Looking for a Xalkori boost, Pfizer adds targeted med to Merck IO pact

Pfizer isn't among the leaders in the hot immuno-oncology field. But the company is friends with one of them--Merck. And now, Pfizer has tied yet another cancer treatment to Merck's IO coattails.

The two companies have partnered up to study Pfizer's ($PFE) targeted lung cancer drug Xalkori in tandem with Merck's PD-1 up-and-comer, pembrolizumab. Pfizer will take the lead on an initial Phase Ib study, set to roll sometime in 2015.

It's the third time Merck ($MRK) has agreed to pair pembrolizumab with a Pfizer drug. The companies already are looking at Pfizer's Inlyta in a combo with the PD-1 treatment. They've also agreed to study pembrolizumab with a Pfizer immuno-oncology therapy, PF-2566, in a variety of cancers.

Pfizer's Xalkori was the first drug to win FDA approval to target cancers with ALK gene abnormalities. The ALK-positive population in non-small cell lung cancer amounts to a tiny percentage of patients, but Xalkori's impressive trial data helped back up a $11,500-per-month price tag. The drug rolled out in 2011, and since has grown to $400 million in annual sales, despite some roadblocks from cost-conscious U.K. and European gatekeepers.

But Xalkori now faces some competition. Novartis' ($NVS) new ALK-inhibiting lung cancer drug, Zykadia, won FDA approval in April. If a pembrolizumab-Xalkori combo succeeds, that could help fuel Xalkori's sales long-term. The same could be true for Inlyta, Pfizer's VEGF-targeted kidney cancer drug approved in early 2012.

- read the Reuters news
- here's Merck's statement

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