As AstraZeneca chases rivals, immuno-oncology gets complicated

London : Three years after Pfizer's failed bid for AstraZeneca, the British drug maker aims to prove in the coming weeks that its cancer immunotherapy can deliver on bold sales forecasts made during that takeover battle.

Central to AstraZeneca's case is a trial called MYSTIC which is testing the drugs durvalumab and tremelimumab in lung cancer. If initial results to be reported at mid-year indicate success, this could confirm the company's place at oncology's top table.

But the market for medicines boosting the immune system's ability to fight tumors is increasingly competitive and the science is moving fast, raising questions as to whether AstraZeneca can produce a knock-out win.

Merck & Co, Bristol-Myers Squibb and Roche already have similar drugs approved in lung cancer and the race is on to launch effective combinations for previously untreated disease in patients a potentially huge market.

"I think there will be multiple approvals in the first-line (untreated) space," Naiyer Rizvi, head of thoracic oncology at Columbia University Medical Center, told Reuters. "The question is going to be how do you position all these different options."

Durvalumab and tremelimumab are immuno-oncology (I-O) drugs which, by helping the body's immune cells kill cancer, offer an alternative to toxic chemotherapy. While not without side effects, I-O is a kinder option that also promises longer-lasting efficacy, although the high cost is a concern.

Analysts at Jefferies see a $20 billion opportunity for I-O drugs in first-line non-small cell lung cancer, with sales split between I-O monotherapy (administering one such medicine on its own); I-O plus conventional chemotherapy; and combinations of two I-O drugs, as in AstraZeneca's approach.

"There's a critical unmet need, which is why there is so much excitement about immunotherapies and so much activity," said Rob Iannone, AstraZeneca's head of late-stage I-O development. "Current outcomes are still very, very poor."

As experience builds with using the new agents, rival drugmakers have been busily amending clinical trial plans to keep up with a shifting landscape, while also launching new studies to exploit a coming second generation of I-O medicines.

The issue has been further complicated by doubts over how to identify patients who will benefit. The latest data suggests that the level of mutation in tumors may be a better biomarker than the current widely used benchmark, a protein called PDL-1.

"PDL-1 is a bit of a blunt instrument," said Rizvi. "In future, I think you will see a lot better science around identifying patients based on their genetics."

BIG SHARE PRICE SWING

AstraZeneca shares, which at around 46 pounds still trail the 55 pounds offered by Pfizer in 2014, are expected to move sharply up or down on the MYSTIC data.

But the result may not be as clear-cut as some investors hope because the full data will emerge in stages.

Headline news on progression-free survival (PFS), or extending the time before cancer worsens, is due in June or July, with details following later, possibly at the European Society for Medical Oncology congress in Madrid in September.

Doctors, patients and investors may have to wait until 2018 to learn whether durvalumab and tremelimumab actually help patients live longer by extending overall survival (OS).

Given the competitive landscape, the pressure is on to achieve both PFS and OS. "In the first-line setting, I think it is important to hit both," said Rizvi, who is principal investigator for the MYSTIC trial.

Indeed, a miss on PFS could be enough to mark AstraZeneca as a likely loser in the multibillion-dollar I-O race, according to UBS analysts.

AstraZeneca's Iannone sees it rather differently, arguing that the durable response generated by I-O drugs makes long-term survival, not PFS, the gold standard test.

"It looks as if OS is a more robust endpoint," he said. "We want to preserve PFS, even if we know that the study might ultimately have to wait for OS to appreciate the full benefit."

Importantly, AstraZeneca has built multiple options into its trial design, with potential to prove that durva/treme can help all patients or a subset with high levels of PDL-1. In addition, durvalumab is being tested on its own.

Back in 2014, AstraZeneca predicted durvalumab could have peak sales of $6.5 billion, including combination therapies, making it the biggest contributor to revenue growth.

Current analyst forecasts are only around half this level, according to Thomson Reuters data, making the next few weeks pivotal in building or eroding expectations.

AstraZeneca has two chances to build confidence ahead of MYSTIC, with durvalumab potentially winning approval in bladder cancer - a relatively small market - and data also due from a lower-profile lung cancer trial called ARCTIC.

But rivals are moving fast. Merck is expected to get a U.S. green light to sell a combination of its I-O drug Keytruda and chemotherapy in first-line lung cancer by May 10, while Bristol-Myers and Roche also have important upcoming combination data.

All of this makes success critical for AstraZeneca, which is struggling with falling sales from loss of patents on blockbusters such as cholesterol drug Crestor and is doing external deals to help fund new-drug research.

Pfizer may have left the stage but some analysts and bankers believe AstraZeneca could become a target again in any future wave of pharmaceutical industry consolidation.

By Ben Hirschler (editing by David Stamp)