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 Executive Summary

 

New cancer immunotherapies are doing well in lung cancer, with Merck's Keytruda picking up share in the first-line setting and Roche's Tecentriq in second-line. Bristol-Myers Squibb is banking on combo therapy to restore its momentum.

 

It’s been a turbulent few months for immuno-oncology and there’s been a lot of speculation about what that will mean in terms of sales and market share. Coming out of the fourth quarter earnings calls, there have been early signs of change and a lot of posturing about the impact of combination approvals expected later this year.

 

Taking stock, Bristol-Myers Squibb Co.’s Opdivo (nivolumab) is holding on, but Merck & Co. Inc.'s monotherapy approval for its PD-1 inhibitor Keytruda (pembrolizumab) in first-line non-small cell lung cancer last October and Roche's approval for its PD-L1 inhibitor Tecentriq (atezolizumab) in the second-line setting have eaten into the momentum once enjoyed by Opdivo, the first PD-1 inhibitor to reach market in the US (see chart). (Also see "It’s Here: Merck’s Keytruda Cleared For First-Line Lung Cancer" - Scrip, 25 Oct, 2016.)

 

Bristol has lost some of its momentum in cancer immunotherapy, between Opdivo’s failure in the CheckMate 026 study in first-line NSCLC and the company’s recent decision not to seek accelerated approval in that setting for its proprietary combo regimen of Opdivo with its CTLA-4 inhibitor Yervoy (ipilimumab). (Also see "'Total Disaster' In First-Line Lung Cancer For BMS's Opdivo" - Scrip, 10 Oct, 2016.) Opdivo brought in $3.77bn for all of 2016 and $1.3bn in the fourth quarter, but US sales of $715m were flat from the third to the fourth quarters. (Also see "Under Fire, Bristol Plans To Pick Up The IO Pieces" - Scrip, 26 Jan, 2017.)

 

 

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Keytruda earned $1.4bn in global sales in 2016, with fourth quarter sales of $483m, including $311m in the US. (Also see "Merck's Keytruda Reaches Blockbuster Status, But Still Lags In Lung Cancer" - Scrip, 3 Feb, 2017.) During Merck's Feb. 2 call, Executive VP-Global Human Health Adam Schechter pointed out that of its US sales for the quarter, 40% occurred in initial melanoma indication, 30% in lung, 15% in head-and-neck cancer and 15% in other cancers. Before the first-line monotherapy approval, Merck estimated that 25% of Keytruda's US sales derived from lung cancer.

 

Initial reports suggest adoption of immuno-oncology drugs in first- and second-line NSCLC is proceeding in line with FDA labeling, and that Merck is seeing strong uptake among first-line patients that meet the label: those with 50% or greater expression of PD-L1.

 

Looking at monthly sales trends from Symphony Health, Leerink analyst Seamus Fernandez noted that both Keytruda and Tecentriq saw good month-to-month growth in December (14% and 13%, respectively), whereas Opdivo fell 2% from November to December 2016. “Despite what might be overly optimistic estimates of Keytruda’s early uptake in [first-line NSCLC], the acceleration into December bodes well for Merck’s Keytruda and our expectation is that [it] will dominate this setting at least during the next two to three years,” he concluded.

 

Roche Chief Operating Officer Daniel O'Day told its Feb. 1 earnings call Tecentriq is off to a good start in the second-line lung cancer indication launched in October. (Also see "Genentech’s Tecentriq Stakes New Claim With FDA Lung Cancer Approval" - Scrip, 19 Oct, 2016.) "It's too early yet to give you market shares in that area because the data is just too fresh," he added. "But we're definitely off to a good start with a comprehensive study program that's allowing us to be competitive in that second-line setting." According to the Swiss pharma, Tecentriq held a 60% market share and reported 2016 sales of CF157m (about $158m).

 

Bristol Notes Opdivo's Slowdown In Second-Line Lung


Bristol Notes Opdivo's Slowdown In Second-During Bristol’s Jan. 26 earnings call, Chief Commercial Officer Murdo Gordon maintained that Bristol had been able to defend its position in second-line NSCLC "as expected." "We are exiting 2016 at around a 40% share of overall second-line lung," he said. "And we are seeing the IO class in general increase in its penetration of second-line lung. Mainly, most of our erosion in second-line has been attributable to the launch of Tecentriq in the fourth quarter."

