ViewPoints: More uncertainty at AstraZeneca as initial MYSTIC data falls short

There can be no doubt that the failure of AstraZeneca's MYSTIC study to hit a progression-free survival (PFS) endpoint in non-small-cell lung cancer (NSCLC) is a significant blow to the company. Shares were down 15 percent in pre-market trading on Thursday, wiping some $12 billion from AstraZeneca's market cap.

MYSTIC is assessing both the combination of AstraZeneca's PD-L1 inhibitor Imfinzi and its CTLA-4 inhibitor tremelimumab and Imfinzi as a monotherapy for the treatment of first-line NSCLC patients. After much speculation, AstraZeneca confirmed on Thursday that MYSTIC is looking at the efficacy of these two regimens in patients with minimum PD-L1 expression levels of 25 percent.

Unfortunately, the company also confirmed that Imfinzi plus tremelimumab failed to meet a primary endpoint of improved PFS versus standard-of-care therapy. Furthermore, as a secondary endpoint, though not formally tested, Imfinzi monotherapy would have also failed to demonstrate a PFS benefit in this setting. AstraZeneca must now wait to see if one or both arms meet their primary endpoints of overall survival (OS), with final data expected in the first half of 2018. Analysts at Citi warned that potential patient cross-over in some trial sites could prevent MYSTIC from reaching this goal.

The long-awaited result adds considerable uncertainty to AstraZeneca's future positioning in the potentially lucrative immuno-oncology market and its broader growth prospects. Bernstein analyst Tim Anderson reiterated on Thursday that a positive outcome from MYSTIC is "necessary but not sufficient" to support AstraZeneca's investment narrative. Confirmation of MYSTIC's initial failure also comes hot on the heels of a rumoured approach for CEO Pascal Soriot from Teva; one that appears to have been rebuffed, but which could take on additional significance in the coming weeks as the implications of this setback sink in. Soriot said during a media briefing on Thursday he is committed to his position.

Imfinzi has achieved some successes this year; in the PACIFIC study the PD-L1 inhibitor was shown to significantly improve PFS in patients with locally-advanced, unresectable NSCLC who had not progressed following standard platinum-based chemotherapy concurrent with radiation therapy. This opportunity could generate blockbuster sales, argue analysts. Furthermore, Imfinzi secured its first approval in May, from the FDA for second-line bladder cancer. However, sales of just $1 million for the franchise during the second quarter showcase just how competitive certain segments of the immuno-oncology market have already become, while simultaneously illustrating the commercial significance of moving Imfinzi into the most lucrative setting of first-line NSCLC.

On this front, Merck & Co. appears to be the clear beneficiary of AstraZeneca's setback. Its decision to assess Keytruda as a monotherapy in first-line NSCLC patients with minimum PD-L1 expression levels of 50 percent looks increasingly smart, while its approved combination of Keytruda plus chemotherapy (irrespective of PD-L1 status) is the only immuno-oncology alternative to standard chemotherapy in the approximate 70 percent of patients whose tumours have lower than 50 percent PD-L1 expression.

The broader competitive picture in NSCLC remains far from complete, however. Merck's Keytruda/chemo combination is only trending towards an OS benefit, having been approved on the strength of a PFS benefit shown in Phase II studies, and Phase III data are expected to read out later this year. Roche is also expected to publish Phase III data for its own chemo-combo utilising its PD-L1 inhibitor Tecentriq before the end of 2017.

Like AstraZeneca, Bristol-Myers Squibb is also prioritising the use of a CTLA-4 inhibitor (its marketed drug Yervoy) in combination studies. Making cross-trial comparisons in the PD-(L)1 space has become notoriously difficult, but failure of MYSTIC to hit its primary PFS endpoint will cast further doubt on the viability of this mechanistic pairing.

AstraZeneca could face criticism about the multiple design changes it made to MYSTIC without additional enrolment, in a bid to benefit from clinical results seen elsewhere, despite its repeated claims that powering of the study would not be compromised. The company has no doubt sought to placate investors by also announcing on Thursday that in the FLAURA study, Tagrisso improved PFS versus current standard of care in first-line EGFRm-positive NSCLC, although the magnitude of benefit is yet to be confirmed. This positive result is "unlikely to offset the MYSTIC failure," wrote analysts at Morgan Stanley, who also suggest that many investors are "likely to write off the opportunity waiting for OS readout in 2018."

Another consideration is whether the hit to AstraZeneca's share price opens the company up to a takeout approach, but JP Morgan analysts downplayed this scenario, suggesting instead that the acquisition argument has not only been weakened by doubt as to the commercial viability of the Imfinzi/tremelimumab combination, but the additional announcement by AstraZeneca on Thursday that it will co-develop and commercialise both Lynparza monotherapy and Lynparza/PD-(L)1 combinations with Merck. Not only does this "remove the upside," attached to any combination product, but AstraZeneca has also agreed to co-market Lynparza as a monotherapy, which makes the company "even less attractive," to an acquirer, they add.  

To read more ViewPoints articles, click here.