Regeneron and Sanofi won't dethrone Merck in lung cancer despite strong Libtayo data: analysts

Libtayo bottle and box
Approval of the PD-1 blocker Libtayo in lung cancer looks likely, but developers Regeneron and Sanofi will struggle to gain traction against Merck's Keytruda, analysts predict. (Sanofi Genzyme/Regeneron)

Last week, Regeneron and Sanofi unveiled impressive data from a study of their PD-1 inhibitor Libtayo in non-small cell lung cancer (NSCLC) showing that the drug significantly cut the risk of disease progression or death in some previously untreated patients when given alone. The FDA is now weighing approval of the drug in that setting.

But were the data good enough for Regeneron and Sanofi to dethrone Merck’s PD-1 blocker Keytruda, the undisputed leader of the first-line NSCLC market and a mega-blockbuster at $11 billion in total sales per year?

Unlikely. But Libtayo’s makers could inch the drug toward blockbuster territory if they’re able to pull off an ambitious development plan, analysts said after the results were reported at the virtual meeting of the European Society of Clinical Oncology (ESMO).

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“Although we recognize that Keytruda is deeply ingrained with docs, likely making it difficult for Libtayo to garner significant market share in the NSCLC setting, in our view there’s a more important strategic argument to be made here in that [Regeneron’s] in-house, Keytruda-like anti-PD-1 can serve as a foundational element to build out their oncology franchise,” Piper Sandler analysts wrote in a note to investors.

RELATED: ESMO: Regeneron and Sanofi gun for Libtayo in first-line NSCLC with fresh survival stats

During ESMO, Regeneron and Sanofi reported that in a trial with 710 NSCLC patients, Libtayo given alone cut the risk of death by 43% compared with chemo in patients with levels of biomarker PD-L1 of 50% or higher. In those people, the risk of disease progression was also 46% lower than it was in the chemo arm. The companies stopped the trial early to let the control patients switch over to Libtayo.

That performance was impressive, for sure, but then Merck turned up at ESMO with competitive long-term data for Keytruda monotherapy in NSCLC. The drug doubled the five-year survival rate in patients with PD-L1 levels above 50% compared with chemo, Merck said. Patients in the trial taking Keytruda alone had responses lasting a median 29.1 months, while those on chemo saw benefits for just 6.3 months.

RELATED: ESMO: Merck's Keytruda doubles 5-year survival rate for lung cancer patients

Regeneron and Sanofi are aiming for FDA approval of Libtayo as both a monotherapy and in combination with chemotherapy. Still, Piper Sandler analysts predict the drug will only be able to claim market share in NSCLC in the mid-single digits. Analysts at SVB Leerink were equally pessimistic, declaring in a note to investors that “we think success will come down to commercial prowess, and Merck is hard to beat on that.”

After parsing Regeneron and Sanofi’s ESMO data, SVB Leerink analysts concluded in a note that FDA approval of Libtayo in first-line NSCLC is likely but that the survival data for Keytruda looks slightly better. Therefore “none of the [trial] results give Regeneron and Sanofi … any promotional leverage against Merck’s juggernaut brand.”

But there could be a much bigger opportunity for Libtayo in dermatology, where the drug is currently approved to treat cutaneous squamous cell carcinoma. Regeneron and Sanofi are also testing Libtayo as a monotherapy in basal cell carcinoma, and at ESMO they reported that the drug elicited a response in 31% of patients who did not respond to hedgehog inhibitors that are typically prescribed as the standard of care. The companies did not reach median overall survival at the end of the trial, but they estimated the probability of survival was 92%.

Regeneron and Sanofi’s development plan for Libtayo includes testing the drug both alone and as part of combo strategies in a wide range of tumor types, including melanoma, Hodgkin lymphoma and colorectal cancer. If the companies succeed, the drug could be pulling in $1.5 billion in sales in 2025, Piper Sandler analysts estimate.

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