 

Bristol is bracing for further impact from the potential early entry of a Keytruda/chemo combo. “In the US, we expect Opdivo will be roughly flat with the potential to show growth, and we will focus on defending our second-line position and driving adoption in other indications." The company highlighted that it has regained share in renal cell carcinoma and recently launched in head-and-neck cancer; it will also focus on increasing use in melanoma and just cleared FDA for bladder cancer. (Also see "Pressure On Tecentriq: Bladder Cancer Heats Up With Opdivo Approval, Keytruda Filing" - Scrip, 3 Feb, 2017.)

 

Combos Coming


There will be further impact on the second-line setting based on greater first-line use of immunotherapies – either patients receiving Keytruda monotherapy or one of many coming combinations.

 

All of the immuno-oncology contenders are rushing forward with comprehensive combination programs. Merck is out front with the chemo combo pending at FDA with a May 10 user fee deadline. And Bristol’s announcement that it won’t be pursuing accelerated approval for Opdivo plus its CTLA-4 inhibitor Yervoy has left a window for AstraZeneca PLC, which expects data for its anti-PD-L1 durvalumab plus its CTLA-4 inhibitor tremelimumab from the MYSTIC trial later this year. (Also see "Bristol, AstraZeneca Changes To IO Strategy Could Ultimately Be Regulatory Gain" - Pink Sheet, 20 Jan, 2017.)

 

Following in Merck’s footsteps, Roche has prioritized chemo combinations. O'Day said his company has "a very comprehensive program across a very comprehensive set of chemotherapy backbones" for lung cancer combination therapy. But Bristol Chief Scientific Officer Francis Cuss maintained that it has “the broadest first-line lung program in the industry," with IO/IO and IO/chemo combinations. “So, while the competitive landscape continues to evolve, we believe our combinations will have a role to play in first-line lung."

 

All of the immuno-oncology contenders are rushing forward with comprehensive combination programs. Merck is out front with the chemo combo pending at FDA with a May 10 user fee deadline. And Bristol’s announcement that it won’t be pursuing accelerated approval for Opdivo plus its CTLA-4 inhibitor Yervoy has left a window for AstraZeneca PLC, which expects data for its anti-PD-L1 durvalumab plus its CTLA-4 inhibitor tremelimumab from the MYSTIC trial later this year. (Also see "Bristol, AstraZeneca Changes To IO Strategy Could Ultimately Be Regulatory Gain" - Pink Sheet, 20 Jan, 2017.)

 

"My expectation is that with time we will see that treatment regimens are more and more personalized," Merck’s Perlmutter said.

 

Merck execs asserted during their call that the first-line market ultimately will be fragmented. "My expectation is that with time we will see that treatment regimens are more and more personalized," Roger Perlmutter, president of Merck Research Laboratories said. "I do not expect that one size will fit all here and that every cancer patient will receive the same combination, whether it's chemotherapy or immunologic manipulation. My feeling is, though, that Keytruda will prove to be foundational in these settings because of its very broad impact in a wide variety of different tumor types at different stages of disease, as we've shown."

 


Adoption Trends Bode Well For Increasing Keytruda Usage


Merck also expects to gain ground in the second-line NSCLC space, thanks to an October label update that expands its patient base from those with 50% expression of PD-L1 to those with as little as 1% expression. The firm has seen sequential increases in Keytruda sales each month since that approval and the approval in first-line NSCLC. According to Symphony Health data, US sales of Keytruda rose 14% from $78m in October to $89m in November and then another 14% to $101m in December.

 

BMO Capital Markets conducted a survey of 31 US oncologists who were early adopters of IO, released Jan. 25, showing that immuno-oncology drugs are penetrating the NSCLC space for eligible patients, about 85% of the market, with utilization consistent with FDA labeling. This includes rapid uptake of Keytruda in the first-line setting (with roughly 20% market share) and of Tecentriq in second-line (about 10%), BMO analyst Alex Arfaei said.

