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 Shares of Merck have fallen 10 percent since the drugmaker several
weeks ago said it would make survival a main goal of a key lung
cancer trial for immunotherapy Keytruda, extending the study by up
to a year.
In the meantime, Roche Holding AG has shaken up Wall Street
expectations for the $15-billion lung cancer market, showing its
Tecentriq immunotherapy slows the spread of advanced lung cancer
when combined with older treatments. Roche Chief Executive Severin
Schwan said the Swiss company has "the potential to get into the
lead in first-line lung cancer."
Some Merck investors and medical experts are betting it will be
worth the wait to prove that Keytruda can extend lives. Modifying
the study - which previously measured cancer progression - moved
completion to February 2019 from early 2018.
"Adding survival makes a lot of sense. The benefit of these drugs
tend to come out over a longer period of time," said Karim Suwwan,
manager of Fidelity's Select Pharmaceutical Portfolio. The fund
ranked immunotherapy rivals Merck, Bristol-Myers Squibb and
AstraZeneca in its top 10 holdings as of September 30.
Non small-cell lung cancer (NSCLC) patients in Merck's Phase 3 study
are treated with Keytruda plus the chemotherapy drugs Alimta, sold
by Eli Lilly & Co, and carboplatin, or with chemo alone.
"The validity of the results will be stronger if there is a survival
benefit," said Dr Roy Herbst, chief of medical oncology at Yale
Cancer Center, who has been involved in several immunotherapy
trials.
An earlier trial in similar patients indicated that initial
treatment with Keytruda and chemotherapy improves survival, but it
was too small to be definitive. Merck research chief Roger
Perlmutter said making survival a primary goal of the larger study
aims to confirm this outcome.
Based on the smaller study, U.S. regulators in May approved the
chemo plus Keytruda combination. Keytruda alone is also approved as
an initial treatment for lung cancer patients whose tumors have high
levels of PDL1, a protein targeted by the drug.
In Roche's Phase III study presented last week, patients getting
Tecentriq plus the older drug Avastin and chemo drugs carboplatin
and paclitaxel lived for an average of 8.3 months without their
disease getting worse, only modestly better than the 6.8 months seen
for those getting chemotherapy and Avastin. More than a quarter of
patients given the four-drug combination suffered serious side
effects.
Sandra Horning, chief medical officer at Roche's Genentech unit,
said survival results are expected in the first quarter of 2018.
Bristol and AstraZeneca also expect to report data from key lung
cancer immunotherapy combination trials early next year.
EXTRA BENEFIT
Keytruda and Tecentriq, as well as Bristol's Opdivo and Astra's
Imfinzi, are designed to unleash the body's immune system to attack
cancer cells, and have been approved for a variety of cancers.
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Lung cancer is the biggest oncology market, with about 220,000
people in the United States due to be diagnosed this year and
155,000 seen dying from the disease often caused by smoking.
Some industry experts expect Merck to release initial survival
results as early as mid-2018. That could allow the company to expand
use of the drug more quickly to patients without PDL1 in their
tumors, and build a stronger case for European approval, said Tony
Butler, managing director at equity research firm Guggenheim
Securities.
For Tony Scherrer, co-portfolio manager at Smead Capital Management,
Merck is justified in taking a slower road. Smead owns shares of
Merck, but not Bristol, Roche or AstraZeneca.
"Others tried to speed up and didn't get past the FDA," he said.
"Merck is doing what Merck has done over a long history - get it
done right."
Shares of Merck trade at 13.6 times 2018 earnings estimates, a
discount to their five-year average of 15 times, according to
Thomson Reuters Datastream.
For 2023, Wall Street analysts forecast Keytruda sales of $11.6
billion, Opdivo sales of $7.7 billion and Tecentriq sales of $4.7
billion, according to Thomson Reuters data.
Drugmakers, doctors and patients have hoped that new, less toxic
immunotherapies could replace chemotherapy for many cancers, but
that works for only a minority of patients. So drugmakers began
combining the newer therapies with chemo, other older cancer drugs
and experimental treatments.
Hundreds of these trials are underway. Some have disappointed,
including a cocktail of Bristol’s Opdivo with another immunotherapy,
Yervoy, in lung cancers. Chemo alone tends to help only 30 percent
of advanced lung cancer patients.
Researchers say that chemo could act as a catalyst, creating
cellular debris that makes tumor cells more visible to the immune
system.
"Nobody knows what chemo backbones could be the most powerful, and
data will win out here," Daniel Chen, head of cancer immunotherapy
at Roche, told investors in October.
(Reporting By Deena Beasley; Editing by Michele Gershberg and Nick
Zieminski)
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