Merck stock tumbled Monday after Summit Therapeutics' cancer drug outperformed blockbuster Keytruda in a study of lung cancer patients.
In a presentation at the World Conference on Lung Cancer, Summit said its drug, ivonescimab, reduced the risk of progression or death by 49% compared to Keytruda. Keytruda is the standard of care for patients with non-small cell lung cancer.
Summit Therapeutics noted ivonescimab is the first drug to achieve a clinically meaningful benefit over Keytruda in a randomized Phase 3 study of NSCLC patients. At the median, ivonescimab recipients lived for 11.14 months before their cancer worsened, compared to 5.82 months for Keytruda patients.
Merck stock toppled 2.1% to close at 115.41. Shares of Summit Therapeutics soared 56% to 19.14.
Merck Stock Dives On Competition
It's important to note that ivonescimab uses a different mechanism from Keytruda.
Ivonescimab targets a protein called PD-1, which tumors cells use to camouflage themselves from the immune system. Binding to this protein helps immune cells actually see and attack the cancer cells. The Summit drug also blocks a protein called VEGF to prevent the formation of new blood vessels. This cuts off the cancer's blood supply. Keytruda only uses the PD-1 pathway.
Eliav Barr, chief medical officer at Merck Research Laboratories, said blocking both PD-1 and VEGF has proven tricky in the past. While the data are impressive when it comes to lengthening progression-free survival, or PFS, it will be key to determine whether ivonescimab improves overall survival, or OS.
Some "combinations have shown really impressive PFS benefits over standards of care that didn't translate into OS benefit," Barr told Investor's Business Daily. "This is due to the toxicity of VEGF inhibition. We have an extensive program in this combination and found PFS benefit was observed and then toxicities caught up in the combo arm."
Notably, 20.8% of patients who received ivonescimab experienced serious treatment-related side effects vs. 16.1% of Keytruda patients. Among ivonescimab patients, 10.2% had serious side effects possibly related to VEGF inhibition, compared to 1% of Keytruda patients.
Barr also noted Summit Therapeutics compared its drug to Keytruda alone. Most patients with non-small cell lung cancer receive Keytruda plus chemotherapy.
Keytruda's Looming Patent Expiration
Leerink Partners analyst Daina Graybosch says Keytruda isn't in immediate trouble. Last year, Keytruda brought in just north of $25 billion in sales. Excluding the impact of exchange rates, sales grew 33%.
But the patents protecting Keytruda will begin expiring in 2028. The drug is a backbone in a number of cancer treatment regimens. Others are trying to unseat Keytruda in combination approaches.
"As for Merck, we believe any sell-off is likely an overreaction," Graybosch said in a report. "We see low threat to Keytruda near-term, though we do believe Merck faces medium-term threat from BioNTech and AstraZeneca's immuno-oncology-bispecific-based novel combinations."
Leerink has an outperform rating on Merck stock, but doesn't rate Summit Therapeutics shares.
Summit stock is extended after a break out from a cup base, according to MarketSurge. The biotech stock is poised to break above a February 2021 high. Merck shares have been trying to crawl up out of a two-month consolidation.
