ASCO 2014: Competition Heats Up

Bristol, Merck, Roche and AstraZeneca all boast drugs that are turning cancer into a chronic disease, or even eradicating it entirely, while some analysts look the other way.

Jun 11, 2014 at 4:42PM

Gains in cancer research are maddeningly hard to understand, and many new drug regimens are extremely toxic. That's what analysts from BMO Capital seized upon, when they issued a negative report on biopharma Bristol-Myers Squibb (NYSE:BMY). The report was one factor that sent the stock plunging 6% last Thursday morning.

Good, but not good enough?
BMO analysts downgraded the stock amid concerns about the high toxicity for Bristol's drug combo nivolumab+Yervoy. They also cited lowered expectations for the combo's efficacy against lung and kidney cancers, based on their interpretation of studies released at the world's largest meeting of cancer doctors, the American College of Clinical Oncology meeting in Chicago.

According to ISI's Mark Schoenebaum, Bristol's nivo+Yervoy combo in previously treated kidney cancer showed data that was "quite good, but perhaps not as mind blowing as the combo drugs were in melanoma at last year's ASCO." Schoenebaum was more supportive of nivolumab in first-line lung cancer, with one-year overall survival rates "stellar" at between 59% and 87%.

Competition heating up
While Bristol has outlined how nivo+Yervoy could be a potential megablockbuster that could earn billions of dollars a year, it has some competition to consider. While Bristol is the biggest spender on cancer immune therapies ($649 million in trial spending, with $483 million consumed by trials in Phase 3), Merck (NYSE:MRK) has a competing drug -- pembrolizumab -- in the clinic, and Roche Holding (NASDAQOTH:RHHBY) has its own PD-L1 drug in the race. All three drugs unleash a T-cell attack on cancer cells. In essence, they deactivate a cloaking mechanism that mutes the immune system's response.

Roche is the smallest spender on high-stakes patient trials of the three companies, at $189 million per year, while Merck spends $327 million per year. But Roche believes it may have a safer approach, and early data shows that investigators could use the maximum dose safely, making it a strong candidate.

Another drug from Merck, pembrolizumab, showed median progression-free survival of 5.5 months, with an overall response rate of 40% in some patient groups. So many patients in the trial are still alive that researchers can't yet put a number on how much of a boost they're getting in overall survival from the drug, according to Dr. Antoni Ribas, an oncologist at the University of California.

Merck also released early findings on a Phase 1b study evaluating the drug in patients with advanced head and neck cancer, which is very difficult to treat and, and the news was good enough to support "further study", according to Dr. Tanguy Seiwert, associate director of the Head and Neck Cancer Program at the University of Chicago.

Final thoughts
Cancer research is an investment opportunity, but it's important to remember that there are real people being affected -- people like Kim Sherman--a 48-year-old mother of three with few prospects of survival who joined a clinical trial of Bristol's nivo+Yervoy. According to a report, in Sherman's trial, 79% of the initial group of 53 patients are still alive after two years. In Sherman's case, within three weeks she was seeing pain reductions, and three months later her tumor disappeared, restoring her to her family.

With Merck, Bristol, AstraZeneca, and Roche all racing to test immune therapy drugs on as broad an array of tumors as possible, the long term picture for cancer patients looks more and more promising. That may be a distinction lost on those whose interest in cancer research is strictly in its investing potential, but it shouldn't be missed. Citigroup analysts predict that immune therapies could lead to a market of $35 billion a year. But cancer is still the second most common cause of death in the United States, accounting for nearly 1 out of every 4 deaths. The real excitement for most of us is that we may have finally made an important step toward a cure.

Are these the best dividend stocks for your portfolio?
The opportunities ahead for stocks like Merck, Bristol, and Roche, are enormous. But are these really the best income stocks for your portfolio? After all, the smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

 Editor's Note: A previous version of this article referred to pembrolizumab by its former name, lambrolizumab. The Fool regrets the error.

Cheryl Swanson has no position in any stocks mentioned. The Motley Fool owns shares of Citigroup. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers