Bristol Myers Squibb And The New Wave Of Cancer Drugs

May.20.13 | About: Bristol-Myers Squibb (BMY)

Even with the best cancer drugs, doctors are forced to switch from one therapy to the next as the tumors rapidly develop resistance.

A new wave of immunotherapy drugs, in the spotlight of the upcoming ASCO (American Society of Clinical Oncology) meeting, promises to produce longer-lasting remissions.

So far, only a fraction of patients have responded to the treatments, but the benefits have occasionally been dramatic. Some melanoma patients on Bristol's Yervoy, for example, survive several years after one course of treatment.

Bristol's Nivolumab

Bristol-Myers Squibb (NYSE:BMY) is the frontrunner in the race.

Bristol's nivolumab, at the center of interest, targets a protein called PD-1, or Programmed Death receptor. Nivolumab is in six final-stage trials in 3,300 patients with lung cancer, kidney tumors and melanoma.

In the advanced melanoma study, a combination of two drugs from Bristol-Myers Squibb shrank tumors significantly in about 41 percent of patients. In a few of the 52 patients, tumors disappeared completely.

One of the drugs in the combination was Yervoy, which has been approved for the treatment for melanoma since 2011. Yervoy disables an immune system protein called CTLA-4.

The other drug in the combination was nivolumab, formerly called BMS-936558, a new drug not approved yet. It disables a protein known as PD-1, which sits on the surface of T-cells. Tumors can produce a protein called PD-L1, which binds to PD-1 and the resulting entity makes the T-cells (fighters of the body's immune system) unable to see and act against the cancer cells.

The combination of the two drugs was more effective than each drug given alone. Typically, only about 11 percent of patients respond to Yervoy, and nivolumab produces a response rate of about 41 percent.

The FDA has granted Fast Track designation for nivolumab in three tumor types: non-small-cell lung cancer, renal cell carcinoma and advanced melanoma.

Immunotherapy

Scientists have been trying to understand for decades why the body's immune system doesn't see cancer cells as the enemy and attack them.

Recent discoveries reveal that tumors are adept at cloaking themselves by hijacking the body's own mechanism for preventing the system's T-cells from running amok against healthy tissue.

The new class of drugs lifts the cloaking device and allows the immune system to attack.

Researchers are growing increasingly enthusiastic about the potential of the body's own immune system to fight tumors.

"You're setting up a fair fight" with the disease, said Nils Lonberg, a senior vice president at Bristol-Myers, in an interview. "The immune system is just as adaptable as the cancer."

The key is the interaction between the PD-1 (programmed death) protein and PD-L1 (programmed death ligand) protein that allows cancer cells to escape and multiply.

By giving a patient the correct antibody protein to block either the PD-1 or PD-L1 from interacting, the immune system will destroy the cancer cells.

In recent years, cancer research has focused on treatments that targeted specific genetic processes that create uncontrolled cell growth. While this approach produced some successes, advanced tumors are often able to evade attack within a few months by producing mutations.

Competition

At least six other companies are testing immune therapy drugs in patients with advanced cancer.

Merck (NYSE:MRK) is in second-stage in a planned five stage testing of its immune therapy, lambrolizumab for melanoma. If successful, the 500-patient trial may be large enough to gain approval from U.S. regulators without completing the usual required Phase 3 trial, putting it in a virtual dead heat with Bristol's nivolumab.

Last November, data presented at a conference showed lambrolizumab shrinking tumors in 51 percent of patients with advanced skin tumors. Merck has also begun studies in cancers of the lung, head and neck, and breast.

Dr. Gary Gilliland, a Merck senior vice president for oncology said patient demand for the PD-1 drugs is so intense that the company had to step up the pace of opening trial sites. Some patients with advanced melanoma have skipped over approved treatments to jump right to Merck's experimental drug.

Merck's drug was recently given "breakthrough" designation by the FDA.

Both Bristol-Myers and Merck compounds have shown side effects, including the potential for lung inflammation in some cases.

Roche (OTCQX:RHHBY) targets PD-L1, which the company believes may be a safer approach. Early data from a small study showed that investigators could use the maximum dose safely, making this a strong candidate in mid-stage studies.

Roche's compound is known as MPDL3280A, developed by its Genentech subsidiary. Overall, tumors in 29, or 21%, of patients in the trial responded to the drug; tumors hadn't progressed in 26 of the patients, including some who had been on the treatment for more than 15 months.

Bristol's nivolumab, and Merck's MK-3475, are antibodies that bind to PD-1, while Roche's drug binds to PD-L1. It is not clear yet which approach is better.

In the future it may be possible to test tumors for the presence of PD-L1, and use the drugs mainly for those patients, where it is expected to work more effectively.

It is also not clear yet how many types of tumors the drugs will work for. All the companies are targeting melanoma, because there is evidence that it is sometimes controlled spontaneously by the immune system. The companies also have data for lung and kidney cancer. Roche's study showed some effect in colorectal and head and neck cancer as well.

Some immunotherapy agents hold particular promise in being paired with drugs that specifically target genetic mutations driving the tumors.

Since they are treating the immune system, and not the cancer, this sort of approach should work against all kinds of cancer.

Companies that don't have any PD-1 or PD-L1 drugs in their pipeline, like Pfizer (NYSE:PFE), are interested studying them in combination with their own targeted cancer drugs.

Investors summary

The financial stakes are high. The cancer drug Avastin, for instance, made by Roche, had $5.8 billion in sales last year for use against colon and other cancers. Bristol's nivolumab could generate an "Avastin-like sales number, maybe even better," if it is found to work in lung cancer, said Tony Butler, an analyst at Barclays.

Nivolumab 's success could strengthen Bristol's cancer portfolio. Its current leaders in cancer treatment are Erbitux with $162 million in sales for the first quarter 2013, up 9 percent from the same period last year, Sprycel with $287 million in sales, up 24 percent and Yervoy $229 million, up 49 percent.

The new drugs are generating a huge interest on Wall Street, which projects billions of dollars in annual sales. Bristol is generally considered to have a lead, but Merck and Roche are not far behind.

Analysts at Leerink Swann predict that the three companies' drugs combined could collectively generate $10 billion in peak annual sales. Leerink believes the "immuno-oncology" drug market could amount to a $20 billion category annually, putting it on a par with the cholesterol-lowering statin market at its height.

If the new generation of immune therapies lives up to its promise, "this is going to be a paradigm shift for treating cancer," said Merck senior vice president Gary Gilliland in an interview. "We are pretty good at shrinking tumors, but not good at getting rid of them. Immune therapy is a way to begin to approach that."

Some experts think that tumor shrinkage, a measure evaluating conventional chemotherapy drugs that poison cancer cells, may understate the effect of these new drugs.

The FDA is promising to provide a shortcut on new drugs, which means that cancer patients and investors may not have the usual long wait before some of these drugs are available. And that could spur a major shift in the development timelines being provided by many drug developers.

"A couple of years ago the big story was that immunotherapy can work," said Jedd Wolchok, director of immunotherapy at the Ludwig Center at Memorial Sloan-Kettering Cancer Center. "Now immunotherapy has entered the mainstream."

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.