Merck grabs another 'breakthrough' in PD-1 lung cancer race with Bristol-Myers

With the goal line for lung cancer in sight at the FDA as it races with an ambitious R&D team at Bristol-Myers Squibb ($BMY), Merck ($MRK) has grabbed bragging rights to the agency's breakthrough drug designation for the checkpoint inhibitor pembrolizumab (Keytruda) for that golden market opportunity--helping to ease the sting of falling Q3 pharma sales.

The pharma giant put out word that the agency has granted its BTD title for epidermal growth factor receptor (EGFR) mutation-negative, and anaplastic lymphoma kinase (ALK) rearrangement-negative non-small cell lung cancer "whose disease has progressed on or following platinum-based chemotherapy."

Backing up earlier immuno-oncology research on the topic, investigators reported at European Society for Medical Oncology meeting a few weeks ago that pembrolizumab's antitumor activity for NSCLC directly correlated to levels of PD-L1 in patients, a closely linked target for the disease. Better progression-free survival and overall survival times were recorded in that Phase Ib study, which Merck says was used for their BTD application with the feds.

It's hard to overestimate the importance of Keytruda for Merck. The pharma giant's huge R&D division has regained a considerable portion of its lost luster following a grim 5-year drought in the clinic based on its rapid progress with the cancer treatment. The drug was the first approved in the U.S. for melanoma, beating out Bristol-Myers Squibb--which grabbed the first global approval for a checkpoint inhibitor in Japan earlier this year. Bristol-Myers is determined to be the first to get an OK in lung cancer, which is considered one of the largest market opportunities for these drugs. Bristol-Myers has completed its European application for lung cancer and expects to wrap a rolling app at the FDA by the end of this year.

A breakthrough designation could help Merck shave some time off its regulatory timeline, particularly as regulators have made it clear that they plan to push through approvals as quickly as possible.

PD-1 and PD-L1 both play a significant role in cancer. By blocking those two IO targets investigators have found that the immune system can begin to recognize cancer cells and mount an attack that can make a significant difference in terms of survival expectations. And the leaders in the field--which includes Roche ($RHHBY) and AstraZeneca ($AZN)--are scrambling to stake out positions as early leaders.

Merck needs all the good news it can get on the R&D front. Long a laggard among the Big 10 drug developers, Merck reported that its Q3 pharma sales dropped 4% year-over-year as generics took a deeper bite into sales revenue. The prospect that big new products like Keytruda can point those numbers back north is the company's main defense now against unhappy investors.

- here's the release