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Roche Bests Bristol-Myers with Melanoma Study

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Wall Street expected more robust results from newly-approved Yervoy.

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Melanoma, a deadly form of skin cancer, drew a lot of attention at a major cancer conference over the weekend as two drug studies showed higher survival rates among patients given new treatments. The winner: Swiss drug maker Roche bested Bristol-Myers Squibb (BMY) with very strong study results.

The two drugs work very differently. And, indeed, they someday may be used in combination. But there was clearly very high expectations for the new Bristol-Myers' melanoma drug Yervoy. As reported, Bristol-Myers showed "solid but somewhat disappointing data" for its new treatment, Leerink Swann analyst Seamus Fernandez says.

On the other hand, Roche and Japanese drug maker Daiichi Sankyo's experimental treatment vemurafenib reduced the risk of death in patients with advanced melanoma by 63% compared with those treated with chemotherapy, according to a late-stage study presented at the American Society of Clinical Oncology's meeting in Chicago Sunday. The data also was published in the New England Journal of Medicine.

The Roche drug, known as a BRAF inhibitor, targets a specific gene mutation.

"This is really a huge step toward personalized care in melanoma," said the drug study's lead author Paul Chapman of Memorial Sloan-Kettering Cancer Center in New York. "This is the first successful melanoma treatment tailored to patients who carry a specific gene mutation in their tumor."

Roche recently submitted an application to sell vemurafenib in the US and in Europe. The company says it's been granted a priority review, which is given to new drugs that offer major advancements in treatment.

The company also plans to further study the drug, including with Bristol-Myers' newly approved Yervoy. (See Minyanville: Bristol-Myers' Skin Cancer Drug Gets FDA Nod) Going into the ASCO meeting, Yervoy was a major focus of both the medical and investment community. The drug, an immunotherapy, was shown in studies to be effective in patients who didn't respond to other treatments.

The big opportunity for Bristol-Myers this weekend was to show that Yervoy also could be effective as a first treatment for advanced melanoma patients. In a study detailed Sunday, Yervoy was given to patients with chemotherapy and compared with success in treating patients with only chemo. The result: Patients who received Yervoy and chemo had a median survival rate of 11.2 months vs 9.1 months for those people only receiving chemotherapy.

Let the debate begin. Will two months of additional survival justify the big price for Yervoy, which is $120,000 for four infusions?

"Physician feedback suggests that Yervoy's $120,000 price tag has tempered their pace of prescribing," Fernandez says.

Shares of Bristol-Myers are trading down less than 1% in pre-market trading Monday morning, falling to $27.80. The stock is up almost 6% this year.

Immunotherapy is definitely piquing investor interest. Like Dendreon's (DNDN) prostate cancer vaccine Provenge, Yervoy uses the body's immune system to attack cancer.

"The immune system is a living drug, able to adapt itself to changes in the tumor that might otherwise lead to resistance when treated with chemotherapy," says Jedd Wolchok, director of immunotherapy clinical trials at Memorial Sloan-Kettering. Wolchok led the Yervoy study.

The National Cancer Institute reported more than 68,000 new cases of melanoma last year and 8,700 deaths.

Among the companies also developing melanoma immunotherapies: Amgen (AMGN), Vical (VICL) and Agenus (AGEN). Vical's stock, which has surged more than 90% this year, is trading up about 4% in pre-market trading Monday morning, rising to $4.02.
No positions in stocks mentioned.
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