Finance News

Bristol swings for the fences and strikes out

Bristol swings for the fences and strikes out

Source EP Vantage
Company Bristol-Myers SquibbAstraZenecaMerck & CoOno PharmaceuticalRoche 
Tags Comment, Company Strategy, Trial Results, Phase III, Launches, Monoclonal Antibody, Immunology, Oncology, Free Content, Clinical Setback
Date August 05, 2016

Since the first anti-PD-1 agents secured approvals the first-line lung cancer indication has represented the biggest prize on offer. Today Bristol-Myers Squibb  paid the price for overreaching with  Opdivo  and trying to knock  Merck & Co ’s Keytruda , which had a slight time advantage, out of the park.

The failure of Bristol’s Checkmate-026 trial is a huge blow for the group, whose stock crashed 17% this morning – losing $20bn of market cap – while Merck  climbed 7%. Bristol now awaits results of a  Yervoy  combo study in this setting, after what looks like immuno-oncology’s biggest upset so far.

It is very easy to say in hindsight, but the problem with Checkmate-026, an open-label trial testing Opdivo in 535 first-line NSCLC patients, was its design. Bristol had moved aggressively, recruiting relatively low PD-L1 -expressing patients, and the first analysis concerned 5% or higher expressers, with the primary endpoint set at progression-free in preference to overall survival.

Perhaps it was just bad luck, or maybe Bristol had feared falling behind Keytruda . The Merck  drug’s first-line NSCLC trial,  Keynote-024, rendered a positive topline result in June, hitting both co-primary endpoints of PFS and OS – but in patients expressing PD-L1  at 50% or above.

Until today the battle was playing out exactly as the sellside had expected. Keytruda  was to be first to yield positive first-line NSCLC data in a narrow patient population, before  Opdivo  regained the upper hand with a benefit in lower  PD-L1  expressers.

Indeed, on its second-quarter conference call just a week ago, Bristol was still boasting how Checkmate-026 could allow it to broaden the patient population further: if >5% expressers yielded positive data the company could look at the effect in those with PD-L1  at >1%, representing 70% of first-line patients.

Moreover, a positive PFS benefit could be backed up by OS data, a secondary endpoint. “And we can still file without a positive OS result,” said Bristol’s chief scientific officer, Francis Cuss.

Now, with Bristol today saying Checkmate-026 was a bust, failing to show a PFS benefit in the 5% or greater PD-L1 -expressing population, the rulebook has been torn up.

Early worries

Still, there had been worries among some analysts about an initial reliance on PFS. On Bristol’s fourth-quarter call Citi’s Andrew Baum specifically raised the issue of so-called “pseudoprogression” – a known problem with some previous immuno-oncology trials that had obscured a potential benefit by making it seem like active patients were progressing as fast as the control group.

But realistically Bristol probably had little choice but to go with PFS. Waiting for an OS benefit to mature would have been unrealistic in a first-line study with the breadth of Checkpoint-026.

As it is Bristol might now try to cut the patient population down, looking at only the 50% or higher expressers, but since this had not been specified in the design of Checkmate-026 it would be exploratory, and would hold little water as regards regulatory filings.

Most likely Opdivo  will for now be restricted to second-line use, an approved indication, with first-line reserved for  Keytruda  in its biomarker subgroup.  Checkmate-227, a complex first-line NSCLC trial involving several combinations as well as Opdivo  monotherapy, is under way but does not read out until 2018.

Anti-PD-1/PD-L1 MAb approvals in major Western markets 
Approval  date  Region  Therapy  Indication  Notes 
Tecentriq  (Roche) 
18 May 2016  US  Monotherapy  2nd-line urothelial  carcinoma  IMvigor 210 study 
Opdivo  (Bristol-Myers  Squibb /Ono ) 
17 May 2016  US  Monotherapy  3rd-line classical Hodgkin lymphoma   CheckMate-205 & 039 studies 
11 May 2016  EU  Yervoy  combo  1st-line melanoma regardless of Braf status  Checkmate-067 & 069 studies 
6 Apr 2016  EU  Monotherapy  2nd-line renal cell carcinoma  Checkmate-025 study 
6 Apr 2016  EU  Monotherapy  2nd-line non-squamous NSCLC  Checkmate-057 study 
23 Jan 2016  US  Yervoy  combo  1st-line Braf-positive melanoma   Checkmate-067 study 
23 Jan 2016  US  Monotherapy  1st-line Braf-positive melanoma   Complete response letter on 27 Nov 2015 
24 Nov 2015  US  Monotherapy  2nd-line renal cell carcinoma  First anti-PD1 to show OS benefit in renal cancer 
24 Nov 2015  US  Monotherapy  1st-line Braf-W/T melanoma  Checkmate-066 study 
9 Oct 2015  US  Monotherapy  2nd-line non-squamous NSCLC  Checkmate-057 study 
1 Oct 2015  US  Yervoy  combo  1st-line Braf-W/T melanoma  1st I-O combo in cancer; Checkmate-069 
20 Jul 2015  EU  Monotherapy  2nd-line squamous NSCLC  – 
19 Jun 2015  EU  Monotherapy  1st & 2nd-line melanoma regardless of Braf status  Checkmate-066 & 037 studies 
4 Mar 2015  US  Monotherapy  2nd-line squamous NSCLC  Checkmate-017 study 
22 Dec 2014  US  Monotherapy  2nd-line melanoma  First US approval ; Checkmate-037 study 
Keytruda  (Merck  & Co) 
2 Aug 2016  EU  Monotherapy  2nd-line PD-L1 -positive NSCLC  Keynote-010 
18 Dec 2015  US  Monotherapy  1st-line melanoma regardless of Braf status  Keynote-006 study 
2 Oct 2015  US  Monotherapy  2nd-line PD-L1 -positive NSCLC  Keynote-001 study 
22 Jul 2015  EU  Monotherapy  1st & 2nd-line melanoma regardless of Braf status  Keynote-001, 002 & 006 studies 
4 Sep 2014  US  Monotherapy  2nd-line melanoma  First anti-PD-1 agent to get US approval ; Keynote-001 study 

As well as Merck  making strong gains,  AstraZeneca  and  Roche  shares spiked today, up 6% and 2% initially, though the UK group quickly faded (Therapy focus – First-line lung cancer is an Opdivo vs Keytruda showdown, June 10, 2016).

Until now EvaluatePharma’s consensus of sellside forecasts saw Bristol generating 60% of 2022  Opdivo  sales in NSCLC, across all lines of therapy. Evercore ISI’s Mark Schoenebaum put the size of the first-line NSCLC market at over $12bn, and neatly summed up the Checkmate-026 failure, calling it “possibly the biggest clinical surprise of my career”.

The consensus-based NPV of Opdivo  in all forecast uses amounted to a staggering $71bn, or 57% of Bristol’s market cap; little wonder that the selloff was so extreme today.

In terms of market cap gains and losses there have been other immuno-oncology rollercoaster moments, including Opdivo  snatching  Keytruda ’s early lead away from it, and Bristol reporting underwhelming and somewhat confusing biomarker data in a second-line NSCLC trial at last year’s Asco meeting; in hindsight perhaps this was the canary in the coalmine.

While much more work still needs to be done to elucidate the importance of various biomarkers, the Checkmate-026 disappointment has triggered a massive shift in sentiment.