Merck increases grip on its lead in lung cancer, winning approval for Keytruda/chemo combo as first-line therapy

Merck has won its bid to advance its leadership in treating the crucial non-small cell lung cancer market, gaining an FDA approval to start marketing a combination of its PD-1 drug Keytruda with chemotherapy as a first-line therapy. And its shares immediately popped, surging 4% on the news in after-market trading while rival Bristol-Myers Squibb took another beating, sliding 2%.

Merck built its bid for an accelerated approval around Phase II data demonstrating that the chemo/checkpoint combo spurred a much higher concentration of overall responses for NSCLC than chemo alone — 55% vs. 29%, P = 0.0016. High PD-L1 expressers did even better, though the approval comes through for all patients regardless of biomarker status. Here’s the link to the new label.

That all translates into billions in revenue, with consensus sales forecast of $3.6 billion for 2017 revenue. And climbing.

Roger Perlmutter, Merck

Bristol-Myers unwittingly gave Merck’s rival therapy a big leg up when its big bid for a frontline approval collapsed in Phase III, forcing the big biotech to shake up its R&D group and refocus on its biggest single pipeline effort. While the checkpoints have been muscling into a variety of markets, Merck’s R&D team under Roger Perlmutter has won at least a temporary advantage in a blockbuster arena. And analysts have been acutely aware of the revenue potential — though nothing is written in stone in this fast-changing cancer field.

That lesson was reinforced Wednesday morning, when Roche announced the stunning failure of Tecentriq in a Phase III bladder cancer study, after it had already won an accelerated approval.

Seamus Fernandez at Leerink recently noted just how significant this decision was for Merck, writing:

We continue to look towards the 5/10/17 PDUFA data for the Keytruda (pembrolizumab; anti-PD-1) + chemo combo in first-line (1L) non-small cell lung cancer (NSCLC) for a meaningful acceleration in the drug’s US sales. Although this will help to drive top- and bottom-line growth towards the end of the year and into 1H:18, the large number of IO+IO and IO+chemo trials reporting during that period could dramatically alter the 1L NSCLC landscape.

When it comes to checkpoints, with 5 approved and more piling in, every new goal is attracting a swarm of rivals.

AstraZeneca, which just gained an unexceptional first approval for durvalumab in bladder cancer, has been putting all of its chips on the MYSTIC trial, which combines durvalumab with its experimental CTLA-4 therapy tremelimumab for lung cancer. But analysts have been increasingly leery about CTLA-4 as a combination, noting its high levels of toxicity — which may prove an easy target for a next-gen successor.

“This approval marks an important milestone in the treatment of lung cancer. Now, pembrolizumab in combination with pemetrexed and carboplatin can be prescribed in the first-line setting for patients with metastatic nonsquamous non-small cell lung cancer, irrespective of PD-L1 expression,” said Dr. Corey Langer, director of thoracic oncology and professor of medicine at the Hospital of the University of Pennsylvania, in a statement. “Physicians should continue to use each patient’s individual characteristics – including biomarker status, histology, and other clinical factors – to determine the best treatment plan for each person.”

Today Merck winds up one big step forward in NSCLC. How long it keeps that lead, though, is anybody’s guess.

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