ViewPoints: Will AstraZeneca's decision to cuddle up with Merck & Co. be justified?

AstraZeneca's recently announced oncology collaboration with Merck & Co. has attracted considerable scrutiny. The main accusation is that in signing away co-development and co-marketing rights for the PARP inhibitor Lynparza, AstraZeneca has given too much away as it seeks to shore up its bottom line. Its riposte is that clinical opportunities tied to Lynparza are too great to manage alone. Furthermore, Merck was the best partner AstraZeneca could bag; and announcements on Wednesday support the UK company's argument.

Firstly, Lynparza has been granted priority review by the FDA as a potential treatment for germline BRCA-mutated, HER2-negative metastatic breast cancer, previously treated with chemotherapy in the neoadjuvant, adjuvant or metastatic settings. In addition to being the first PARP inhibitor to deliver positive pivotal-stage data in a tumour type other than ovarian cancer, Lynparza should beat competitors into non-ovarian cancer indications by some margin; an FDA decision in breast cancer will come by February 2018 at the earliest. 

As an aside, this announcement retains important momentum for AstraZeneca in translating clinical successes into regulatory endpoints; earlier this week, its PD-L1 inhibitor Imfinzi was accepted for review by the FDA for unresectable, stage III NSCLC, following quickly after similar acceptance in the EU – ViewPoints: AstraZeneca's key cancer hopefuls gain regulatory momentum.

AstraZeneca is accelerating its research in earlier stages of lung cancer; an area of the market competitors have not targeted, but where the UK company could carve a sizeable commercial niche, nonetheless (see Spotlight On Interview: AstraZeneca strikes back). If this is the sort of investment AstraZeneca has argued would be curtailed by developing Lynparza alone, another reason to justify its deal with Merck is the market prominence of Keytruda, the company argues.

Although AstraZeneca retains blockbuster aspirations for Imfinzi, there is no doubt that Merck's rival PD-(L)1 inhibitor benefits from both a catalogue of approvals and commercial momentum. In particular, Keytruda has rapidly become established as the immunotherapy benchmark in the large NSCLC market; its dominance likely enhanced by new data released on Wednesday showing that in first-line lung cancer patients with PD-L1 expression levels of 50 percent or more, Keytruda more than doubled median overall survival versus chemotherapy after two years of follow-up.    

On Wednesday, analysts at Citi upgraded peak forecasts for Keytruda from $9 billion to $16 billion, which if realised would position Merck's PD-1 inhibitor as one of the best selling drugs of all time. "Merck's success with Keytruda has clearly outperformed our initial expectations which were based on its historic absence as a major oncology player," commented Citi analyst Andrew Baum, adding "while competitors have clearly sought to learn from Merck, the breadth and depth of Keytruda' s clinical trial program and boldness to commit significant capital to promising external modalities ... gives it a likely sustained significant advantage, we believe."

A key focus of the Lynparza deal will be AstraZeneca and Merck's respective efforts in studying the PARP inhibitor with Imfinzi and Keytruda; piggy-backing on Merck's more popular PD-(L)1 inhibitor should bring financial rewards; AstraZeneca will book all Lynparza product sales and gross profits will be shared equally.

There is more prioritisation to be done at AstraZeneca on the back of Phase I/IIb data for the combinations of Tagrisso and Iressa with the c-met inhibitor savolitinib, presented at the World Conference on Lung Cancer (WCLC) in Japan this week. Savolitinib has been developed by Hutchinson China-Meditech and is being co-developed with AstraZeneca under a collaboration signed in 2011.

With the combination of savolitinib and Iressa demonstrating a response rate of around 52 percent in T790 mutation-negative patients, and the pairing of savolitinib and Tagrisso associated with response rates of between 50 percent and 60 percent in either T790 mutation-negative or -positive patients, analysts at Deutsche Bank described the data as showing "a meaningful improvement over standard of care in a difficult to treat patient population;" specifically EGFR mutation NSCLC with MET amplification.

The data are "encouraging," note analysts, who remain positive on the likelihood that AstraZeneca will perceive the combination to be de-risked and suitable for progression into global late-stage testing. Another factor to consider that could expand the commercial opportunity for savolitinib in China is improved access to first-generation EGFR targeting therapies, they note, which in turn could expand the market for therapies targeting escaping mechanisms. They add that while the prevalence of MET amplification in first-line patients is "relatively modest," – at around 6 percent – the abundance of EGFR therapies could drive prevalence up to 20 percent in resistant patients and 30 percent in T790m-positive patients. China, it should be remembered, is a key focus for AstraZeneca.

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