If one drug is good, two drugs must be better.
That seems to be what Johnson & Johnson (NYSE:JNJ) and Bristol-Myers Squibb (NYSE:BMY) are thinking with the clinical trial collaboration agreement they entered to test Johnson & Johnson's Imbruvica with Bristol-Myers Squibb's Opdivo in multiple types of blood cancer.
The companies didn't disclose the terms of the collaboration except to say Johnson & Johnson would run the initial studies.
Imbruvica, which Johnson & Johnson developed with Pharmacyclics (NASDAQ:PCYC), is already approved in the U.S. to treat mantle cell lymphoma and chronic lymphocytic leukemia. The duo is also testing the drug in diffuse large B-cell lymphoma, multiple myeloma, follicular lymphoma, and Waldenstrom's macroglobulinemia.
Opdivo, which until recently went by its generic name, nivolumab, isn't approved in the U.S. yet, but it's currently under review by the Food and Drug Administration to treat melanoma. The agency has a goal to review Bristol-Myers' marketing application by March 30, 2015, but will likely hand down a decision before that since the application was a rolling submission, so the FDA has had some of the data package since April.
Bristol-Myers is testing Opdivo on its own in different types of blood cancer. While we won't see that data until The American Society of Hematology meeting in December, there are a couple of clues that the drug is working on blood cancers too. The FDA gave Opdivo Breakthrough Therapy Designation for treating Hodgkin lymphoma based on phase 1b data the agency saw. And Bristol-Myers has indicated that non-Hodgkin lymphoma is one of the possible indications that it will run registration trials for next.
Imbruvica and Opdivo have different mechanisms of action, so it makes sense to combine them to fight blood cancers. Imbruvica is an inhibitor of Bruton's tyrosine kinase, a protein that tells malignant B cells to multiply and spread uncontrollably. Opdivo blocks the PD-1 pathway that tells the immune system not to attack the cancer. When combined, Imbruvica can do the heavy lifting while Opdivo comes in encouraging the immune system to mop things up.
More to come?
This isn't the first collaboration Bristol-Myers has set up for Opdivo. Just last week, Bristol-Myers inked a deal with Novartis (NYSE:NVS) to test Opdivo with three of Novartis' drugs -- Zykadia, INC280, and EGF816 -- in lung cancer patients. Novartis is actually working on developing its own PD-1 drug after buying CoStim Pharmaceuticals earlier this year, but it's far enough back in the clinic that it only makes sense to partner for now.
Merck's (NYSE:MRK) PD-1 drug, Keytruda, which was approved to treat melanoma last month, has been equally sought after as a potential tumor killing partner. In August Pfizer (NYSE:PFE) and Merck announced a collaboration to test Pfizer's Xalkori with Keytruda in patients with lung cancer. Merck has also signed up smaller partners, such as its partnership to test Keytruda with Advaxis' cancer immunotherapy, ADXS-PSA, in prostate cancer.
All of these collaborations are low risk for both sides because the companies retain rights to their drugs. It's hard to know who is benefiting more since the terms aren't generally disclosed, but my guess is Bristol-Myers and Merck have the upper hand since PD-1 is a hot commodity. In the Advaxis-Merck deal, where the terms were disclosed, Merck's only responsibility is to provide the drug; Advaxis is responsible for paying for and running the clinical trials.
With Keytruda approved and Opdivo likely to gain U.S. approval shortly, companies that want to test their drug in combination with a PD-1 drug won't actually have to set up collaborations because they'll be able to buy the drugs directly from wholesalers. But with two companies vying for the collaborator spot, we could see potential partners working Merck and Bristol-Myers against each other to try and get free product or even help running the clinical trial. Given the potential bump in sales, both companies should be jumping at the possibility.
Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson and owns shares of the company. 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.