AACR: Merck unveils PD-1xVEGF bispecific data in NSCLC, remains tight-lipped on phase 3 plans

Merck’s MK-2010 PD-1xVEGF bispecific showed early NSCLC activity, with unconfirmed ORR of 55% in 11 first-line PD-L1-positive patients at 20 mg/kg and 44% in nine patients at 30 mg/kg. Safety looked broadly manageable versus peers, though the 30 mg/kg cohort saw higher toxicity, including grade 4 hemoptysis and one death, while the 20 mg/kg cohort had fewer severe events. The data are encouraging but too early to change the competitive landscape, and Merck still has no disclosed phase 3 plan for the asset.

Analysis

MRK’s data are directionally useful, but strategically they mainly confirm that the PD-1xVEGF class is “real” rather than that Merck has a best-in-class asset. The bigger implication is that the competitive bar for any late entrant is now shifting from response-rate novelty to operational execution: if Merck waits too long, it risks arriving after payer, trial-enrollment, and physician mindshare have already consolidated around the first mover. That makes this less about one poster and more about whether Merck is willing to spend the next 12-18 months on a broad franchise build or treat MK-2010 as a secondary option behind its ADC pipeline.

For SMMT, the read-through is incrementally negative only at the margin because the class is no longer unique; the important point is that differentiation will likely come from squamous safety, durability, and global development speed, not the headline ORR. If MK-2010 keeps showing manageable proteinuria/bleeding at lower dose levels, it weakens the premium investors may have assigned to first-in-class status and increases the probability of a class-wide multiple compression. Conversely, BNTX and PFE are better positioned to benefit if Merck’s slower cadence signals that capital and management attention will remain elsewhere, allowing those programs to become the perceived “broad backbone” candidates.

The contrarian miss is that the market may be overreacting to MRK’s silence as if it were a lack of conviction; it could just reflect portfolio prioritization while the company gathers enough data to choose between monotherapy, combinations, or a narrower tumor subset. The second-order risk is not scientific failure, but strategic indecision: every quarter without a phase 3 plan gives competitors time to lock in site networks, combination partners, and front-line treatment algorithms. Over the next 3-6 months, the catalyst path is likely more about trial-start announcements and dose-selection clarity than efficacy deltas, which means the stock reaction should be driven by program velocity, not this single efficacy snapshot.

Key Decisions for Investors

• Maintain a tactical short bias on SMMT on strength over the next 1-3 months; the risk/reward improves if investors are still pricing ivonescimab as a durable first-mover monopoly rather than a class leader in a crowded field.
• Initiate a relative-value long MRK / short SMMT pair for 3-6 months if MRK weakness is driven by perceived pipeline indecision; downside on MRK is buffered by diversified oncology cash flows, while SMMT faces higher de-rating risk if Merck and others narrow the class premium.
• Build a modest long BNTX or PFE position into any pullback over the next 4-8 weeks; both names have more visible catalysts from broader PD-(L)1xVEGF development cadence, so they benefit if the market rotates toward execution rather than headline response rates.
• Avoid chasing MRK upside on this readout alone; wait for a formal phase 3 strategy or combination roadmap, because the next re-rating catalyst is likely a company-guided development plan, not another early cohort update.
• For options traders, consider downside protection on SMMT 2-4 months out; the tail risk is a competitor-led de-rating if Merck signals rapid catch-up and the market reassesses peak share assumptions.