LONDON (Reuters) - Bristol-Myers Squibb has pulled ahead in the race to dominate the hot new cancer immunotherapy market but Merck & Co, Roche and AstraZeneca still have important opportunities to close the gap.
The rapid success of Bristol's Opdivo in treating lung cancer, a major commercial opportunity, has driven up sales forecasts as doctors have bought into the idea of using immune system-boosting drugs to fight cancer.
Industry analysts, on average, now expect Opdivo to have annual sales of $11.1 billion by 2020, making it the third biggest-selling drug in the world by that date behind arthritis and hepatitis treatments from AbbVie and Gilead Sciences, according to Thomson Reuters Cortellis.
That's twice the figure expected for Merck's Keytruda, which like Opdivo was initially launched for melanoma in late 2014 and blocks the same protein called Programmed Death receptor (PD-1) that is used by tumors to evade the body's natural defenses.
It is also nearly four times the sales predicted for Roche's atezolizumab and nine times those for AstraZeneca's durvalumab - both drugs that have yet to reach the market and work slightly differently by targeting PD-L1.
Opdivo's commercial success in lung cancer, coupled with recent proof of its ability to fight head and neck cancer, prompted Cowen & Co analysts last week to increase 2020 sales forecasts for the product by a further $1 billion.
And Barclays analysts believe its rapid adoption is now a major headache for follower companies.
Yet much is still to play for in a market that has grabbed the attention of investors and which some analysts believe could eventually be worth more than $40 billion a year.
Developments this year and next will be crucial in determining if Bristol's rivals can catch up.
Merck, for example, may have clinical data on Keytruda in first-line lung cancer four to six months ahead of Bristol this year, which Bernstein analyst Tim Anderson says could start to level the playing field between the two firms.
Currently, PD-1 drugs are only approved for use after lung cancer patients have tried conventional anti-cancer medicines, so the first-line setting would expand the market substantially.
Another big opportunity lies in combination therapy. Despite the early success of immuno-oncology (I/O) drugs, they still only work in around a quarter of patients, leaving plenty of scope for improvement.
Combining I/O products is particularly important for AstraZeneca, since it has now abandoned plans for an early filing of durvalumab as a single agent in lung cancer.
Chief Executive Pascal Soriot acknowledged this month that his company was behind in monotherapy but said it was making rapid progress in developing drug combinations.
In fact, AstraZeneca may be the first to have Phase III combination data in early 2017, or even late 2016, according to Deutsche Bank.
Pairing two expensive I/O medicines will set a new challenge for healthcare budgets, given each drug typically costs more than $100,000 a year.
The other approach being tested is using an I/O drug alongside a traditional chemotherapy medicine - an avenue where Roche has taken the lead but which the other three companies are now also pursuing.
Some medics have been skeptical, since chemotherapy typically suppresses the immune response while I/O seeks to boost it. But there may be other mechanisms at work and early data has been encouraging, prompting Roche to start a range of clinical trials.
It expects first Phase III results from combining atezolizumab with chemotherapy in lung cancer during 2017.
The Swiss drugmaker is the world's largest supplier of cancer medicines and has put together a huge program of I/O clinical trials, but it is likely to lose market share by 2020 as immunotherapy changes the treatment landscape.
Editing by Susan Thomas