Here's What Merck's Keytruda News Means For Bristol-Myers

Shares of Merck & Co., Inc. MRK are rallying strongly, while Bristol-Myers Squibb Co BMY is being punished on Wednesday.

News Behind The Move

The contrasting moves come after Merck announced late Tuesday that the FDA has accepted to review the sBLA for KEYTRUDA, plus chemotherapy, for the first-line treatment of patients with metastatic or advanced non-squamous, non-small cell lung cancer regardless of PD-L1 expression and with no EGFR or ALK genomic tumor aberrations.

Keytruda is Merck's anti-PD-1 immunotherapy for treating melanoma, which has spread or cannot be removed by surgery; non-small cell lung cancer, which has spread or has tested positive for PD-L1; and head and neck squamous cell cancer, which has returned or has become non-responsive to chemotherapy.

FDA Favorably Disposed

Merck clarified that this is the first application for regulatory approval of Keytruda in combination with another treatment. The FDA has granted priority review and the PDUFA date has been set for May 10, 2017. Additionally, the sBLA is to be reviewed under the FDA's accelerated approval program.

Merck has presented positive results for Keytruda-chemotherapy combo from a mid-stage trial in October last, However, the markets were anticipating the filing for approval could be done only after data is obtained from a broader Phase III study.

Why Is Bristol-Myers Bleeding?

Bristol-Myers is developing a lung cancer drug called Opdivo . The immunotherapy turned in disappointing results last year when it was evaluated as a monotherapy.

With the latest development, it looks like Merck will edge out its competition in bringing to the market its combo therapy. Other competitors also evaluating combination therapies include Roche Holding Ltd. (ADR) RHHBY and AstraZeneca plc (ADR) AZN.

At Time Of Writing

• AstraZeneca was sliding 2.47 percent to $28.03.
• Bristol-Myers Squibb was slumping 5.53 percent to $56.67.
• Merck was adding 1.65 percent to $60.91.
• Roche was down 1.33 percent at $29.59.