Morningstar | Immuno-Oncology Drugs in Adjuvant Lung: The Next Frontier in Strengthening Moats
Innovation in immuno-oncology drugs has supported the economic moats for Merck, Roche, Bristol-Myers Squibb, and AstraZeneca, and we expect expansion into the adjuvant/neoadjuvant settings to strengthen these moats. We project the lung adjuvant/neoadjuvant market to expand the potential by close to $10 billion in annual sales (not probability-weighted) by 2027, adding to almost $40 billion projected in the late-stage metastatic settings. We estimate an 85% probability of success in this early-treatment setting based on early clinical data and the strength of the drugs in the late-stage setting. We view Merck and Roche as best positioned in the adjuvant setting due to a first-mover advantage with upcoming clinical data in 2020-21. While Bristol and Astra have earlier data in 2020 in the neoadjuvant setting, we are skeptical that these neoadjuvant studies without combination adjuvant chemotherapy will show strong enough efficacy to be competitive. Overall, including both early- and late-stage settings, we believe the potential of immuno-oncology drug sales is most underappreciated for Merck and Roche, and we see both of these companies as undervalued.For the complete report on the potential for immuno-oncology drugs in the adjuvant setting with a focus in the lung cancer indication, please see our report, "Immuno-Oncology Drugs in Adjuvant Lung: The Next Frontier in Strengthening Moats."
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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