As the new year turns, investors, physicians and patients alike will be waiting eagerly for Bristol-Myers Squibb (BMY) to report results from the latest trial of drug candidate nivolumab.
The trial, studying patients with a virulent disease called squamous non-small-cell lung cancer, is just a phase two trial, and it normally requires three rounds before a company will file for approval. But previous results were so strong, and the other treatments for this disease so lacking, that it's widely hoped that Bristol will file on the strength of that data, bringing nivolumab on the market as soon as late 2014.
For patients, that means new hope. For Bristol and its investors, that means money. Current Wall Street consensus expects the drug's annual sales to hit $4.7 billion by 2020.
Incoming Drug Class
It probably won't be alone. Nivolumab is one of a new class of medicines called PD-1 inhibitors, or anti-PD-1s. Fellow big pharmas Merck (MRK), Roche (RHHBY) and GlaxoSmithKline (GSK), along with small biotech CureTech, all have their own promising candidates in testing. These drugs are about the most exciting thing happening in cancer right now, say analysts.
"It's one of the few areas where we're going to see a new class of drugs, with potentially new revenue streams," Les Funtleyder, author of Healthcare Investing, told IBD. "That's the excitement.
Anti-PD-1s belong to a larger class of biologics called monoclonal antibodies, which work by manipulating the patient's immune system. Giving the immune system a general boost doesn't always help fight cancer, since the body can have trouble distinguishing between healthy cells and cancerous ones. One pathway that some cancers use to evade recognition is a protein called programmed cell death 1, hence PD-1. Research has shown that PD-1 expresses a ligand called PD-L1 that acts as a regulator on the white blood cells that fight disease, so a drug that inhibits it should unleash the blood cells' full force.
Not all cancer cells express PD-L1, but some of them are among the most common and virulent types: around 40% to 50% of melanoma, colon and non-small-cell lung cancers, as well as about 20% of kidney cancers. Not surprisingly, those cancers have been the focus of clinical testing.
High Response Rates
Bristol has been running some 25 clinical trials with nivolumab, but the main focus of attention has been on melanoma, lung and kidney cancer. The study that got people so excited about its potential in squamous lung cancer was its phase one trial of refractory patients reported last year. The overall response rate (i.e. tumor shrinkage) was 43% to 50%. By comparison, the response rate for the current standard drug, Roche's Tarceva, ranges between 4% and 17%.
Lung data are just starting to come out on Merck's candidate MK-3475, but the data on other cancers, especially melanoma, have been competitive with nivolumab so far. Last month Merck reported that the 12-month survival rate for melanoma patients in a phase one study was 81%, similar to the 82% rate achieved by nivolumab combined with Yervoy, an existing Bristol drug for melanoma.
Overall survival is "the gold standard the FDA looks for" when evaluating cancer drugs, said Morningstar analyst Damien Conover. For obvious reasons, though, it takes the longest to gather. While Merck's data were interesting, "survival curves will mature as we go out further," ISI Group analyst Mark Schoenebaum said in a Nov. 18 email.
Merck's 'Breakthrough' Drug
Unlike nivolumab, MRK-3475 has been granted "breakthrough therapy" designation by the FDA, under a new policy designed to accelerate approval of drugs that represent a significant improvement on existing therapies. Nonetheless, its clinical program is far enough behind Bristol's that the Street doesn't expect a launch until 2015. They estimate annual sales will reach $2.3 billion by 2020 .
In the meantime observers are waiting on a passel of phase two data on MK-3475 expected next year, especially at the annual American Society of Clinical Oncology meeting in June. That could move the drug's estimates and Merck's stock.