Merck KGaA, Pfizer's immunotherapy fails in lung cancer trial

* Trial on pre-treated lung cancer fails to improve survival

* Merck (LSE: 0O14.L - news) said trial results may have been skewed

* Merck still sees potential against lung cancer for Bavencio (Adds trial details, background on immunotherapies)

By Ludwig Burger

FRANKFURT, Feb 15 (Reuters) - Merck KGaA and Pfizer (NYSE: PFE - news) received a setback on Thursday for their drug Bavencio, which is a late starter in the rapidly evolving field of cancer immunotherapies.

In the late stage trial of Bavencio, the drug could not be shown to improve survival in lung cancer patients that had previously undergone unsuccessful chemotherapy, Merck said.

Bavencio, or avelumab, is already approved in two smaller cancer types. It competes against other immunotherapy cancer drugs such as Merck & Co (Swiss: MRK-USD.SW - news) 's Keytruda, Bristol-Myers Squibb's Opdivo, which are both approved for certain types of lung cancer patients, among various other tumour types.

The class also includes Roche's Tecentriq and AstraZeneca (NYSE: AZN - news) 's Imfinzi.

Merck said the results of the late-stage trial, called Javelin Lung 200, may have been skewed by an unusually high number of patients in the comparable control group on chemotherapy that were allowed to switch to a rival immunotherapy because their disease had worsened further.

Merck KGaA's shares traded 0.8 percent lower at 1622 GMT, shortly before the market close, little changed from before the news broke.

Separately, Merck and Pfizer are testing Bavencio in newly-diagnosed lung cancer patients that have no prior treatment, seen as the bigger market opportunity, but results are not expected before the European summer of 2019.

"We are confident of the role of Bavancio to play in the lung cancer market," said Luciano Rossetti, the head of research and development at Merck's pharmaceuticals division.

Improvements in survival versus the control group were, however, seen in a subgroup of patients with moderate or high levels of a genetic marker called PD-L1 in their tumours, but those findings were not statistically significant.

PD-L1 also describes the way in which some tumours manage to evade attacks from the body's immune system. The current class of immunotherapy drugs are design to thwart that disguise mechanism.

Detailed results from the trial will be presented at an upcoming medical congress. The companies aim to share the data with regulatory agencies, Merck said. (Reporting by Ludwig Burger; Editing by Edward Taylor and Jane Merriman)