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What to watch for at the ESMO Conference Clipped from Goldman Sachs PDF.... BMY: CM-227 in front-line NSCLC We expect BMY to present CM-227 Part 1 data (front-line non-small cell lung cancer) as part of the presidential symposium (Sept 28th). In July, the Opdivo+Yervoy combo (Part 1a) achieved the co-primary endpoint of overall survival vs. chemo in patients with PD-L1 >=1%, but Part 2 (Opdivo+chemo) of the trial did not achieve the primary endpoint of overall survival vs. chemo (LINK). In addition, BMY disclosed an exploratory analysis in PDL1 negative (Part 1b) patients treated with Opdivo+Yervoy showed a survival benefit which provide another potential opportunity to carve out a portion of the 1L market, although a key question beyond the data will be how regulators (and/or NCCN) view these data which likely depend on how compelling the data is given the exploratory nature of the analysis. We expect the focus for the CM227 data will be on the profile of Opdivo+Yervoy relative to MRK’s Keytruda+chemo (KN-189 and KB-407) in both the PDL1 positive and PDL1 negative population. We believe that expectations are generally measured into the full data presentation, as Keytruda+chemo sets a clinical high bar. However, if the Opdivo+Yervoy data are competitive on some aspects (more details below) and the regimen is approved in front-line lung, this could help continue to drive some sales in lung cancer (as well as Opdivo’s existing second-line lung label). We model 2020+ sales of ~$2bn (vs. ~$2.8bn in 2018). What efficacy data have we seen thus far from CM227? In Oct. 2018 in response to request from regulators, BMY disclosed median overall survival data in both TMB high and low populations (regardless of PDL1 expression) from CM227 — Opdivo+Yervoy vs. chemo demonstrated HR = 0.77 (95% CI: 0.56, 1.06) and HR = 0.78 (95% CI: 0.61, 1.00), respectively. The median OS in patients with TMB ≥10 mut/Mb was 23.03 months on the Opdivo plus low-dose Yervoy arm and was 16.72 months on the chemotherapy arm. In patients with TMB <10 mut/Mb the median OS was 16.20 months and was 12.42 months on the combination and chemotherapy arms, respectively. Taking the weighted average (based on number of patients) of the two TMB groups yields OS of 19.1 months for Opdivo+Yervoy vs. 14.4 for chemo, but obviously this is overly simplified and has many caveats. For reference, Keytuda+chemo did not reach median OS in KN189 (non-squamous) vs. 11.3 months for chemo (1 year survival rates of 69% vs. 49%) and in KN407 (squamous) Keytruda +chemo achieved median OS of 15.9 months vs. 11.3 months for chemo (1 year survival rates of 65% vs. 48%). BMY also previously published PFS data at AACR in April 2018 from CM227 Part 1 among all randomized and TMB evaluable patients regardless of TMB or PDL1 status. Opdivo+Yervoy demonstrated 1-yr PFS of 31% vs. 17% for chemo with an HR = 0.83 (95% CI: 0.72, 0.96). Our prior conversations with physicians suggest that Keytruda + chemo sets a high bar in the front-line NSCLC setting, and they generally expect Keytruda (monotherapy if >=50% PDL1 expression or Keytruda+chemo if <50% PDL1 expression) will most likely remain the standard of care. The physicians we spoke with noted in order to use Opdivo + Yervoy broadly as a 1L regimen they would need to see a meaningful improvement over the Keytruda data (KN-189 and KN-407) and present a manageable safety/tolerability profile. One physician commented that they would like to see at least a 6 month improvement over Keytruda on PFS and OS, while another views a 2-3 month improvement in PFS as sufficient (focus on PFS given potential impact on OS from crossover), though acknowledged it would be difficult for Opdivo+Yervoy to achieve. They also commented that if efficacy is inferior, only a small portion of patients would likely elect for a chemo sparing regimen such as Opdivo+Yervoy. One physician noted that he would also be interested to see if BMY could define a biomarker driven subset of patients that are most likely to respond to the combo (it appears that TMB will not be an option at this point). At a recent investor conference BMY management remarked that some of the elements of the efficacy of Opdivo and Yervoy that resonate with physicians in melanoma and renal, for example, are deep responses (such as complete responses) and long duration of response. Management also highlighted that the combo is active regardless of PD-L1 expression and while the PDL1 negative data was an exploratory analysis it will be important to the scientific community. As a result we expect the CR rate (Exhibit 2) and PDL1 negative data (Exhibit 4) to also be a focus at ESMO. NSCLC estimates and future studies We see NSCLC as a potential $17bn+ opportunity by 2025. For reference, we model Opdivo NSCLC sales (first and second-line) of ~$2bn in 2025 which represents 26% of our 2025 Opdivo estimate of $7.8bn, or ~7% of BMY’s total revenue. This compares to our Keytruda NSCLC sales estimate of ~$11.5bn in 2025. We provide a sensitivity analysis of BMY EPS to Opdivo WW lung estimates which suggests a potential impact of -7% to -12% (assuming no sales for lung) to +6-11% assuming $4bn in sales (vs. our current projections of $2bn); In our view BMY’s ongoing CM9LA trial is now a more important trial and data are expected in 2020. CM-9LA is evaluating Opdivo + Yervoy + chemo (2 cycles) vs. chemo (4 cycles) followed by Alimta maintenance in 1L NSCLC. Prior feedback from an academic physician suggests that the chemo control arm in the trial is no longer the latest standard of care, but if one year OS for the combo was over 90% it would be meaningful. We see additional opportunity for Opdivo in neoadjuvant/adjuvant NSCLC. Thus far, interesting neoadjuvant data has been published for Opdivo demonstrating major pathological response in 45% (9/20) of resected tumors independent of PDL1 expression. We await data from larger Ph3 studies to more fully evaluate the opportunity in this setting and hence, we exclude neoadjuvant/adjuvant use from our Opdivo estimates. BMY is evaluating Opdivo + chemo vs. chemo for neo-adjuvant NSCLC (CM-816). The study is expected to enroll ~350 stage IIB/IIA operable NSCLC patients to receive Opdivo + chemo, Opdivo + Yervoy or chemo alone and will evaluate pathological complete response (data April 2020) and event-free survival (data May 2023). BMY is also conducting a Ph2 study of Opdivo for adjuvant NSCLC study (CM-9TN), data expected 2023 per clinicaltrials.gov. |
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