Merck's (MRK) - Get Report flagship cancer immunotherapy Keytruda delayed the re-growth of tumors and prolonged survival in patients with newly diagnosed non-small cell lung cancer compared to chemotherapy, the company said Thursday.

The new phase III study results from Merck are significant because they represent the first time that a drug belonging to the so-called checkpoint inhibitor class of cancer immunotherapies has demonstrated superiority over standard of care in the treatment of first-line lung cancer patients.

Lung cancer is the most prevalent cancer globally, with more than 200,000 patients in the U.S. and 1.5 million patients globally diagnosed each year. As such, lung cancer is an important commercial market for the drug companies developing new therapies which harness the immune system to target and kill cancer cells.

Cancer immunotherapy sales will reach $34 billion to $35 billion by 2026, of which almost half will come from lung cancer, predicts Leerink, the health care investment bank.

Merck is the first of the Big Pharma companies to demonstrate the efficacy of a checkpoint inhibitor in newly diagnosed lung cancer, but it will likely have company soon.

Bristol-Myers Squibb (BMY) - Get Report is expected to announce results from a phase III study of Opdivo in first-line lung cancer in the third quarter. Roche (RHHBY) is also making an aggressive push with its own checkpoint inhibitor into lung cancer.

For now, Merck is not saying much about how well Keytruda performed in the phase III, study known as Keyote-024. The study compared Keytruda against a doublet chemotherapy in patients with non-small cell lung cancer who had not yet received any systemic therapy.

Keytruda beat chemotherapy on the study's primary endpoint of progression-free survival and the secondary endpoint of overall survival, the company said. The magnitude of Keytruda's benefit was not disclosed Thursday, but Merck said the data are strong enough to support approval filings in the U.S. and Europe.

Importantly, the patients enrolled in Merck's Keytruda study also had to have lung cancers that expressed high levels of the protein PD-L1, defined as a tumor proportion score of 50% or more.

Checkpoint inhibitors like Keytruda and Opdivo work by blocking the interaction between PD-L1, a protein found on the surface of tumor cells. with PD-1, a receptor found on immune cells. Blocking the PD-1/PD-L1 connection allows a patient's immune system to recognize and kill cancer cells.

Bristol is enrolling a larger, more inclusive group of first-line lung cancer patients with tumors expressing lower levels of PD-L1 in its studies of Opdivo. Depending on the study results, this may give Bristol a competitive advantage in the commercial market.

That's what has already happened in the treatment market for more advanced, second-line lung cancer, where Bristol enjoys a significant market share advantage over Merck.

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.