Merck & Co. Inc.’s minor slip in its latest earnings wrap-up was offset by news of three separately done deals to combine the company’s prized immunotherapy MK-3475 in various phase I/II trials with cancer drugs from Amgen Inc., Incyte Corp. and Pfizer Inc. – arrangements intended to help Merck gain ground against the likes of Bristol-Myers Squibb Co. (BMS) in the anti-PD-1 space by getting access to unpartnered cancer assets by way of research pacts.

”Even big companies don’t have every targeting agent,” pointed out Eric Rubin, Merck’s vice president of clinical oncology, and since “generally, the most profound effects are seen in combinations,” collaborating represents the best way forward.

Whitehouse Station, N.J.-based Merck disclosed in January that it had started a rolling submission of MK-3475 in melanoma cases that are refractory to the immunotherapy Yervoy (ipilimumab, BMS), the first immunotherapy to win FDA clearance. That submission is expected to finish in the first half of this year.

ISI Group analyst Mark Schoenebaum noted in an email to investors that, although Merck may be the first to file for approval of its anti-PD-1 drug, the indication is small and BMS, of New York, “is likely still materially ahead in the much bigger lung cancer market” with its nivolumab (formerly BMS-936558).

Basel, Switzerland-based Roche AG has an anti-PD-1 program, too, and Schoenebaum called the space “hyper-hyper-hyper competitive.” After Yervoy opened the gates, cancer immunotherapy grew hotter than ever. (See BioWorld Today, Dec. 23, 2013.)

Medimmune, the biopharmaceuticals arm of Astrazeneca plc, of London, also is playing the immunotherapy game. MEDI4736, which targets PDL-1, is still early stage but work is “rapidly expanding,” wrote Leerink Swann analyst Seamus Fernandez in a December research report. He called MEDI4736 a “dark horse” worth watching.

In the deals disclosed by Merck:

• • Amgen, of Thousand Oaks, Calif., has the oncolytic immunotherapy talimogene laherparepvec to be tested with MK-3475 in patients with previously untreated advanced melanoma.
• • Wilmington, Del.-based Incyte’s immunotherapy agent, INCB24360, an indoleamine 2,3-dioxygenase inhibitor, often referred to as IDO, will be tried in patients with previously treated metastatic and recurrent non-small cell lung cancer, among other advanced or metastatic cancers.
• • Pfizer, of New York, has two drugs to enter experiments: the small molecule kinase inhibitor Inlyta (axitinib) – approved about a year ago for renal cell carcinoma (RCC) – to be tried with the Merck therapy in patients with RCC, and PF-05082566 (PF-2566), described as an immuno-oncology drug that targets the 4-1BB receptor, which will be explored in multiple cancer types.

“Most interesting” among the deals, in the view of Fernandez, are those with Incyte and Pfizer. BMS is also testing Pfizer’s 4-1BB antibody in phase I trials, combining it with internally developed antibodies.

About Incyte’s therapy, Wells Fargo analyst Brian Abrahams seemed to agree, noting that its compound already is undergoing phase I/II trials combined with Yervoy in metastatic melanoma, and as a single agent for ovarian cancer. Data from the Yervoy combo trial may roll out during the American Society of Oncology (ASCO) meeting in Chicago this spring.

TIPPING POINT

Incyte “has already hinted that activity appears better than would be historically predicted,” Abrahams wrote in a research report. “Mechanistically, exploration of IDO inhibitors with other checkpoint inhibitors (e.g., ipilimumab, anti-PD-1, and anti-PDL-1) has a solid scientific rationale, as they target non-overlapping immune regulatory mechanisms.”

J.P. Morgan analyst Cory Kasimov wrote in a research report that the tie-up with Incyte could be a sign of more ahead for the biotech firm.

“We believe other immuno-oncology players are also confidentially looking at [Incyte’s therapy], and wouldn’t be surprised by additional clinical collaborations,” Kasimov wrote, calling Incyte “one of our top picks in 2014.”

Merck’s Rubin said the company made known “about three ASCO’s ago” another collaboration, similar to those more recently disclosed but with a big pharma peer, Astrazeneca.

In June 2009, Merck and Astrazeneca teamed up to try out MK-2206 and AZD6244 together, in a deal that included an option for either party to continue development under the deal or on its own. “We didn’t have a MEK inhibitor and they didn’t have an AKT inhibitor, so it made sense,” Rubin said.

Immunotherapy in cancer has “been around for a long time, but up until recently, it really wasn’t working very well,” Rubin told BioWorld Today. With an improved grasp of immune biology, “a host of new targets came up,” he said, and the field reached a tipping point. “Once those [targets] began to be tested, I think the results have been astounding,” Rubin said.

“I’m not sure anybody fully understands why, [in] targeting PD-1, at least for now, the data seem to be quite a bit better” than those gained in experiments with Yervoy, which takes aim at CTLA-4.

Rubin, who has been in cancer research for almost three decades, said the wins tend to come in waves, and immunotherapy follows targeted therapy, “where we took advantage of advances in genetics and technology that allowed us to identify mutations that were driving cancers.”

Further terms in the latest deals were not made public.

Merck also disclosed its fourth-quarter earnings, and estimated its full-year earnings per share at $3.35 to $3.53. The average analyst estimate was $3.48 per share. In the fourth quarter, the company earned $781 million, or 26 cents per share, compared with $908 million, or 30 cents per share, in the year-earlier period.

Excluding special items, earnings totaled 88 cents per share in the fourth quarter, and the average analyst forecast was 89 cents. Merck’s stock (NYSE:MRK) closed Wednesday at $53.53, up 2 cents.