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Merck's lung cancer edge over Bristol-Myers grows at cancer conference

The ongoing rivalry between drugmakers Bristol-Myers Squibb Co. and Merck & Co. Inc. was yet again in focus at the world's biggest gathering of oncologists, where Merck sharpened its edge in lung cancer treatment with new data on its Keytruda immunotherapy.

Keytruda showed promise against the disease when combined with Incyte Corp.'s experimental epacadostat, as well as with chemotherapy. Merck's positive results were expected, and the company's stock price fell slightly over the course of the annual American Society of Clinical Oncology conference, or ASCO, which concluded June 6 in Chicago.

Meanwhile, a combination of Bristol-Myers' immunotherapy drugs Opdivo and Yervoy did not clearly increase two-year overall survival over Opdivo alone in patients with non-small cell lung cancer, much to the chagrin of investors, who pushed the drugmaker's stock down more than 5% by the end of the meeting. The trial found that 49% of patients were still alive on the combination after two years, compared with 44% on Opdivo alone.

Keytruda has a broader lung cancer indication than Opdivo due to a string of successful trials and leaves the conference further strengthened, while the wait for clearly improved overall survival from Bristol-Myers' combination therapy continues, analysts said. The Bristol-Myers combination was looking similar to Opdivo alone after one year as well, but there was some expectation that the combination has more of an effect after more time has passed, Evercore ISI equity analyst Umer Raffat wrote in a June 3 note.

Analysts stressed that the Bristol-Myers data was far from disastrous and urged careful interpretation.

"A conference call we hosted this evening with an immunotherapy expert provided a different perspective, as our expert continues to believe the efficacy from the Opdivo+Yervoy combo is impressive and more than what is seen otherwise," wrote Credit Suisse's Vamil Divan in a June 5 note. "As a result, he still prefers the combo, especially in patients that are younger and otherwise healthier and can better tolerate the potential toxicity."

The combination therapy did result in improved two-year progression-free survival, Jefferies analyst Jeffrey Holford noted June 5. Among combination therapy patients in the trial, 29% were alive and had not experienced worsening of their disease after two years, compared to 14% who received Opdivo alone. Holford expects the progression-free survival to be the key regulatory endpoint by the U.S. Food and Drug Administration when it makes an approval decision, boding well for Bristol-Myers.

Merck makes progress on combination therapies with Keytruda

The 80% response rate demonstrated by Keytruda and two chemotherapy agents against the disease during a trial presented at ASCO was encouraging, according to Morgan Stanley analyst David Risinger. The finding bolsters a recent FDA approval enabling use of Keytruda with Eli Lilly & Co.'s Alimta and a generic chemotherapy as an initial first-line therapy against non-small cell lung cancer.

Investors were more excited by the performance of Keytruda and Incyte's so-called IDO inhibitor epacadostat because it could lead to a new FDA-approved combination therapy indication. It produced an overall response rate of 35% among mostly patients who had already received a prior treatment. With 58 evaluable patients, the dataset is early and small but "continues to move in right direction," Credit Suisse's Alethia Young wrote in a June 3 note, adding that epacadostat does not significantly increase the side-effect profile of Keytruda.

The two positive combination therapy results, along with questions about Bristol-Myers' dual medication cocktail, should allow Merck "to continue to build on its leadership in lung cancer, while the broad dataset for Keytruda in many other tumor types reaffirms our view that Keytruda may become a foundation therapy in cancer for many years to come," wrote Credit Suisse's Divan in a June 5 note. To that end, the Incyte-Keytruda combination therapy also performed well in a renal cell carcinoma trial, while a separate combination therapy trial suggested that Keytruda could also add breast cancer to its long list of indications.

Bristol-Myers also ran a trial with epacadostat in patients with a variety of advanced cancers, including non-small cell lung cancer. The trial combining Incyte's IDO inhibitor with Opdivo demonstrated "promising efficacy, especially in head and neck cancer and melanoma," according to Morgan Stanley's Andrew Berens.

In addition, Bristol-Myers announced that it is advancing one of its internal IDO inhibitor candidates through the pipeline and promised efficacy data at the Society for Immunotherapy of Cancer conference in November. "While some investors may view BMY’s decision to advance its internal IDO agent BMS-986205 into registrational trials as a lack of conviction in its Opdivo+Yervoy combo, we see it as a prudent strategy to capitalize on an intriguing target, with an eventual triple therapy combination possible," Leerink's Seamus Fernandez wrote in a June 5 note.