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Incyte's Failure With Merck's Keytruda Has No Implications For OncoSec

Christiana Friedman profile picture
Christiana Friedman


  • Incyte and Merck's epacadostat/Keytruda combination Phase III trial in melanoma failed.
  • OncoSec and Merck are pursuing a combination of ImmunoPulse IL-12 with Keytruda in melanoma also, with initial data from a Phase II registrational trial due this year.
  • Incyte's failure has no implications for OncoSec because the mechanisms of action are different.

The failure of Incyte's (INCY) epacadostat/Keytruda Phase III trial last week has the oncology investment community asking if combination approaches with Merck's (MRK) Keytruda have a future. Keytruda is an immune checkpoint inhibitor, and combining it and other checkpoint inhibitors like it with other oncology candidates is a strategy being pursued by several companies. Does Incyte's failure have any implications for other company's combining their own pipeline drugs with Keytruda?

The answer would depend on how any given drug interacts with Keytruda to fight cancer. In Incyte's case, the mechanism of action is the important factor to consider here. The mechanism of action of epacadostat is (or rather was) to downregulate the production of enzyme IDO1. IDO1 degrades the amino acid tryptophan, an essential nutrient for T-cells that attack tumors. If there is not enough tryptophan to feed the invading T-cells, they will starve, and the immune attack on the tumor will slow or stop. Therefore, the theory was that inhibiting IDO1 will promote the T-cell attack against melanoma.

How would this have strengthened the Keytruda attack?

Anti PD-1 checkpoint therapies like Keytruda depend on T-cells to prime the immune system. The PD-1 checkpoint deactivates the T-cell attack, and blocking it promotes the attack. Without T-cells attacking to begin with, Keytruda has little to no effect. The theory for this combination then was a good one and had some solid evidence to support it in early-stage trials. If anti IDO1 therapy can increase the amount of T-cells attacking a tumor by stopping the starvation of T-cells and making the tumor environment more healthy for them, the patient response to Keytruda should increase.

Unfortunately, despite positive results last August, Phase III data was uninspiring. Progression-free survival statistics were not improved with the combination of epacadostat and Keytruda over Keytruda alone, and Incyte scrapped the

This article was written by

Christiana Friedman profile picture
Being involved in the medical industry and patient care, I developed an interest in new therapies for diseases I come into contact with in my work. Fundraising for hospitals is part of my past, now semiretired from the medical field but staying in through retail investing.

Analyst’s Disclosure: I am/we are long ONCS. 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.

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Comments (58)

tamnguyenga profile picture
How about now asking for 45,000,000 shares from 16,000,000 would that change your mind!!!?
ORMUS profile picture
I wish all the selling robots and shorts today had read your article ... but i guess it is too Utopian for the biotech world.
How can we have some competition from Dynavax this weekend when they will present their results on Melanoma tomorrow and H&N Cancer today ??? Are you sure with that ?

For info preliminary results from SD-101 + Keytruda on anti PD-1 refractory patient with melanoma had the following results (N=12) CR = 0% / PR = 17% / ORR = 17% / SD = 25%

Not realy a threat to Oncosec for the moment....
It was a little competition. Oncosec needs more numbers. N=5 is half way there in TNBC. I’m sure the melanoma data will be higher in numbers for the next presentation.
Here comes Idera with its Data in Mice. Another intratumoral injection.
The pilot study in TNBC should be stopped as soon as Oncosec annouce initiation of the combo phase II trial. There is no need to pursue this study.
Dr Munster is ready to launch the study and enrol her first patient today.....she's just waiting for Oncosec to finalize the agreement with the partner
tamnguyenga profile picture
Good Morning Tam,

As promised, here is a link to the PR describing the AACR Research Reception PR and a link to the presentation itself.

Press Release: http://bit.ly/2qzuxZE

Presentation: http://bit.ly/2viM4dm

As always, thank you for being a loyal shareholder.


A little competition from Dynavax this weekend.
When one look at page 18 of Dynavax presentation at AACR I don't see any competition from them at all....
Anti PD-1 refractory with 0% score on all front.... hardly competitive... All 13 patients have their disease progress.
Oncosec and its 40% CR will bring the only therapy to the market. There is absolutely no competition at this point !!! And we will double down with TNBC....
Sounds good. Sellers have made the stock cheaper for us. Appreciate your input.
Oncosec update soon.
Merck did not fail. The control drug that performed better than the Incyte combo was Keytruda. Simply stated Keytruda outperformed Incyte drug with Keytruda. Again the Incyte combo was measured against stand alone Keytruda!!
No benefit in Phase III that was seen in Phase II. Maybe they were feeding their patients too much turkey, which increased the tryptophan metabolites that down regulate tregs. Hehe 😜
Thank you for the great Article:

I was long (more than 4 years and adding at various levels to bring down my average cost).

I got out yesterday to book some (big) losses to add in another position and looking for the earliest opportunity to get back in (30 days waiting).

In Biotech you never know when the announcement (good or bad) comes out. The best news I can look for is an acquisition news about this company.

Good luck to all.
Isn’t a phase iii trial still required....? They can go to market on phase iib registration but will still need a phase iii even while it’s out in the market... right?
Hot biotech stocks profile picture
No. If FDA thinks the ongoing P2 is good enough, no need for P3 study.
thanks for confirming!
rx7no1 profile picture
Great article. I understand ONCS much better now. Thank you.
Nice - we should be receiving updates on the trial this weekend. Thanks and GL
Yep. Oral poster presentation.
Here is the info that is important. There will be a news release. “Further details on the poster presentation will be provided in upcoming Company communications.”
Let me understand this. As a registrational trial, no PhIII will be required, if data is good. Nevertheless, you say: "OncoSec will likely refinance on a high point, my guess is 20-50% higher than current prices, depending on how positive initial results actually are." Maybe I am totally out of it here, but if data is good, that is, ORR is +30%, the share price will be multiples higher. Look at the market cap, and look at potential market.
Her comment here is inaccurate. A phase III Confirmatory will still be required but if phase II results are good they can apply for early market approval and go to market. Phase III confirmatory will then be run, as they start marketing drug.
tamnguyenga profile picture
Nate, Yes but the market expect partnership and Oncosec did not deliver that yesterday. They did not address "Incyte epacadostat flop" or separate Oncosec from Incyte plus not any closer to partnership.

Their communication team and IR are suck!!!
Silly expectation. Listen to the webcast. They will be announcing their TNBC partner soon. Pisces trial progressing well 21/23 sites up and enrolling. Encouraging efficacy signals, first patient is a CR.
Excellent analysis and thanks to author for the update. I have done my DD on ONCS and hold a significant amount of shares because their technology works and Merck will buy them at some point... Given the authors high amount of knowledge and the fact she owns the stock should provide investors enough interest to add ONCS to their watchlist !!!
silvergun profile picture
Yes ONCS is a winner. Im holding a large position from the $1 range.
Why do you think 🤔 most investors are overlooking its large potential ?
Oncosec has a couple of Abstracts at AACR 2018 this weekend
Abstract number CT022.
rx7no1 profile picture
In digging through the AACR site I'm having trouble locating that abstract. Could you copy and past here.
Download the phone app. Much easier. Then type in oncosec in the search engine. You can type oncosec in the search engine
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