Coverage: Merck reports positive results for cancer drug

Merck & Co. disclosed Monday that its Keytruda cancer medicine helped previously untreated lung cancer patients live longer than chemotherapy in a late-stage trial, which may solidify its position as the leading drug maker in this lucrative market.

Tamara Mathias of Reuters had the story:

Shares of the drugmaker were up 3.1 percent at $55.07.

Merck is already considered the frontrunner in the space and Keytruda is expected to earn peak sales of over $10 billion in 2023, according to Credit Suisse.

Keytruda is already approved in the U.S. to treat patients with non-small cell lung cancer (NSCLC) who have not received prior therapies and whose tumors show PD-L1 protein levels of 50 percent or greater.

If the company can show that the new data benefits patients whose PD-L1 expression is between 1 and 49 percent, it would expand Keytruda’s market and raise the competitive benchmark for rivals Bristol-Myers Squibb and AstraZeneca Plc, BMO Capital Markets analyst Alex Arfaei said.

An independent data monitoring committee determined the trial, which tested Keytruda as a monotherapy to treat NSCLC, extended the lives of patients significantly compared to chemotherapy.

Carly Helfand of FiercePharma reported that the trial was closely watched by competitors:

In a closely watched trial, the blockbuster topped chemo at improving overall survival among first-line patients with the disease. And that benefit extended across PD-L1-positive patients in the study, regardless of their level of PD-L1 expression.

The results follow an approval from late 2016 that cemented Keytruda’s place at the top of the I-O heap. NSCLC is the most lucrative market for the new therapies, and Keytruda was the first—and still is the only—PD-1/PD-L1 drug to win a monotherapy approval in the first-line space. That nod was for patients with PD-L1 levels of 50% or higher, though, meaning the new data could extend to many more patients; about 70% of all first-line patients are PD-L1 expressers, Bernstein analyst Tim Anderson wrote to clients.

With the top-line data, Keytruda will displace chemotherapy “as the reference for the majority of patients,” Anderson noted. The results “change the way patients, physicians and payers” will value each of the approaches in development, ranging from monotherapies to chemo combos to CTLA4 combos.

“Where the data for the combination options overlap with Keytruda, the incremental gain and incremental cost will be measured relative to it—not chemotherapy,” Anderson wrote.

Mamta Badkar of the Financial Times reported that Merck stock had its best day since 2016:

Merck shares jumped more than 7 per cent to $57.12 and were eyeing their best day since August 2016 after the company said a late stage trial of its immunotherapy Keytruda showed the drug helped prolong lives of patients with a certain type of lung cancer. Immunotherapies work by allowing the body’s own immune system to attack tumour cells.

The company said that an analysis by the independent Data Monitoring Committee showed that Keytruda as a monotherapy to treat non-small cell lung cancer resulted in “significantly longer overall survival” in patients than those treated with chemotherapy. Barclays analysts said of the results: “Given the data, we continue to expect adoption of Keytruda and a strengthening of Merck’s market leadership position.”

The results step up pressure on rivals like Bristol-Myers Squibb and Roche which are expected to reveal the results of their lung cancer studies in April.

Meanwhile, shares in AbbVie — a biotech slotted under the broader S&P 500 pharmaceuticals sector — jumped more than 3 per cent to $92.85 after the company received a positive update on its key rheumatoid arthritis drug Upadacitinib.