One disease and a blockbuster approach has dominated the stock performance of four global drugmakers for the past year and remains central to the conversation ahead of 2018's largest cancer meeting.
Checkpoint inhibitors — a group of tumor-targeting drugs that block either the PD-1 arm on healthy cells or the PD-L1 arm on cancer cells from linking up to spread the disease — have generated billions in annual revenue for Bristol-Myers Squibb Co., Merck & Co. Inc., AstraZeneca PLC and Roche Holding AG. They are projected to reap billions more as all four companies and upcoming contenders aim for first-line treatment of the world's top driver of cancer deaths, lung cancer.
The four companies will be presenting updated results at the American Society of Clinical Oncology's annual meeting in the coming days, a gathering that expects 32,000 attendees and more than 2,500 onsite abstract presentations.
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Bristol-Myers looked like the undisputed leader of the class until earlier this year, when Merck & Co.'s Keytruda plus chemotherapy results overshadowed data that same day for Bristol-Myers' Opdivo and another of its immuno-oncology therapies, Yervoy, during an April scientific meeting for the American Association for Cancer Research, or AACR.
The AACR results rippled outside of the Merck and Bristol-Myers rivalry, raising questions about how useful a doubled-up immuno-oncology, or IO, regimen could be — just as others look to enter the space.
Bristol-Myers' lead slips
In October 2017, well ahead of the AACR results but right around the time that Merck pushed back its own trial's completion date, Cowen analyst Steve Scala projected that Bristol-Myers would lead the checkpoint inhibitor group's sales through 2024, netting $15 billion itself that year.
Scala bumped that forecast down by $4 billion post-AACR, shifting the lung cancer market share to favor Merck.
While Opdivo still has a strong foothold for a range of other tumors, lung cancer's hold as the world's top driver of cancer deaths annually makes its most common variant, non-small cell lung cancer or NSCLC, a priority market for the four and other contenders such as Pfizer Inc. and Merck KGaA's partnered therapy Bavencio, or Sanofi and Regeneron Pharmaceuticals Inc.'s experimental asset cemiplimab.
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AstraZeneca's return
The stakes for checkpoint inhibitors' lung cancer trials have been high ever since AstraZeneca's July 2017 failure, which sent its stock tumbling more than 15% the day of the news and briefly shook confidence in other checkpoint inhibitor makers.
The British drugmaker's Imfinzi combined with an immunotherapy known as tremelimumab did not show any advantage over chemotherapy in stopping the disease from worsening — a measure known as progression-free survival — in a trial dubbed Mystic.
Tremelimumab blocks an immune system-suppressing protein called CTLA-4, the same target as Bristol-Myers' Yervoy.
AstraZeneca's total returns have since recovered, and the company will share results from 91 studies at ASCO, including two oral presentations on studies using Imfinzi in NSCLC.
Meanwhile, Bristol-Myers' returns have slipped steadily since April. Seventy company-sponsored studies will be shared during the meeting, including more data from CheckMate-227 — the trial eclipsed by Merck's Keytruda at AACR — that could show significant progression-free survival for Opdivo and chemotherapy versus chemotherapy alone.
Overall, there do not seem to be many surprises in the ASCO abstracts, but that could also be a positive update for Bristol-Myers, Evercore ISI analyst Umer Raffat said in a note.
Double IO questions mount
The jury is still out on the strategy of pairing IO drugs, one of Merck's chief scientists said in an interview in the wake of the AACR results.
"I don't think we have a definitive study with the appropriate controls in place that can say, in fact, that IO-IO is better than IO alone," Roy Baynes, Merck Research Laboratories' senior vice president, head of global clinical development and chief medical officer, said.
Regeneron and Sanofi, partners that many see as late to the checkpoint inhibitor game, are exploring their own PD-1 blocking product, cemiplimab, both alone and in combinations — and have watched the recent Bristol-Myers data closely.
The companies have an ongoing trial pairing cemiplimab with another IO therapy, REGN3767, but are adapting to the field, Regeneron's Israel Lowy, vice president of clinical sciences and head of translational science and oncology, and Sanofi's Joanne Lager, vice president and head of oncology, said in an interview.
There is still only one definitive leader in the checkpoint inhibitor space, Lowy added, referring to Merck's recent results.
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Room for surprise
Back in October 2017, Cowen's Scala predicted that Roche's Tecentriq would be best-positioned to snag the first approval among the four to be a frontline therapy for NSCLC.
The Swiss drugmaker delivered lung cancer results just days ahead of ASCO, showing that Tecentriq plus chemotherapy hit its primary goal, helping NSCLC patients live significantly longer than with chemotherapy alone. At the cancer meeting, it will share data from a similar study, IMpower-131, testing Tecentriq and chemotherapy in squamous NSCLC.
The next significant challenge on the horizon will be testing the checkpoint blockers' effectiveness in cancers that do not show high levels of PD-L1, the cancer protein. Merck, Bristol-Myers and the Regeneron-Sanofi partnership are all exploring this avenue in ongoing trials, but it is Merck's Keynote-042 trial that is likely to attract the most ASCO interest.
Keynote-042 tests Keytruda alone in patients with more than 1% PD-L1 expression, a sweeping range for the therapy.
While the company has already shared overall survival results for this trial, "what we don't know yet is if the success is largely due to strong responses from the high PD-1 patients or if those closer to 1% also saw compelling results," biopharma investor Brad Loncar wrote in an Endpoints preview for the meeting.
The 2018 American Society of Clinical Oncology meeting is expected to bring together more than 32,000 professionals from all over the world, with more than 2,500 study abstracts to be presented on site and an additional 3,350 abstracts to be published online.



