JP Morgan 2017: Stealing their thunder? – Merck & Co. does it again

With the race heating up to deliver combination immunotherapies to market for first-line non-small-cell lung cancer, Bristol-Myers Squibb's presence at JPM17 was guaranteed to attract attention. The company delivered a bullish outlook for its portfolio, but risks losing further momentum following the surprise announcement by competitor Merck & Co. that it has submitted the combination of Keytruda plus chemotherapy for approval with the FDA much earlier than expected.

In recent months Bristol-Myers Squibb has been both stacking its cards and hedging its bets. Asked on Tuesday about the recent addition of Opdivo plus chemotherapy arms to its Checkmate-227 and Checkmate-586 studies (see ViewPoints: Bristol-Myers Squibb acknowledges potential threat of PD-1/chemotherapy combinations with new Phase III study), management indicated it likely that first-line treatment will be segmented as different patient types will benefit from different therapy options, be it with PD-(L)1 monotherapy or combinational approaches.

In doing so, Bristol-Myers Squibb can also boast the broadest combination pipeline in first-line NSCLC, said CEO Giovanni Caforio, including pairings of Opdivo with Yervoy – its marketed CTLA4 inhibitor - chemotherapy and its in-house IDO inhibitor.    

On this particular front Merck is running its compatriot close, having announced earlier this week that the combination of Keytruda with Incyte's IDO inhibitor epacadostat has progressed into Phase III studies in non-small-cell lung, renal, head and neck and bladder cancer. In the summer this same combination moved into Phase III studies for melanoma, where it could emerge as a competitive threat to Bristol-Myers Squibb's market-leading combination of Opdivo and Yervoy.

Speaking on Tuesday, Caforio said that Bristol-Myers Squibb has been encouraged by data from Opdivo when combined with both epacadostat and its own IDO inhibitor, which he believes to be a best-in-class product. With Merck's current leadership of the PD-1/IDO race clearly in focus, Caforio bullishly suggested the company will be able to move quickly in advancing its own combination thanks to its ownership of both assets. Owning both components should deliver additional future regulatory and commercial benefits, added Caforio, and could prove critical in terms of pricing strategy.  

However, Caforio was also quick to sharpen focus among investors on its nearer-term opportunity in first-line NSCLC with the combination of Opdivo and Yervoy, an approach "we are focused on primarily due to the strength of data," he added.

Superior efficacy for this combination versus the chemotherapy/PD-(L)1 pairings prioritised by Merck and Roche would allow Bristol-Myers Squibb to wrestle back some of the momentum lost since Opdivo monotherapy failed to best chemotherapy in first-line patients last year. Failure of the Checkmate-026 study has provided opportunity for rivals to gain ground on Bristol-Myers Squibb, although Caforio said lessons from this setback have been realised in the modifications to Checkmate-227 and Checkmate-586.

Bristol-Myers Squibb was dealt another significant blow on Tuesday, however, when Merck confirmed that it has filed data from the KN-021 cohort G study with the FDA supporting use of Keytruda plus chemotherapy in first-line NSCLC patients. These data, presented at the ESMO congress last year (see ESMO – the key players and how they performed), attracted a positive response from analysts and physicians alike.

Physician Views Poll Results: Oncologists impressed by Merck & Co.'s Keytruda/chemotherapy combo in first-line NSCL

It had been considered increasingly unlikely that Merck would file a supplemental BLA on the basis of the KN-021 data following failure of these results to be integrated into updated compendia guidelines in late 2016. Thus, filing of the combination has been brought forward some nine to 12 months versus expectation, noted Bernstein's Tim Anderson.

Evercore ISI analyst John Scotti noted that "while acceptance of the filing is obviously no guarantee of approval, the KN-021 data were impressive, and expectations for approval will likely be high." It had been expected that Merck would await data from its Phase III Keynote-189 study before filing and these pivotal results would presumably now be used for confirmatory purposes should the FDA grant an accelerated approval. Regulatory response could be swift, with Merck guiding towards a PDUFA date of May 10, well ahead of filings for alternative combinations and ahead of Phase III combination readouts from Bristol-Myers Squibb and Roche.

In what is poised to be a data rich year ahead in first-line NSCLC, AstraZeneca will shoot first when it unveils initial results from the MYSTIC study, assessing an in-house PD-L1/CTLA-4 combination of durvalumab and tremelimumab; the latter being the only near-term competitive threat to Yervoy. Progression-free survival data is expected to read out imminently and will provide the best clinical comparison of tremelimumab with Yervoy to date, with safety a potentially key area of differentiation.

Handicapping success for the MYSTIC study remains challenging, however. At a pipeline event in December, AstraZeneca provided no update on the study design and it remains unclear how the company will analyse cut-offs in PD-L1 expression or what statistical analysis plan it will use. AstraZeneca's absence from this year's JP Morgan Healthcare conference has deprived investors another opportunity to question management, while simultaneously ratcheting up anticipation levels around MYSTIC; now a key binary event for the company with significant implications for its long-term revenue guidance.

At Bristol-Myers Squibb, not only has management added the aforementioned chemo-combo arms to Checkmate-227 and Checkmate-586 (which includes an Opdivo/Yervoy plus chemotherapy combination), but the latter has steadily grown in size from 170 to 590 patients. Checkmate-586 is described by the company as a 'practise informing' rather than registrational study and is likely to read out in the second half of 2017 following cohort expansion. Management has continued to hint, however, that an earlier than expected filing for Opdivo plus Yervoy could be made this year, despite the fact that Checkmate-227 – its first controlled study – is not due to read out until 2018.

This presumably indicates that Bristol-Myers Squibb will assess the progression-free survival data from Checkmate-227 prior to the overall survival readout, while using the earlier completion of Checkmate-586 to inform analysis of the data, suggest analysts at Bernstein. This could be made feasible as a result of Bristol-Myers Squibb expanding the Checkmate-227 patient cohort by around 200 patients (an approximate 10 percent increase) in November.

The risk now, however, is that as Bristol-Myers Squibb seeks to regain lost ground, Merck will press home the advantage it already holds following Keytruda's approval last year as a first-line monotherapy treatment in high PD-L1 expressing NSCLC patients.

The KN-021G study enrolled all-comer patients irrespective of PD-L1 expression, which could see any approved label for a Keytruda plus chemotherapy combination encompassing the same population. This would theoretically open up use to the approximate 75 percent of newly diagnosed NSCLC patients not eligible for first-line treatment with Keytruda monotherapy; a market that Scotti says could be worth up to $14 billion in peak annual sales.

Likely approval of subsequent combination regimens will limit Merck's penetration of this market, but approval in May would "give them a significant first-mover advantage complemented by the combination with a cheap chemotherapy agent in a broader patient population," says Scotti. Merck, once again, has shown its ability to outmanoeuvre the competition.  

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