New Cancer Drug Breakthrough Targets Genetic Mutations

This article originally appeared on the Motley Fool.

The U.S. Food and Drug Administration (FDA) is tasked with an inglorious job. It digs through hundreds, if not thousands, of pages of clinical trial data to determine if an experimental drug or medical device effectively reaches its treatment goal without outweighing the risks involved with taking or using it. The FDA has formally done this task for the past 111 years, although its more informal origins can be traced all the way back to 1848.

In a typical year, the FDA will approve somewhere between one and two dozen novel drugs. And throughout its entire history, it's only given the green light to a little over 1,500 new molecular entities. You could rightly say that the FDA is an exceptionally picky regulatory body, and that's good news with regard to patient safety and drug effectiveness.

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Most drugs don't have a chance of reaching the FDA's desk, and those that do aren't guaranteed to get a thumbs-up from the agency. The data shows that just one out of every 5,000 experimental drugs that enters preclinical testing will make it to pharmacy shelves. Mind you, this doesn't factor in the failure rate of in-vivo and ex-vivo lab testing, and the discovery stage.

Why this big build-up about the FDA? So you can see how difficult it truly is to get an approval from this regulatory agency. That's what makes what Merck's (NYSE:MRK) Keytruda recently did all the more impressive.

This clinical cancer-drug data is absolutely incredible

A little over two weeks ago, a small army of clinical oncology researchers at esteemed institutions including Johns Hopkins, the Stanford University School of Medicine, the University of Pittsburgh, Ohio State University, and the West Virginia University Cancer Institute published a report on Merck's Keytruda (scientific name pembrolizumab) in the online journal Science. The results, which targeted a specific genetic mutation that Keytruda homes in on, were nothing short of remarkable.

In total, 86 patients were tested over a four-year period. These were patients with advanced forms of pancreatic, prostate, uterus, or bone cancer who'd tried previous lines of standard chemotherapy and progressed. However, all patients contained a genetic mutation called mismatch repair deficiency, seen in about 4% of all cancer patients. That may not sound like it would affect a lot of patients, but as The New York Times pointed out, it would still equate to 60,000 or more eligible advanced cancer patients each year in the United States. That's not negligible by any means.

The result? When given Keytruda, 66 patients exhibited an objective response, which meant their tumors either shrank in size, disappeared completely, or stopped growing -- a state known as stable disease. This works out to an objective response rate of 77%. To put this into context, objective response rates usually decline as the disease progresses, meaning after attempting standard chemotherapies, it's unlikely that patients see responses higher than perhaps the teens or 20s in terms of percentile with advanced stages of the aforementioned cancer types. Keytruda delivered a 77% objective response.

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And it didn't stop there. In addition to the 77% who saw some form of disease improvement, 18 patients had their tumors completely disappear. That's 21% of patients who were essentially told to get their affairs in order with stage 4 cancer and are now being told they are, for the time being, cancer-free.

The FDA has never done this before

The studies conducted on these seven dozen-plus patients were funded by philanthropic donations, with Merck's role merely to supply the studies with doses of Keytruda to be given to patients. These were not trials that were crafted side by side with the FDA as most late-stage studies would be, or funded by a lead drug developer such as Merck.

In addition, there was no placebo component for comparison purposes. It meant the data really had to stand out to wow researchers -- and did it ever.

The FDA responded by doing something it's never done in its official 111-year history. The regulatory body immediately approved a label expansion for Keytruda to cover all cancers with this genetic mutation. The expediency of the approval is impressive, but that's not what's eye-popping here. Instead, it's a fact that the FDA approved a drug based on a mutation regardless of cancer location. Dozens of cancer drugs have been approved to treat lung cancer, for example, but the FDA has never given the green light to a drug to treat a variety of cancer types that simply share a genetic mutation -- let alone based on studies that weren't conducted under strict FDA guidelines.

This is historic, and it could pave the way for similar moves from the FDA if future cancer immunotherapy treatments show unprecedented benefits in treating patients with certain genetic mutations.

Might this pave the way to better affordability?

The only downside here is Keytruda's nosebleed list price of $156,000 a year. Specialty medicines commanding high price tags is nothing new, but given that most cancer immunotherapies such as Keytruda are being combined with existing chemotherapies, it's making for one heck of a financial burden on patients and insurers. If two or more drugs are used, patients and/or insurers get the bill for them all.

However, there is hope that label expansion opportunities may provide a means to make these medicines slightly more affordable (and yes, I fully understand the irony of using the word "affordable" in the same context as a $156,000 list price).

Newly launched cancer drugs typically command a high price point. That;s because the drugmaker in question wants to ensure it recoups its development costs as well as cover a number of external costs, such as other failed trials from discovery through the clinical stage, marketing costs, legal costs, and so on. Once these costs have been recouped, and if the label indications for a cancer drug are expanded, there's the potential that an increase in patient volume and demand could lead the drugmaker to lower its list price, or to at least play ball with insurers to a greater degree, resulting in bigger rebates. With Keytruda's patient pool expanding, it's possible we could begin to see lower list prices, smaller price inflation, or bigger rebates in the future.

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But regardless of what happens with Keytruda's list price, there's little denying what it's accomplished thus far. Among cancer immunotherapies, Merck currently has what looks to be the cream of the crop.

Sean Williams has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.