Cancer immunotherapy, or "immuno-oncology", aims to enable patient's immune system to recognize and subsequently destroy malignancies. Although immuno-oncology as a field has been around for decades, it is only now beginning to be viewed as an important new weapon in the fight against cancer. 

Source: Wikimedia

In 2013, for instance, immunotherapy was named the "breakthrough of the year" by Science magazine after a handful of monoclonal antibodies targeting so-called "immune checkpoints" were shown to dramatically reduce the size of tumors and extend patients' lives in a variety of cancers.

The basic idea behind this branch of immuno-oncology known broadly as checkpoint inhibitors is to suppress a tumor's ability to evade detection by the immune system, allowing the body to mount a potent immune response. Checkpoint inhibitors, in a nutshell, release the brakes on the immune system, which is a radically different approach from other immunotherapies, such as vaccines, that seek to amp up the immune response. 

Source: Merck

The immense power of checkpoint inhibitors as anti-tumor agents is being proven in the clinic by Bristol-Myers Squibb's (NYSE:BMY) programmed cell death, or PD-1, inhibitor nivolumab (Opdivo) and Merck's (NYSE:MRK) similar drug, pembrolizumab (Keytruda). In the second line setting for metastatic melanoma, for example, these drugs led to unprecedented levels of complete remissions and durable responses. As a result, the U.S. Food and Drug Administration approved both of these novel drugs on an accelerated basis for advanced melanoma in late 2014. And these game-changing checkpoint inhibitors are now barreling toward the non-small cell lung cancer market, and are in pivotal trials for dozens of additional hard-to-treat tumor types such as bladder, liver, head, and neck cancer. 

Another rapidly-emerging branch of the immuno-oncology tree is an area known as chimeric antigen receptor (CAR) transduced T cells. CAR-Ts are made by first extracting a patient's T cells from the blood and then using a viral vector to get the cells to express a receptor associated with a specific cancer antigen. The modified cells are then infused back into the patient, where they are then able to recognize and eliminate the cancerous cells of interest.

Source: Bellicum

While this approach to fighting cancer sounds great, the clinical results have been a mixed bag so far. The first-generation therapies proved to be highly efficacious -- especially in blood-based disorders such as B-lymphoid malignancies -- but they came with an unacceptable safety profile, even killing some patients.

Companies like Bellicum Pharmaceuticals (NASDAQ:BLCM)Kite Pharma (NASDAQ:KITE)Juno Therapeutics (NASDAQ:JUNO)Novartis (NYSE:NVS), and Ziopharma (NASDAQ:ZIOP) are all developing a second-generation of CAR-Ts with the stated goals of improving their safety profile and making them more potent against a wider range of cancers. And if all goes according to plan, the first CAR-T therapy could be on the market as soon as 2017. 

How much do cancer immunotherapies cost?
Like most new cancer drugs, immunotherapies are mind-blowingly expensive. The annual cost of Keytruda and Opdivo, for example, are each estimated to be in neighborhood of $150,000. Making matters worse, Opdivo is currently indicated as a co-treatment for advanced melanoma with Yervoy, putting the total annual price in the area of $370,000. The prostate cancer immunotherapy Provenge is also incredibly costly, with a price tag of $175,000 for a typical three-month course of treatment. While the projected costs of the forthcoming CAR-T therapies haven't been announced yet, they will probably all top $100,000 a year based on the current pricing points for immunotherapies in general. 

Where is cancer immunotherapy headed?
The future of immunotherapy is undoubtedly going to be combination treatments. A key lesson from the early success of Opdivo and Keytruda is that they tend to work really well in patients that express a lot of a transmembrane protein known as PD-L1, or programmed death ligand 1. Given that this encompasses only about 20% to 40% of patients depending on the tumor type, the next step is to explore the use of other monoclonal antibodies with different therapeutic targets, in conjunction with PD-L1 inhibitors.

Big pharma has also become keenly interested in exploring the use of various immunotherapies with more traditional treatments like radiation and all-oral therapies. Indeed, these are primary goals in the emerging clinical programs of immunotherapy leaders such as AstraZeneca (NYSE:AZN), Pfizer (NYSE:PFE), and Roche (OTC:RHHBY). And that's why some industry experts believe that immuno-therapies could gobble up a noteworthy 60% of the entire cancer drug market within the next decade, making them a potentially disruptive new technology in the battle against cancer.