The FDA's approval of cancer immunotherapies that target the PD-1 pathway offers new hope to thousands of patients with advanced cases of cancer. However, determining whether it's Bristol-Myers Squibb's (NYSE:BMY) Opdivo or Merck & Co.'s (NYSE:MRK) Keytruda that will capture the lion's share of the PD-1 market is uncertain. We asked our Motley Fool experts to weigh in with their thoughts on which of these drugs is likely to be more successful. Read on to learn what they think.

Bmy Scientist

Source: Bristol-Myers Squibb

Cheryl Swanson: After many decades of disappointing research setbacks, a new form of immunotherapy is about to change the landscape of cancer treatment. Of the two drugs that have already won FDA approval, I'm convinced Keytruda will be more successful.

Merck's Keytruda received FDA approval last September, three months before Bristol-Myers' competing candidate, Opdivo. Being first to market gives Merck the chance to establish a foothold. Priced at $12,500 per month -- or about $150,000 per year -- Keytruda is obviously expensive. But it had unprecedented response rates in heavily pretreated patients for advanced melanoma, a disease that's particularly swift and deadly, so it should be adopted quickly. Analyst Tim Anderson from Bernstein Research estimates $900 million in Keytruda sales for 2015. By 2020, his expectations are for $3.7 billion.

By contrast, Bristol-Myers scored FDA approval in late December. Opdivo already costs $143,000 per year in Japan, where it's already approved, and similar pricing is expected in the United States. Both drugs are up for expanded approval for non-small-cell lung cancer, or NSCLC, later this year. But Merck's drug is in line for a broader approval as a second-line therapy for both squamous and non-squamous disease, while Opdivo is up for third-line approval, and for the squamous population only, at least at first. (Squamous lung cancer currently accounts for 25% of NSCLC cases.)

However approvals shake out, PD-1 inhibitors represent a huge stride forward in tough-to-treat cancers, and they're also being tested against Hodgkin lymphoma and bladder, breast, and head and neck cancers. What distinguishes them from standard therapies is the duration of response -- creating a real hope that they can take a terminal disease and, for some patients, provide them with long-term survival.

Sean Williams: Cancer immunotherapies, which enhance the body's immune system to help it recognize and eradicate cancer cells, could be the next major advancement against a number of solid-tumor cancers. While I'm confident that both Merck's Keytruda and Bristol-Myers' Opdivo will be successful, I believe Opdivo offers the brighter future, for two primary reasons.

Although Cheryl makes a good point that Keytruda was first to market among anti-PD-1 inhibitors, and first-in-class approvals usually do net a rapid ramp-up in market share, Opdivo's clinical results in metastatic melanoma and its price point should both help it overcome Keytruda in sales.

Currently, as Cheryl noted, a full year of Keytruda would cost a patient or insurer $150,000. For Opdivo, the price is $143,000, or $7,000 less per year. While these drugs are being targeted at very late-stage melanoma where one-year survival is rare, insurers are nonetheless going to look for ways to give their members high-quality therapy options at the lowest possible cost. If it means saving a few thousand per patient, then I'd expect Opdivo to be the therapy of choice for insurers and pharmacy-benefit managers. Of course, it's still worth noting that as these drugs gain new indications, their prices could push lower, which may make this an irrelevant point a few years from now.

Additionally, Opdivo's clinical trial results were impressive. Not to take anything away from Keytruda and its 24% overall response rate with durations of response lasting between 1.4 months and 8.5 months, but Opdivo's 32% overall response rate with a third of its patients exhibiting durable responses of six months or longer was just a bit more impressive.

To be clear, I expect both drugs to thrive. However, I believe Opdivo has a decent shot at hitting Wall Street's aggressive estimate of $5 billion in peak annual sales within the next five to seven years.

Brian Orelli: Flip a coin. You're just as likely to get the correct answer as analyzing the current data we have for Merck's Keytruda and Bristol-Myers' Opdivo.

Both drugs are approved for late-stage melanoma patients. As Sean points out, Opdivo's data looks a little better than Keytruda's, although comparing data from different clinical trials is dangerous, as they may not have enrolled patients with equal tumor burden. Even if you want to assume that Opdivo is the best drug for late-stage melanoma patients, in five years, the revenue from those patients will be overwhelmed by sales for patients who have other types of cancer.

That's the beauty of the PD-1 pathway; it appears that many tumor cells use it to tell the immune system not to attack. The data in other cancer types looks promising, but it's hard to call a winner given the small sample size and the aforementioned issue of comparing drugs when they aren't set up as head-to-head trials.

In phase 1 trials of Hodgkin lymphoma patients, for example, Opdivo produced an overall response rate of 87%, which was better than Keytruda's 66% response rate. But 21% of the patients who got Keytruda had a complete response, better than Opdivo's 17%. It's impossible to guess from that data which drug is going to look better in larger late-stage trials, let alone which drug doctors will eventually favor.

And even the current trials testing the drugs as monotherapies aren't likely to give a full picture of their long-term potential, because the drugs will eventually be used as combination treatments with other cancer drugs. That'll open up even more indications, and the drugs won't necessarily be competing with each other.

Both companies have already set up some partnerships to test combinations with drugs from other companies, and I expect more will follow. If you want to try to predict a long-term winner, keep track of the number of drug-combination trials the companies run, as it'll give some indication of the potential addressable market for the drugs.  


Brian Orelli has no position in any stocks mentioned. Cheryl Swanson has no position in any stocks mentioned. Sean Williams has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.