Surprise Keytruda-chemo FDA filing puts Merck ahead in I-O combo race

Merck & Co.’s immunotherapy drug Keytruda is yet another step closer to eclipsing its competitors in lung cancer. In an out-of-the-blue announcement late Tuesday, the U.S.-based drugmaker said the FDA had accepted its application for a new Keytruda-plus-chemotherapy combo use that could expand its market considerably. And it was granted priority review to boot.

Merck had previously unveiled some impressive study data on the chemo combo approach, but analysts had figured the application itself wouldn’t go to the agency until late this year, with the FDA’s acceptance of it some time after that.

And in the context of a push by Bristol-Myers Squibb and Roche to win their own combo uses for immuno-oncology drugs Opdivo and Tecentriq, respectively, this early regulatory move was cheered by Merck analysts.

“This comes as an important surprise because if FDA approves the application, Merck would suddenly be catapulted ahead of all other PD1/PDL1 competitors who are also pursuing competing combination regimens of their own,” Bernstein analyst Tim Anderson said in an investor note. “It would be ahead of Roche's chemo combo, and ahead of Bristol-Myers Squibb and AstraZeneca’s CTLA4 combination programs.”

Merck’s application is based on data from the Keynote-021 trial, and, if approved, would be Keytruda’s first in combination with another drug, Credit Suisse analyst Vamil Divan pointed out Wednesday. Plus, it would expand Keytruda’s use in first-line lung cancer to potentially all patients with non-squamous NSCLC who don’t have EGFR or ALK mutations.

And that, in turn “would present a meaningful increase in the Keytruda market opportunity in NSCLC,” Divan said in an investor note, adding that a decision date in May—under priority review guidelines—would be “significantly sooner than we had expected” for the chemo combo.

That’s not great news for Bristol-Myers, which lost out on a near-term approval in first-line NSCLC with an unexpected trial flop last year. In the wake of that failure the company said it would focus its lung cancer work on Opdivo combinations; the PD-1 drug already has a combination approval, alongside Bristol-Myers’ Yervoy, in melanoma.

Indeed, Bristol CEO Giovanni Caforio said Tuesday at the J.P. Morgan Healthcare Conference that, based on his reading of the lung cancer data, “my perspective is that this market will transition very rapidly ... into a combination market.”

“[W]e saw that happening in melanoma and we expect similar dynamics” in lung cancer, Caforio said. "That's where you get the most value in terms of clinical efficacy for patients."