 

Arfaei noted that this showed rapid uptake of Keytruda in the first-line setting, and that Keytruda was achieving penetration in the first-line setting “at a much faster rate” than in the second-line market. “Keytruda’s average reported market share in 1L NSCLC is about 20%, consistent with the size of the 50%+ PD-L1 segment,” just three months after approval, indicating rapid uptake among lung cancer specialists.

 

That trend "bodes well for broader adoption of Merck's Keytruda in first-line following its probable label expansion [for combination use] in May 2017," he said. Lung cancer is the dominant contributor in BMO’s forecast for Keytruda out through 2026 (roughly 60%-70%); Arfaei projects sales totaling $3.9bn for Keytruda in 2017, about 2% below consensus estimates.

 

The physician survey also indicated strong immuno-oncology adoption (75%-80%) in second-line NSCLC, driven by both Keytruda and Tecentriq, the analyst noted, and physicians are reporting increased PD-L1 screening, in line with what Merck reported on its Feb. 2 earnings call.

 

During that call, Merck said it expects relatively quick uptake for Keytruda/chemo in the first-line setting following FDA approval. Initial adoption will likely occur in healthier patients, Schechter predicted. Right now, first-line usage is limited to patients with at least 50% expression of PD-L1, but adding the combination regimen should broaden usage to non-squamous patients, including those negative for PD-L1 expression, he said.

 

Expect initial Keytruda/chemo combo use to be in relatively healthy patients, before expanding, Merck’s Schechter says.

 

"From what we can tell, physicians will be much more apt to use the combination in patients that they deem to be relatively healthy," Schechter said. "They are going to evaluate it patient-by-patient and see where they believe that the combination of the two would outweigh potential side effects and so forth. So, I think, initially, it will be used in patients that are relatively healthy and those where they would be thinking about using Alimta anyway."

 

"After that, we believe that it will go into patients that are relatively healthy where they are not necessarily thinking about Alimta, but they might start to use Alimta in combination for Keytruda to treat those patients and get better results," he added. "And then, lastly, over time we think that even in patients that are less healthy, [oncologists] will probably, after having a lot of exposure to the combination, begin to use it in those patients as well."

 

Merck is also continuing with the confirmatory trial for first-line monotherapy use, KEYNOTE-042, testing Keytruda in patients with PD-L1 levels as low as 1% – despite Opdivo’s failure in CheckMate 026 at a 5% threshold. In response to questioning, the company noted it was keen to see if Keytruda’s benefit applied beyond patients with 50% or higher PD-L1 expression.

 

Beyond lung cancer, Merck is seeking to move Keytruda into a number of additional cancer settings, with Perlmutter noting the company is supporting more than 430 studies investigating the drug. Upcoming data highlights for Keytruda include second-line MSI-high colorectal cancer, expected in May; melanoma adjuvant use, expected in August; and a second study of Keytruda plus chemo in first-line NSCLC, expected in September.Following in Merck’s footsteps, Roche has prioritized chemo combinations. O'Day said his company has "a very comprehensive program across a very comprehensive set of chemotherapy backbones" for lung cancer combination therapy. But Bristol Chief Scientific Officer Francis Cuss maintained that it has “the broadest first-line lung program in the industry," with IO/IO and IO/chemo combinations. “So, while the competitive landscape continues to evol"My expectation is that with time we will see that treatment regimens are more and more personalized," Merck’s Perlmutter said.e, we believe our combinations will have a role to play in first-line lung."

 

"My expectation is that with time we will see that treatment regimens are more and more personalized," Merck’s Perlmutter said.

 

Merck execs asserted during their call that the first-line market ultimately will be fragmented. "My expectation is that with time we will see that treatment regimens are more and more personalized," Roger Perlmutter, president of Merck Research Laboratories said. "I do not expect that one size will fit all here and that every cancer patient will receive the same combination, whether it's chemotherapy or immunologic manipulation. My feeling is, though, that Keytruda will prove to be foundational in these settings because of its very broad impact in a wide variety of different tumor types at different stages of disease, as we've shown."

