial conducted with a checkpoint inhibitor compared to an active chemotherapy comparator rather than placebo in a global patient population," Luciano Rossetti, EVP and global R&D head of Merck KGaA’s biopharma business, said in a statement.

It’s also a significant market opportunity; gastric cancer is the fifth most common type of cancer, with 950,000 new cases recorded in 2012, but it’s the third most common cancer killer.

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That’s not to say Bavencio would have been alone in the field. In September, Merck’s PD-1 powerhouse Keytruda picked up an FDA nod in gastric cancer patients who've received at least two prior rounds of therapy and whose tumors express PD-L1. And earlier that month, Bristol-Myers Squibb's Opdivo nabbed a Japanese go-ahead in patients who have progressed after chemo.

The way Evercore ISI analyst Umer Raffat sees it, there's no reason for investors to fret. "Based on cross trial comparisons, Pfizer’s 3L gastric ... was a very high risk trial to begin with … and the fact that it didn’t work doesn’t necessarily imply that avelumab is worse off on efficacy vs Opdivo/Keytruda etc.," he wrote to clients Tuesday.

Still, a win could have given the Pfizer-Merck med a boost. Currently, it bears indications in bladder cancera space where its other four I-O rivals also boast approvalsand Merkel cell carcinoma, a rare disease that affects about 1,600 new U.S. patients each year.

The companies aren't giving up gastric, though. They're currently trialling Bavencio as a first-line maintenance therapy for patients who have undergone chemo, and that trial will continue as planned, they said.

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Meanwhile, analyst questions about whether megadeal-prone Pfizer will ditch Merck and pursue a buy of one of its I-O rivals just won’t die down, as much as the New York pharma giant would like them to.

“I've actually, I think, addressed a couple of questions from you on calls about our partnership with Merck. And I don't really think it would be helpful to add any more comments,” CEO Ian Read told Bernstein’s Tim Anderson on October’s third-quarter conference call, adding, “we remain committed to our programs with our partner.”