UPDATED: Bristol-Myers dominates--and disappoints--at ASCO immuno-oncology debut

CHICAGO--Bristol-Myers Squibb ($BMY) and rival Merck ($MRK) started off the big annual scientific meeting of ASCO with a bang, rolling out a slate of new studies spotlighting the growing body of evidence that their new immuno-oncology drugs will play a key role fighting a range of cancers.

Designed to unleash an immune response directly against cancer, the two drug developers unveiled new data that helped underscore the promise of checkpoint inhibitors, a field with multibillion-dollar market potential, as well as some of the emerging limitations to the number of patients who stand to benefit. These new data will likely herald the near-term approval for one of the drugs for the most common type of lung cancer, while investigators also cheered evidence of their efficacy against advanced liver cancer as well as head and neck cancer.

But more than one top analyst was left disappointed by the Bristol-Myers' pitch, seeing plenty of weaknesses for major league competitors to exploit. With expectations for immuno-oncology running at a feverish high, any such doubts can cost a company like Bristol-Myers dearly. Its stock dropped 6.5% today.

The most advanced data came from a pivotal Phase III study of Bristol-Myers' Opdivo (nivolumab) which bested chemotherapy in non-squamous, non-small cell lung cancer--the most common form of lung cancer. Opdivo was approved for advanced squamous NSCLC back in the spring as Bristol-Myers seized an early lead over Merck in the all-important lung cancer market.

Previously treated patients in the Opdivo arm of the Checkmate-057 study demonstrated a 19.2% response rate, compared to 12.4% for docetaxel. Responses were considerably more durable for Opdivo--an average of 17.1 months vs. 5.6 months--while the median overall survival rate hit 12.2 months in the nivolumab group compared to 9.4 months in the docetaxel group.

Investigators also highlighted that a subgroup of patients identified with high levels of PD-L1 in their tumor were particularly responsive, with the median survival rate for nivolumab beating 17 months, compared to 9 months for those treated with docetaxel.

Bristol-Myers' Fouad Namouni

"This marks the end of the chemotherapy era in second-line treatment of lung cancer," Bristol-Myers' Fouad Namouni told Reuters.

Namouni added that Bristol-Myers will be taking its case for a broader approval of the drug to the FDA, where it's likely to be eagerly awaited. The agency was quick to hand out its first approval for lung cancer and shows no signs of slowing down now.

But the data weren't all in Opdivo's favor. Seamus Fernandez at Leerink wrote today that he was distinctly "disappointed" by the overall hazard ratio of 0.73 in the study, with benefits clearly skewing away from patients whose tumors expressed low levels of PD-L1. That kind of distinction could play in favor of Merck and Roche ($RHHBY), which is coming up close behind the two leaders in the field with a biomarker approach to IO. 

Evercore ISI's Mark Schoenebaum also notes that conversely patients with low levels of PD-L1 were far less likely to benefit from Bristol's drug. That "raises questions, including whether patients with non-squamous lung cancer in the 2nd line setting would (rather than simply just taking Opdivo) want to have their tumor tested for PDL1 expression before starting PD1 or PDL1 antibodies. In such a scenario, if a patient is willing to undergo a biopsy (which has some risk - small but real) the possibility arises that patients choose a diagnostic assay and antibody from a different company, such as MRK and Roche," Schoenebaum wrote in a note to investors.

A few weeks ago Roche outlined positive Phase II data for its checkpoint inhibitor MPDL3280A, which scored positive non-small cell lung cancer data specifically in patients with a high level of PD-L1 expression.

Bristol-Myers also touted some early-stage Phase I/II data from its dose-ranging trial evaluating Opdivo in previously treated patients with hepatocellular carcinoma, or advanced liver cancer. "Initial findings demonstrated that the estimated survival rate in evaluable patients (n = 47) was 62% at 12 months," according to the biotech.

Merck was first to grab the spotlight at ASCO early Friday when it announced a partnership with Amgen ($AMGN) that will pair the Big Biotech's T-Vec, a likely near-term winner at the FDA, with Keytruda (pembrolizumab) for metastatic squamous cell carcinoma of the head and neck. And later in the day it succeeded in keeping some of the attention on Keytruda with positive data on head and neck cancer.

Among evaluable patients in the early-stage study the overall response rate to Keytruda was 24.8%, a significant improvement over the 19.6% ORR reported last year at ASCO.

"Based on the results observed to date, we are advancing multiple registrational studies in head and neck cancer including randomized evaluations of overall survival and progression-free survival with Keytruda, as monotherapy and in combination with chemotherapy, compared to standard of care," said Dr. Roger Dansey, senior vice president and therapeutic area head, oncology late-stage development, Merck Research Laboratories.