Image source: Exelixis.

Five months after the Food and Drug Administration approved Bristol-Myers Squibb's (NYSE:BMY) Opdivo as a second-line treatment for renal cell carcinoma -- the most common type of kidney cancer -- yesterday, the agency approved Exelixis' (NASDAQ:EXEL) Cabometyx for the same indication.

Let the battle for patients in today, because Exelixis' management said its salesforce is ready to be in doctors' offices today with plans to ship the drug in the next two weeks.

Both drugs were approved well ahead of the FDA's goal to make a decision, suggesting the agency was impressed with both data packages. The quick approvals shouldn't come as much of a surprise since both drugs beat Novartis' (NYSE:NVS) Afinitor, the current (soon-to-be-former) second-line standard of care for treatment for renal cell carcinoma after patients fail a first-line treatment, such as Pfizer's Sutent.

As Bristol-Myers Squibb and Exelixis prepare to go to battle with each other and take market share from Novartis, it should be noted that the two were once partners on Cabometyx, which used to go by the codename XL184. Bristol-Myers handed back rights to the drug in 2010 to prioritize its internal pipeline, setting up the eventual competition.

Which one is best?
We can't know for sure which drug works better until someone runs a head-to-head trial comparing the two drugs. And it seems unlikely either company would be interested in running that kind of trial because the payoff probably wouldn't be worth the cost -- especially with the possibility of showing the competitor works better.

Still, we can make some comparisons between the two drugs because the companies used the same active control. The median overall survival was 4.9 months longer for patients receiving Cabometyx (21.4 months) versus those receiving Afinitor (16.5 months). By comparison, patients on Opdivo lived for a median of 25 months versus 19.6 months for patients on Afinitor, a difference of 5.4 months.

It appears Bristol-Myers Squibb's Opdivo wins this part of the comparison, but the result is complicated by the fact that Exelixis appears to have enrolled sicker patients since the median overall survival for the patients receiving Afinitor was shorter in the Cabometyx trial than the Opdivo trial.

Rather than looking at the median overall survival -- when half of the patients are still alive -- doctors and the FDA also look at the hazard ratio, which compares the two treatments over the course of the trial. Cabometyx produced a hazard ratio of 0.66 compared to Afinitor, which corresponds to a 34% reduction in the rate of death. Opdivo produced a hazard ratio of 0.73 compared to Afinitor, a 27% reduction in the rate of death.

In general, because the hazard ratio looks at the entire trial rather than one timepoint, doctors think a better (lower) hazard ratio is more important than the difference in median survival, so Cabometyx has a slight advantage on the efficacy side.

Another interesting point when you look at the overall survival data on a plot: Cabometyx patients level off at tad lower than 50%, while survival of the Opdivo patients levels off around 40%. In both graphs, Novartis' Afinitor -- labeled with its trade name of everolimus -- levels off around 30%. It's too early to call the late-survival rates a cure, but if the rates continue, it might give Exelixis a slight advantage.

Image source: Exelixis and Bristol-Myers Squibb. 

While Exelixis arguably has a slight advantage on the efficacy side, Cabometyx's safety profile is arguably more challenging for doctors to manage, with 60% of Cabometyx patients requiring a dose reduction.

And Opdivo is an immunotherapy, which is the hot new area in oncology, giving Bristol-Myers Squibb a bonus point in this tight competition.

If you can't beat 'em, join 'em
Just because both drugs are approved as second-line treatments doesn't mean they can't be used after each other before third-line treatments, so this isn't necessarily a winner-takes-all market. Of course, some patients are going to die before being treated with the other drug, and others will be cured, so the market isn't as large for the loser of this battle for second-line patients.

There's also the possibility of combining the two drugs, which is already being tested in a phase 1b trial combining Cabometyx and Opdivo with and without Yervoy. The trial is designed to find the optimal dose for later trials, so it doesn't have a control group of patients only receiving one of the drugs, which may make it hard to interpret whether the combination is better than either drug alone. We'll have to wait for the next trial to parse out the possibility of the two competitors becoming teammates.

Until then, it should be a good competition for the approximately 17,000 patients in the U.S. eligible to receive either drug.