Merck Cements Lead in Lung Cancer With Bristol-Myers Fizzling

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  • Bristol-Myers drops 8.5 percent, most in more than a year
  • ‘This debate seems to be over,’ one analyst says after results

Merck & Co. is cementing its lead in the race to dominate the market for a new generation of lung cancer drugs, fending off rival Bristol-Myers Squibb Co. after new data that could reshape treatment of the disease, by far the deadliest form of cancer in the U.S.

Both companies released highly anticipated studies on Monday, testing their products in patients who have been newly diagnosed. Merck’s drug, Keytruda, showed “practice-changing” results when used with chemotherapy. While Bristol-Myers’s drug combination also met its goal for some patients, the company still hasn’t shown that the therapy extends patients’ lives -- the gold standard for doctors who will pick between the treatments.

“This debate seems to be over,” said BMO Capital Markets analyst Alex Arfaei, calling the Merck results “remarkable, and unprecedented” and saying that Keytruda is likely to become the standard of care.

Bristol-Myers shares fell as much as 8.5 percent, their biggest intraday drop in more than a year. They were down 8.3 percent to $53.77 at 12 p.m., after already slumping 15 percent over the past two months. Merck was up 2.6 percent to $58.66.

Bristol-Myers needed a home run to close the gap with Merck, which won approval for Keytruda in lung cancer last May based on an early trial. This latest competitive setback will lead to questions about how the company proceeds and whether other drugs it has in development can be added to make the existing treatments more effective.

“It’s definitely narrowed their base of patients, and they’ll hope their combination therapies work out,” said Jeff Jonas, a portfolio manager at Gabelli & Co. who holds Bristol-Myers shares.

Merck, meanwhile, looks to have a megablockbuster on its hands. Sam Fazeli, an analyst with Bloomberg Intelligence, called the “stunning data” enough to justify estimated 2022 sales of the drug of $11.2 billion. He predicts a third of that amount will come from lung cancer, which each year kills more than 150,000 people in the U.S., according to the National Cancer Institute.

Merck’s trial, called KeyNote-189, gave newly diagnosed lung cancer patients Keytruda plus other standard-of-care drugs. Patients on Keytruda lived significantly longer than those on just the other drugs.

Barclays analyst Geoff Meacham called the Merck data “a commercial home run” and well above expectations.

Bristol-Myers Trial

In Bristol-Myers’ 299-patient trial, patients with advanced lung cancer got a combination of the company’s drugs Yervoy and Opdivo. While they were 42 percent less likely to have their cancer get worse than patients who only got chemotherapy, the company didn’t present data on whether or not they lived longer. Bristol-Myers had said in February that the trial succeeded but didn’t provide specifics.

Bristol-Myers had made a change midway through the trial, a move that prompted some skeptics to question whether the drugmaker was altering the test to try and create a better result. Instead of a measure Bristol-Myers had used in past trials, it decided to target patients whose tumors have high levels of mutations, known as tumor mutation burden, or TMB.

That wasn’t enough to leapfrog Merck, said Roy Herbst, head of oncology at Yale Cancer Center in New Haven, Connecticut.

“I don’t anticipate there will be any immediate impact on prescribing use or doctors’ behavior,” Herbst said. “All this study does is tell you that TMB is clearly one marker of many that now needs to be considered as we figure out how to use immunotherapy for lung cancer and tumors.”

— With assistance by Tatiana Darie, and Cristin Flanagan

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