Bristol-Myers will lead immuno-oncology market in 2022, say analysts

4 March 2015

Analysts at Morningstar Equity Research see significantly more opportunity than the overall market for drugmakers who play in immuno-oncology. The latest Healthcare Observer explains their rationale and argues that players in the space can leverage their positions to strengthen their economic moats, or sustainable competitive advantages.

Key takeaways from the Observer include:

Morningstar analysts expect two immuno-oncology drug classes - CTLA-4 and PD-1/PD-L1 - to generate sales upwards of $33 billion by 2022, well above the market consensus expectation of $20 billion. Striking efficacy across patient types and strong pricing power will drive immuno-oncology growth, with strong sales in lung cancer and support from likely approvals in melanoma, bladder, renal, and head and neck cancer.
First mover and broad combo portfolio player Bristol-Myers Squibb (NYSE: BMY) will lead with 37% market share in 2022. Bristol-Myers was first to market with PD-1/PD-L1 Opdivo (nivolumab) for lung cancer and also owns substantial combination assets. Morningstar analysts further predict a 26% share for Merck & Co (NYSE: MRK), 215 for Roche (ROG; SIX), and 16% for AstraZeneca (LSE: AZN).
Beyond melanoma, lung, renal, bladder, and head and neck cancer, high mutation frequencies in other cancer types could add another $20 billion to the immuno-oncology market opportunity. High mutation-frequency rates and large patient populations will drive growth potential in the gastric, blood, colorectal, and brain cancer markets.
Next-generation immuno-oncology drugs look poised to drive further efficacy improvement, led by IDO (Roche, Incyte) and LAG-3 (Bristol-Myers). The IDO target with CTLA-4 and PD-1/PD-L1 looks to be a powerful combo regimen relevant across many cancer indications, while LAG-3's mechanism of action shows potential strength as well.
The challenging side effects, complex manufacturing, and complicated dosing regimens of CAR-T therapy will likely keep it niche. But with an anticipated 2017 market entry and expected pricing of $150,000 to $350,000, peak probability-adjusted sales should still reach more than $4 billion, led by Novartis’ (NOVN: VX) CTL019, Kite Pharma’s (Nasdaq: KITE) KTE-C19, and Juno Therapeutics’ (Nasdaq: JUNO) JCAR015.

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