Merck’s phase III INT data strengthen melanoma outlook; kidney cancer results will determine scope for expansion
JPMorgan believes the full phase III INT data support broad use as adjuvant treatment after melanoma surgery; following the share price pullback, the market’s valuation of the program appears more reasonable. Next, phase II renal cell carcinoma data will influence its potential value in other cancers.
Original source：J.P. MorganFirst published on Unhidea：Original source date：
Key takeaway
JPMorgan is positive on INT’s combination of efficacy and safety in melanoma, while the value of its broader application across cancers depends on the forthcoming renal cell carcinoma data.
What confidence do the full phase III data strengthen?
In a phase III melanoma trial, intismeran autogene (INT), developed by Merck in collaboration with Moderna, had a recurrence-free survival (RFS) hazard ratio of 0.58; after excluding patients who had not received any dose of INT, it fell to 0.51. The latter figure relates to a different analysis population and should be understood separately from the overall result.
The efficacy curves separated progressively over time. In an intention-to-treat analysis calculated from month six, when INT immunization began, the RFS hazard ratio was 0.42, further supporting JPMorgan’s positive assessment of the treatment effect.
The benefit was not visibly concentrated in any one disease stage: RFS hazard ratios were 0.60 and 0.57 for patients with stage IIB–IIIB and stage IIIC–IV disease, respectively, while distant metastasis-free survival hazard ratios were 0.65 and 0.59, respectively.
Will preoperative immunotherapy limit INT’s use?
Competition mainly concerns patients eligible for preoperative neoadjuvant treatment. An estimate cited in the report puts this group at approximately 20%–40% of the early-stage melanoma market. Competition from preoperative regimens will therefore affect choices for some patients, but it does not cover the entire early-stage market.
The combination of Opdivo and Yervoy produced an event-free survival (EFS) hazard ratio of 0.32 in stage III melanoma; INT’s advantage is lower toxicity. The two involve different treatment settings and endpoints. JPMorgan’s assessment is based on INT’s combination of solid efficacy and a relatively mild safety profile, and it accordingly expects broad use in postoperative adjuvant treatment.
Why will renal cell carcinoma data affect the value of applications in other cancers?
The next key result is phase II data on INT as adjuvant treatment after renal cell carcinoma surgery. Merck management views melanoma and renal cell carcinoma as two endpoints of the range of tumors that can be explored; if the kidney cancer results are strong, JPMorgan expects confidence to rise in the prospects for applications in non-small cell lung cancer, bladder cancer and urothelial cancer, whose tumor mutational burden (TMB) falls between the two.
The melanoma data did not disclose subgroup results by high or low TMB. Moderna management said the signals were relatively balanced across high- and low-TMB populations; JPMorgan noted that results for the low-TMB subgroup are more informative for assessing the kidney cancer outlook. The kidney cancer trial therefore serves to test the breadth of the therapy’s applicability.
How much share price value do these clinical developments represent?
Taking into account the 13% rise in Merck’s share price after the initial primary results were announced, its subsequent performance relative to the sector and the recent pullback, JPMorgan estimates that approximately 15 billion–25 billion dollars of Merck’s current market capitalization is attributable to the INT program, and considers the post-pullback valuation more reasonable.
The bank believes this valuation can be supported by an initial commercial opportunity exceeding 3 billion dollars and the potential to expand into multiple tumor settings. The former provides a foundation, while the value of the latter is linked to subsequent clinical results, including those in kidney cancer; JPMorgan maintains its Overweight rating on Merck.
