Bristol-Myers Squibb Co on Thursday said it has decided not to seek accelerated U.S. approval for a combination of its two immunotherapy drugs as an initial treatment for lung cancer.
Shares of Bristol, which closed at $55.49 on the New York Stock Exchange, were down 6.2 percent at $52.08 after hours.
The pharmaceutical company cited "a review of data available at this time" for the decision to hold off on filing for Food and Drug Administration approval of the combination of its cancer drugs Opdivo and Yervoy.
Jefferies analyst Jeffrey Holford said in a research note that he still expects the Bristol immunotherapy combination to be approved in the second half of 2018 and sees "no real change to valuation or estimates as a result of this update."
But the move helps secure Merck & Co Inc's current lead in the development of combination lung cancer treatments.
Merck last week said U.S. regulators had agreed to an accelerated review of its application to combine immune system-boosting drug Keytruda with chemotherapy as an initial therapy for advanced lung cancer.
Merck said the FDA would decide by May 10 whether to approve its combination treatment.
Keytruda and Opdivo, which both block a protein called PD-1 to boost the ability of the body's own immune system to kill cancer cells, are already approved to treat a range of cancers, but their biggest market would be first-line lung cancer. Yervoy targets a different protein called CTLA-4.
Immunotherapy is revolutionizing some areas of cancer care but giving it on its own only seems to work better than chemotherapy in previously untreated lung cancer patients who have high levels of a protein called PD-L1. Merck's Keytruda is already approved for such patients.
Since just a quarter to a third of non-small cell lung cancer (NSCLC) patients have tumors with at least 50 percent of cells producing PD-L1, around 70 percent of the market is still up for grabs for successful combination products.
Jefferies' Holford said he still expects the front line, or initial, treatment of NSCLC patients to evolve toward combinations of immunotherapy drugs without chemotherapy, where Bristol-Myers and AstraZeneca Plc have super positions.
(Reporting by Deena Beasley; Editing by G Crosse and Gopakumar Warrier)