Shares of Merck & Co. Inc. (MRK) - Get Report surged on Tuesday, Jan. 16, after the pharmaceutical giant announced that a study of its immuno-oncology drug Keytruda with chemotherapy had achieved its goals in a lung cancer study.

The announcement "solidifies Merck's leadership in the first-line advanced cancer space," said Brad Loncar, portfolio manager at Loncar Investments LLC and founder of Loncar Cancer Immunotherapy Index, in an interview.

Merck said a Phase 3 study of Keytruda in combination with chemotherapy drugs pemetrexed (Alimta) and cisplatin or carboplatin in previously untreated, metastatic non-squamous, non-small cell lung cancer met its primary goals with respect to overall survival and progression-free survival.

Overall survival refers to the period of time either from the diagnosis date or the beginning of treatment that a patient is still alive, while progression-free survival refers to the period of time during and post-treatment that a patient lives with the disease but it does not worsen.

Merck's shares were trading at $62.72 on Tuesday afternoon, up nearly 7%. Over the last 12 months, shares are up only 0.5%, however.

Based on an interim analysis by the independent Data Monitoring Committee, Keytruda in tandem with pemetrexed plus platinum chemotherapy resulted in significantly longer overall survival and progression-free survival compared with just pemetrexed and platinum chemotherapy, Merck said.

Tuesday's announcement came earlier than investors expected. "The timing of this readout is well ahead of expectations ... I recall getting lots of investor pushback when I argued that enrollment timelines imply a possible interim in mid-2018 ... many investors thought it wouldn't be till 2019," wrote Evercore ISI analyst Umer Raffat in a Tuesday note.

Merck in October said it had decided to add overall survival as one of the primary endpoints in the clinical trial, dubbed Keynote-189. At the time, the company said that the updated completion date for the study would be February 2019 and that there would be opportunities for interim analyses.

That the study was stopped a year early "likely means that data is unambiguous and very good," said Loncar.

Merck said it will present results from the clinical trial at an upcoming medical meeting.

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