Analysts applaud as Bristol-Myers preps a PhIII study for PD-1 cancer combo

The last 24 hours offered an important lesson over just how closely analysts and investors are tracking every movement on the immunotherapy front in cancer R&D.

To set the stage, let's recall that a few weeks ago executives at Bristol-Myers Squibb ($BMY) managed to upset several of the top analysts who cover the company when they proved reluctant to confirm a near-term timeline for a Phase III study combining Yervoy with the PD-1 immunotherapy star nivolumab for lung cancer. The idea of lingering in Phase II with the combo as powerhouse competitors at Merck ($MRK) and Roche ($RHHBY) pressed the pedal to the metal on their own clinical programs suggested that investigators at BMS saw signs of potential trouble.

The mere suggestion caused the stock to drop as analysts fretted. Confusion reigned.

But Bristol-Myers' Brian Daniels, the senior vice president of global development, set out to dispel the rumors and the doubts on Tuesday when he took to the podium at the Cowen healthcare conference in Boston and said that a Phase III study of the combo for lung cancer will begin before the end of this year.

Seamus Fernandez, who covers Bristol-Myers for Leerink, quoted Daniels as saying: "There are literally 12 different cohorts of patients, that is asking about nivo in combination with a variety of different therapies... From that wealth of data... we believe we're gaining insight to allow us to create the right sort of scientific hypothesis that would lead to a Phase III study of the combination of Yervoy and nivolumab starting by the end of 2014... we will have a testable scientific hypothesis and a Phase III trial started by the end of this year 2014, with Yervoy, and nivo in non-small cell lung cancer."

A spokesperson for Bristol-Myers Squibb confirmed that timeline to FierceBiotech, saying that no more details were available. But none were needed.

The company's stock surged more than 5%, and worried analysts changed frowns into smiles of approval.

"This is good news, in my opinion, and could mean that the Phase I combo data we will see at ASCO could be stronger than the street (and I) generally expect," noted ISI's Mark Schoenebaum. "I view this data as the single most important PD-1 related data point of 2014 (there will be many important pieces of data, but this perhaps is the single most important)."

Fernandez has already tapped BMS as the leader in the PD-1 field, with Merck charging ahead with a rolling application at the FDA and a slate of studies and collaborations now underway. (Roche also has a leading program, with investigators focused on PD-L1.) Some substantial early-stage work indicates that unleashing an immune attack on cancer cells through this mechanism has enormous potential. With bragging rights and an opportunity to be the first company to begin commercialization work in a field offering a possible megablockbuster bonanza in return, it's clear that all of these companies will spare no expense to make as much progress as fast as possible.

This is one development race that will play out under a microscope, with even the smallest advances and stumbles earning careful attention. -- John Carroll, editor-in-chief (email | Twitter)