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Merck & Co.: Begins BLA Rolling Submission of MK-3475 in Ipilimumab-Treated Melanoma, 6-12 Months Earlier-Than-Expected

This morning (1/13), Merck & Co. (MRK) announced it has started a rolling submission to the U.S. FDA of a BLA for its anti-PD1 MK-3475, for patients with advanced melanoma who have been previously treated with ipilimumab (ipi). The company expects to complete the application in 1H14, earlier than our expectation of YE14/1Q15. This filing is likely based on the Phase 1B results (Study 001), as neither of the Phase 2/3 trials, Study 002 vs. chemo for 2L treatment and Study-006 vs. ipi for 1L treatment, has concluded yet according to clinicaltrials.gov. We expect MRK to file separately for additional indications in ipi-naïve patients (1L treatment) later this year upon primary completion of Study 006 in July and Study 002 in 1Q15.

MK-3475 achieved impressive efficacy in ipi-treated patients in Phase 1b trial. In the Phase 1b trial Study 001, MK- 3475 achieved ORR of 27-62% and immune-related response rate of 33-56% for the 10mg/kg q3w and q2w cohorts in ipi- treated patients. 1-year OS for total patients (ipi-treatment and ipi-naïve) was 81% in the trial. Options for melanoma patients who have failed ipi treatment are limited, especially for BRAF mutation negative patients (primarily chemo). Considering the substantial efficacy and unmet medical needs, along with MK-3475’s breakthrough designation, we anticipate a timely and favorable regulatory action towards this filing.

Bristol-Myers (BMY) will likely to file later this year with both nivo/ipi combo data. We also anticipate BMY to file for MEL later this year, likely including nivo/ipi combo for first line treatment. In addition to the Phase 1b trial Study- 004, which showed 1-year OS of 82% for nivo+ipi current treatment, BMY is also running two Phase 2 trials, CheckMate 064 for nivo/ipi sequential treatment and CheckMate 069 for nivo+ipi concurrent treatment vs. ipi for first line treatment, which are expected to read out in 2H this year. The primary endpoint of CheckMate 069 is ORR. We expect BMY to file with ORR results from this trial supplemented with survival data from Phase 1b trial Study-004. The accelerated timeline should provide revenue upside to both companies in 2015, an estimated $200-300M for MRK and estimated $400M- 500M for BMY.

Source: Barclays Capital/Butler, January 13, 2014