Incyte (INCY) - Get Report is benefitting from the competition between Merck (MRK) - Get Report and Bristol-Myers Squibb (BMY) - Get Report for cancer immunotherapy supremacy.

On Sunday, Bristol and Incyte announced plans to test a combination therapy consisting of the Big Pharma's checkpoint inhibitor Opdivo with epacadostat, Incyte's experimental IDO inhibitor, in phase III studies of patients with first-line lung cancer and first-line head-and-neck cancer.

Bristol and Incyte will also expand an ongoing mid-stage study of Opdivo/epacadostat to include relapsed/refractory melanoma patients.

For Incyte, the new Bristol tie-up comes just days after a similar, but even larger, clinical program was signed with Merck to combine its checkpoint inhibitor Keytruda with epacadostat.

Merck and Incyte are already conducting a phase III study of Keytruda/epacadostat in melanoma but will now also run phase III studies of the combination therapy in lung, bladder, kidney and head-and-neck cancer.

The two partnerships put Incyte in a good spot. Merck and Bristol are sharing the costs of these expensive late-stage clinical trials. Epacadostat, if eventually approved, could have a label that includes data combination data from the two leading checkpoint inhibitors.

The broad development plan across five different types of cancer widens Incyte's lead over other IDO inhibitors in clinical development, including a compound from Newlink Genetics (NLNK) - Get Report -- partnered with Roche (RHHBY) -- which is still in the midst of a phase I study.

Bristol's cancer immunotherapy program stumbled last year when Opdivo failed in first-line lung cancer. Merck, taking a more conservative approach with Keytruda in lung cancer, emerged as the winner, for now.

The combination of two or immunotherapy drugs to treat cancer more effectively is the next big commercial opportunity. Bristol can't afford to lose any more ground, so it's shadowing Merck, move for move.

And that suits Incyte just fine.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.