 

Adoption Trends Bode Well For Increasing Keytruda Usage


Merck also expects to gain ground in the second-line NSCLC space, thanks to an October label update that expands its patient base from those with 50% expression of PD-L1 to those with as little as 1% expression. The firm has seen sequential increases in Keytruda sales each month since that approval and the approval in first-line NSCLC. According to Symphony Health data, US sales of Keytruda rose 14% from $78m in October to $89m in November and then another 14% to $101m in December.

 

BMO Capital Markets conducted a survey of 31 US oncologists who were early adopters of IO, released Jan. 25, showing that immuno-oncology drugs are penetrating the NSCLC space for eligible patients, about 85% of the market, with utilization consistent with FDA labeling. This includes rapid uptake of Keytruda in the first-line setting (with roughly 20% market share) and of Tecentriq in second-line (about 10%), BMO analyst Alex Arfaei said.

 

Arfaei noted that this showed rapid uptake of Keytruda in the first-line setting, and that Keytruda was achieving penetration in the first-line setting “at a much faster rate” than in the second-line market. “Keytruda’s average reported market share in 1L NSCLC is about 20%, consistent with the size of the 50%+ PD-L1 segment,” just three months after approval, indicating rapid uptake among lung cancer specialists.

 

That trend "bodes well for broader adoption of Merck's Keytruda in first-line following its probable label expansion [for combination use] in May 2017," he said. Lung cancer is the dominant contributor in BMO’s forecast for Keytruda out through 2026 (roughly 60%-70%); Arfaei projects sales totaling $3.9bn for Keytruda in 2017, about 2% below consensus estimates.

 

The physician survey also indicated strong immuno-oncology adoption (75%-80%) in second-line NSCLC, driven by both Keytruda and Tecentriq, the analyst noted, and physicians are reporting increased PD-L1 screening, in line with what Merck reported on its Feb. 2 earnings call.

 

During that call, Merck said it expects relatively quick uptake for Keytruda/chemo in the first-line setting following FDA approval. Initial adoption will likely occur in healthier patients, Schechter predicted. Right now, first-line usage is limited to patients with at least 50% expression of PD-L1, but adding the combination regimen should broaden usage to non-squamous patients, including those negative for PD-L1 expression, he said.

 

Expect initial Keytruda/chemo combo use to be in relatively healthy patients, before expanding, Merck’s Schechter says.

 

"From what we can tell, physicians will be much more apt to use the combination in patients that they deem to be relatively healthy," Schechter said. "They are going to evaluate it patient-by-patient and see where they believe that the combination of the two would outweigh potential side effects and so forth. So, I think, initially, it will be used in patients that are relatively healthy and those where they would be thinking about using Alimta anyway."

 

"After that, we believe that it will go into patients that are relatively healthy where they are not necessarily thinking about Alimta, but they might start to use Alimta in combination for Keytruda to treat those patients and get better results," he added. "And then, lastly, over time we think that even in patients that are less healthy, [oncologists] will probably, after having a lot of exposure to the combination, begin to use it in those patients as well."

 

Merck is also continuing with the confirmatory trial for first-line monotherapy use, KEYNOTE-042, testing Keytruda in patients with PD-L1 levels as low as 1% – despite Opdivo’s failure in CheckMate 026 at a 5% threshold. In response to questioning, the company noted it was keen to see if Keytruda’s benefit applied beyond patients with 50% or higher PD-L1 expression.

 

Beyond lung cancer, Merck is seeking to move Keytruda into a number of additional cancer settings, with Perlmutter noting the company is supporting more than 430 studies investigating the drug. Upcoming data highlights for Keytruda include second-line MSI-high colorectal cancer, expected in May; melanoma adjuvant use, expected in August; and a second study of Keytruda plus chemo in first-line NSCLC, expected in September.

 

[Editor’s note: For more analysis of the evolving PD-1/L1 inhibitor market, see Biomedtracker’s report on “The Emergence of PD-1 Immunotherapies: An Analysis Between Keytruda and Opdivo in NSCLC.”]

 

 

 

 

 

 

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