Oncology remains a red-hot favourite among investors and dealmakers. It was central to 2019’s first two big deals, Bristol-Myers’ Squibb’s $74 billion Celgene merger and Lilly’s purchase of Loxo Oncology. Oncology dominated 2018’s outsized biotech IPO roster, according to Informa’s Strategic Transactions. Industry’s development pipeline saw an almost 70% increase in the number of immune-oncology candidates between September 2017 and September 2018, according to New York-based Cancer Research Institute.
There are good reasons for this dominance. The concept of harnessing the immune system to fight cancer has been validated by the huge success of a first generation of immuno-oncology (I-O) drugs, notably Merck & Co. Inc.’s checkpoint inhibitor Keytruda (pembrolizumab), which sold about $7 billion in 2018. The breadth of the approach means I-O drugs may work across several cancer types, and as part of an almost endless range of combinations. Keytruda is now approved for almost a dozen indications (including one defined not by tumor location but by the presence of certain biomarkers), and is being tested in multiple further trials.
Keytruda is not alone: behind it and BMS’ first-to-market Opdivo (nivolumab) is a growing handful of similar drugs. Regeneron/Sanofi’s Libtayo (cemiplimab) became the category’s 6th entrant in late 2018, with its FDA approval for a type of skin cancer called metastatic cutaneous squamous cell carcinoma (CSCC). Latecomers to this crowding field are seeking out the quieter corners: Libtayo is the first checkpoint inhibitor approved for CSCC, and its sponsors are going after other less well served indications, like cervical cancer and basal cell carcinoma.
While the unmet need across many cancers remains significant, regulators are granting expedited approval to innovative drugs that help meet those needs. Many are initially approved in advanced settings where patients have few other options, commanding high prices as a result. Oncologists and their patients are embracing these new drugs, driving a shift in cancer treatment away from chemotherapy towards more targeted, personalised approaches. A Datamonitor survey of 26 US oncologists revealed that most expect a doubling of the proportion of their cancer patients on I-O treatments within the next five years, to 50%. GlobalData forecasts that the I-O market will by then be worth $34 billion.
Yet checkpoint inhibitors, despite their success, do not work across all – or even most – tumor types. They work best in tumors that already trigger a mild immune response.
This constraint is driving multiple programs designed to unlock the full potential of this tried-and-tested drug class, by co-delivering something that stimulates the immune system in a targeted fashion. Such programs include oncolytic viruses and bi-specific antibodies (antibodies that hit two targets at once). Licensing and acquisition activity is following: Merck and Johnson & Johnson in 2018 acquired oncolytic virus players Viralytics and BeneVir, respectively, while Boehringer Ingelheim snapped up ViraTherapeutics the same year. Clinical data around several oncolytic virus-checkpoint combination trials are expected during 2019, likely driving further deals. Meanwhile, Regeneron hopes to trump its checkpoint inhibitor competitors by combining Libtayo with one of its bi-specific antibody candidates.
Bi-specific antibodies may also challenge another new I-O drug class: chimeric antigen receptor T-cell (CAR-T) therapies. These involve extracting patients’ T-cells (a type of immune cell) and tweaking them to recognise cancer. But they’re complicated and expensive to make and administer. Sales of pioneer CAR-T therapies, Novartis’ Kymriah (tisagenlecleucel) and Gilead’s Yescarta (axicabtagene ciloleucel) have remained modest. But a new generation of CAR-T therapies may soon emerge, too. Companies like France’s Cellectis are developing off-the-shelf therapies using donor T-cells, for instance.
These are just a few of the I-O drug mechanisms under investigation. The immune system is not a single pathway with a single on/off switch; it has multiple, interacting pathways and actors, many of which scientists still don’t understand. Cancer cells, too, are complex and evolve over time.
From a scientific point of view, then, immuno-oncology is just getting going. The limits on this field will come from payers, as they figure out how to fund a growing range of high-priced treatments and treatment combinations.