CHICAGO (TheStreet) -- It's Monday, so we get to see how investors react to a full weekend's worth of cancer drug data presentations at the American Society of Clinical Oncology (ASCO) annual meeting. Here's a smattering of sell-side commentary published this morning on the most popular topic at the ASCO meeting -- the new class of cancer immunotherapies known as checkpoint inhibitors under development by Bristol-Myers Squibb (BMY - Get Report), Merck (MRK - Get Report), Roche (RHHBY) and AstraZeneca (AZN - Get Report), among others:
Early IO (immuno-oncology) data in additional cancers (head & neck, ovarian, and bladder) presented at ASCO over the weekend appear promising and suggest the market potential for IO agents should grow. Most investors model just melanoma and lung and renal cancers for IO agents (PD-1 and PD-L1), but now they will likely add billions of dollars of revenues to market models.
IO pie growing should more than offset concerns about therapeutic density. The growth in market opportunity due to adding add'l cancers should offset greater competition as additional companies move forward with similar drugs at rapid speed. Five companies could be on the market with PD-1/PD-L1 drugs within five years. We envision MRK launching first in late '14, followed by BMY in 2015, Roche in 2016, AstraZeneca in 2017, and possibly Merck KGaA in 2018.
Early IO data at ASCO that were encouraging included: 1) MRK's pembrolizumab (MK-3475) showed 20% (11/56) ORR in PD-L1+ advanced head & neck cancers; 2) Roche's MPDL3280A showed 43% (13/30) ORR at six weeks and 52% (13/25) at 12 weeks in PD-L1+ bladder cancer; 3) BMY/Ono's nivolumab showed 25% (2/8) ORR in platinum-resistant ovarian cancer.
UBS says Roche impressed the most at ASCO this year:Mark Schoenebaum (@MarkSchoenebaum) June 1, 2014
At its ASCO analyst meeting, Roche demonstrated scientific leadership in the Immunooncology (IO) field with impressive presentations by Ira Mellman (Genentech/ gRED) and Hy Levitsky (pRED), revealing an IO pipeline of 20 compounds, (of which 6 in clinical development before YE). Roche's IO portfolio seem the broadest, but also the most diverse in the industry. Combined with a rigorous scientific approach to patients selection (beyond simple PDL1 expression testing), this optimally positions Roche to harness the power of immunotherapy through multiple, tailored combinations. Whilst the IO field probably won't make as big a leap forward at ASCO 2014 as expected earlier this year (as combo's seem harder to develop), Roche's presentation suggests that they should be able to establish itself at the leader in the IO field for years to come.
Bottom Line - Winners and Losers at ASCO So Far: Halfway through the American Society of Clinical Oncology (ASCO) Annual Meeting, we see ROG, ABBV, MRK and AZN as large-cap winners so far, and see LLY coming out as the primary loser. Pertaining to BMY, we see mixed read-through at present (positive: support for broad potential of I-O category potential and positive data in ovarian cancer; negative: lack of clarity on biomarker strategy and perception that competitors like ROG may be continuing to close the gap), however, key updates at their Monday Investor Event (7 AM Central) combined with readout from the adjuvant melanoma phase 3 Yervoy study will ultimately tip investor sentiment to positive or negative.
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