Bristol-Myers takes a big step in its PD-1 lung cancer race with Merck

The FDA has accepted Bristol-Myers Squibb's ($BMY) application to get its star oncology treatment approved for lung cancer, setting up a speedy approval and putting the company first in line among drug developers at work in a blockbuster field.

With the acceptance, the agency has promised to hand down a final decision on Bristol-Myers' Opdivo by June 22, likely meaning the company will become the first maker of a so-called checkpoint inhibitor approved for lung cancer, beating out close rival Merck ($MRK). Bristol-Myers' treatment is designed to galvanize an immune system attack on tumors by blocking a pathway called PD-1, which, left unchecked, allows cancer cells to pass undetected by the body's natural defenses.

Like Merck's similar Keytruda, Opdivo won FDA approval last year as a treatment for melanoma, but lung cancer is widely considered to be the most promising--and most lucrative--application for PD-1 inhibitors. To that end, Merck is doing all it can to speed Keytruda along in the space, in January revealing that the drug was ahead of schedule and announcing plans to complete an FDA application by mid-2015. And thanks to the drug's "breakthrough" status at the FDA, it could pick up a lung cancer approval as soon as year's end, analysts figure.

But Bristol-Myers remains the prohibitive first mover among companies with checkpoint inhibitors for lung cancer. Opdivo's particular promise in non-small cell lung cancer (NSCLC) has led analysts to pencil it in as the most commercially promising among therapies that block PD-1 and the related PD-L1. Analysts figure Opdivo will bring in peak sales of around $5 billion, and Leerink's Seamus Fernandez believes the treatment's potential in lung cancer will take it as high as $7.3 billion by 2020.

Michael Giordano

"As a company that prides itself in helping patients prevail over deadly diseases, we are proud of this achievement and look forward to making Opdivo available to the lung cancer community," Michael Giordano, Bristol-Myers' head of oncology, said in a statement.

In a Phase III study pitting Opdivo against the standard cancer-killer docetaxel, Bristol-Myers' drug demonstrated such superior overall survival compared with the control arm that it hit its primary endpoint ahead of schedule, leading the trial's data monitoring committee recommend the study be terminated early. The company's FDA application is based on an earlier Phase II study in which Opdivo significantly increased rates of survival among patients with NSCLC.

Behind Bristol-Myers and Merck, Roche ($RHHBY), AstraZeneca ($AZN), and partners Pfizer ($PFE) and Merck KGaA are bringing up checkpoint blockers that promise to change the standard of care for many cancers, a new class of therapies expected to bring in about $35 billion a year.

- read the statement

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