Big Keytruda survival win sets Merck up to steal Bristol-Myers Squibb's kidney cancer share

Bristol-Myers Squibb investors have been dreading positive kidney cancer results from archrival Merck for months. And now that they’re here, they might do even more damage to Bristol-Myers’ market share than some industry watchers expected.

Results released late Monday in an abstract show that Merck’s immuno-oncology star Keytruda, in tandem with Pfizer’s Inlya, slashed the risk of death by 47%—nearly half—compared with Pfizer standby Sutent in previously untreated kidney cancer patients.

And while subgroup data won’t be available until the weekend, the pharma giant has already said that benefits were consistent across risk groups and levels of biomarker PD-L1.

In short, that survival number "is very impressive and better than the … threshold that we believe investors were expecting," Credit Suisse analyst Vamil Divan, M.D., wrote to clients.

It’s also higher than the 32% survival figure Bristol-Myers Squibb’s Opdivo-Yervoy immunotherapy combo posted in its own trial, Evercore ISI analyst Umer Raffat pointed in an investor note. And the way he sees it, the difference can’t be explained by differences in the trial populations.

"Is MRK data better? Yes, absolutely," he wrote. "Merck's data appears superior given" the better survival result "and an impact being seen across a broader population," Credit Suisse's Divan added, noting that the Opdivo-Yervoy pairing only significantly topped Sutent in intermediate and high-risk patients.

So what now? Merck has already confirmed that it’s filed the combo for approval. And if it can land an FDA green light, Divan expects first-line kidney cancer to become "another indication where Merck will likely start taking share from Bristol."

In addition to the survival numbers, price could eventually come out in Merck’s favor, with Inlyta generics—which Divan assumes will arrive in 2025—providing "a cost advantage" over the Opdivo-Yervoy duo.

And while there is another I-O regimen that could beat Keytruda to market, Divan doesn’t think it’s a match for Merck. Pfizer and Merck KGaA are waiting on an expedited FDA decision for their Bavencio-Inlyta pairing, but "we view Keytruda + Inlyta as likely to overtake Bavencio + Inlyta as well given greater physician comfort with Keytruda over Bavencio," Divan wrote.

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