Merck (MRK) and Bristol-Myers (BMY) are in focus Monday after the biopharmaceutical giants reported divergent success rates for their respective lung cancer therapies at this weekend's meeting of the European Society for Medical Oncology, or ESMO, leading a number of Wall Street analysts to argue that Merck may have sealed its lung cancer leadership position for some time to come.

MERCK DATA: In what was perhaps the most heavily-discussed data at ESMO 2016, Merck reported results from the "KEYNOTE-024" and "KEYNOTE-021" studies of its lead cancer drug Keytruda as a first-line treatment in non-small cell lung cancer, the most common form of the disease. KEYNOTE-024 evaluated patients whose cancers expressed high levels of the molecule PD-L1, indicating potentially strong receptiveness to Keytruda, and results showed that the drug reduced the risk of cancer progression or death by 50% relative to chemotherapy, achieving a median delay in disease progression of 10.3 months as compared to chemotherapy's 6 months. Keytruda also generated a 40% reduction in risk of death compared to chemotherapy, and shrank tumors in 44.8% of patients -- including six who achieved total cancer absence -- as compared to the 27.8% who saw tumor reduction with chemo. Separately, Merck reported data from a subgroup of KEYNOTE-021 patients whose lung cancer had spread to nearby organs and whose tumors did not necessarily have high levels of PD-L1. Data showed that 55% of Keytruda-plus-chemo patients achieved tumor reduction as compared to 29% of chemo patients, and the drug also delayed disease progression by 13 months as compared to the 8.9 months achieved by chemotherapy alone, though overall patient survival did not meaningfully diverge as of the data cut-off.

BRISTOL-MYERS DATA: Bristol-Myers Squibb, meanwhile, gave a final analysis of CheckMate-026, its trial of Opdivo as a first-line treatment in non-small cell lung cancer patients with at least a minimum expression of PD-L1. The company had disclosed in early August that the trial failed to meet its primary endpoint of delaying disease progression, and details presented at ESMO showed that median disease delay was 4.2 months with Opdivo as compared to 5.9 months with chemotherapy. Overall patient survival was 14.4 months, slightly better than the 13.2 months achieved by chemo.

GOLDMAN SAYS CLEAR WIN FOR MERCK: After this weekend's presentations, Goldman Sachs analyst Jami Rubin raised her price target on Merck to $70 from $65, calling it the "clear winner" at the show. The KEYNOTE-024 results are "practice changing" and a majority of patients with high PD-L1 expression, representing about 25%-30% of the first-line lung cancer market, or more than $3B, will likely be put on Keytruda, Rubin says. In the low-expressor population, however, "the battle rages on" as KEYNOTE-021 showed "compelling" but inconclusive results, says Rubin. She also raises the question of how long Merck can retain leadership if new immunotherapies show superior results next year.

LEERINK SAYS KEYTRUDA STEALS SHOW: Leerink analyst Seamus Fernandez says Keytruda stole the show, with the KEYNOTE-024 data now appearing to support Merck's prediction of a "sea change" in treating high PD-L1 expressors. The "nearly inexplicable" failure of Bristol's CheckMate-026 puts Merck "in the driver's seat" of first-line lung cancer treatment for at least 12-18 months, though it will likely command a long-term presence in the space given the "stunning" Keytruda data, the analyst says. Fernandez also argues that the KEYNOTE-021 data "raises the possibility" that Merck could compete more broadly in the non-squamous market, though significant follow-up data would be required.

PRICE ACTION: Shares of Bristol-Myers dipped about 10% Monday, while Merck is up 1.8% to $63.90 per share.

OTHERS TO WATCH: Other biopharmaceutical companies in focus after presentations at ESMO 2016 and the World Muscle Society Congress include OncoMed (OMED), Novartis (NVS), Biogen (BIIB), AveXis (AVXS) and TESARO (TSRO), which has surged a notable 20% after reporting positive Phase 3 data on its ovarian cancer therapy, niraparib.