Merck & Co Inc, maker of the only immunotherapy approved for patients newly-diagnosed with the most common type of lung cancer, could solidify its lead by playing the long game, even as rivals edge closer.
Shares of Merck have fallen 10 per cent since the drugmaker several weeks ago said it would make survival a main goal of a key lung cancer trial for immunotherapy Keytruda, extending the study by up to a year.
In the meantime, Roche Holding AG has shaken up Wall Street expectations for the $15-billion lung cancer market, showing its Tecentriq immunotherapy slows the spread of advanced lung cancer when combined with older treatments. Roche Chief Executive Severin Schwan said the Swiss company has "the potential to get into the lead in first-line lung cancer."
Some Merck investors and medical experts are betting it will be worth the wait to prove that Keytruda can extend lives. Modifying the study - which previously measured cancer progression - moved completion to February 2019 from early 2018.
"Adding survival makes a lot of sense. The benefit of these drugs tend to come out over a longer period of time," said Karim Suwwan, manager of Fidelity's Select Pharmaceutical Portfolio. The fund ranked immunotherapy rivals Merck, Bristol-Myers Squibb and AstraZeneca in its top 10 holdings as of September 30.
Non small-cell lung cancer (NSCLC) patients in Merck's Phase 3 study are treated with Keytruda plus the chemotherapy drugs Alimta, sold by Eli Lilly & Co, and carboplatin, or with chemo alone.
"The validity of the results will be stronger if there is a survival benefit," said Dr Roy Herbst, chief of medical oncology at Yale Cancer centre, who has been involved in several immunotherapy trials.
An earlier trial in similar patients indicated that initial treatment with Keytruda and chemotherapy improves survival, but it was too small to be definitive. Merck research chief Roger Perlmutter said making survival a primary goal of the larger study aims to confirm this outcome.
Based on the smaller study, U.S. regulators in May approved the chemo plus Keytruda combination. Keytruda alone is also approved as an initial treatment for lung cancer patients whose tumours have high levels of PDL1, a protein targeted by the drug.
In Roche's Phase III study presented last week, patients getting Tecentriq plus the older drug Avastin and chemo drugs carboplatin and paclitaxel lived for an average of 8.3 months without their disease getting worse, only modestly better than the 6.8 months seen for those getting chemotherapy and Avastin. More than a quarter of patients given the four-drug combination suffered serious side effects.
Sandra Horning, chief medical officer at Roche's Genentech unit, said survival results are expected in the first quarter of 2018.
Bristol and AstraZeneca also expect to report data from key lung cancer immunotherapy combination trials early next year.
Keytruda and Tecentriq, as well as Bristol's Opdivo and Astra's Imfinzi, are designed to unleash the body's immune system to attack cancer cells, and have been approved for a variety of cancers.
Lung cancer is the biggest oncology market, with about 220,000 people in the United States due to be diagnosed this year and 155,000 seen dying from the disease often caused by smoking.
Some industry experts expect Merck to release initial survival results as early as mid-2018. That could allow the company to expand use of the drug more quickly to patients without PDL1 in their tumours, and build a stronger case for European approval, said Tony Butler, managing director at equity research firm Guggenheim Securities.
For Tony Scherrer, co-portfolio manager at Smead Capital Management, Merck is justified in taking a slower road. Smead owns shares of Merck, but not Bristol, Roche or AstraZeneca.
"Others tried to speed up and didn't get past the FDA," he said. "Merck is doing what Merck has done over a long history - get it done right."
Shares of Merck trade at 13.6 times 2018 earnings estimates, a discount to their five-year average of 15 times, according to Thomson Reuters Datastream.
For 2023, Wall Street analysts forecast Keytruda sales of $11.6 billion, Opdivo sales of $7.7 billion and Tecentriq sales of $4.7 billion, according to Thomson Reuters data.
Drugmakers, doctors and patients have hoped that new, less toxic immunotherapies could replace chemotherapy for many cancers, but that works for only a minority of patients. So drugmakers began combining the newer therapies with chemo, other older cancer drugs and experimental treatments.
Hundreds of these trials are underway. Some have disappointed, including a cocktail of Bristol’s Opdivo with another immunotherapy, Yervoy, in lung cancers. Chemo alone tends to help only 30 per cent of advanced lung cancer patients.
Researchers say that chemo could act as a catalyst, creating cellular debris that makes tumour cells more visible to the immune system.
"Nobody knows what chemo backbones could be the most powerful, and data will win out here," Daniel Chen, head of cancer immunotherapy at Roche, told investors in October.
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