Bladder cancer breakthrough: FDA gives Priority Review to Merck’s KEYTRUDA and KEYTRUDA QLEX + PADCEV combinations

The Food and Drug Administration has granted Priority Review to two supplemental biologics license applications filed by Merck & Co., Inc. — one for KEYTRUDA (pembrolizumab) and another for KEYTRUDA QLEX (pembrolizumab and berahyaluronidase alfa-pmph) — each in combination with PADCEV (enfortumab vedotin-ejfv) for certain patients with muscle-invasive bladder cancer (MIBC) who are ineligible for, or decline, cisplatin-based chemotherapy. The decision follows positive Phase 3 data suggesting the regimen significantly improves both event-free survival and pathological complete response rates compared to surgery alone.

The FDA’s Priority Review designation shortens the review window from ten to roughly six months, reflecting confidence that the application could meaningfully advance treatment for a serious condition. For Merck, and its partners Astellas Pharma Inc. and Pfizer Inc., the move deepens their footprint in uro-oncology and potentially ushers in a paradigm shift in perioperative management of MIBC.

Why did the FDA grant Priority Review for KEYTRUDA + PADCEV combinations and how does it reshape muscle-invasive bladder cancer treatment strategies?

The rationale behind Priority Review stems from emerging data from the KEYNOTE-905 / EV-303 trial, which evaluated perioperative administration of KEYTRUDA plus PADCEV in patients undergoing radical cystectomy. The study enrolled cisplatin-ineligible or cisplatin-declining MIBC patients — a population with limited systemic therapy options and historically poor long-term outcomes.

Results were striking. After a median follow-up exceeding 25 months, event-free survival improved by 60 percent (HR 0.40; p < 0.0001) and overall survival improved by roughly 50 percent compared with surgery alone. Pathologic complete response jumped from 8.6 percent to 57.1 percent. Investigators said the combination demonstrated durable responses without introducing new safety signals.

Clinically, these findings mark the first time an immunotherapy + antibody-drug conjugate (ADC) regimen has shown a statistically significant benefit in the curative setting for bladder cancer. For patients who cannot tolerate cisplatin — estimated at nearly half of all MIBC cases — this combination could soon become the first viable perioperative standard of care.

How could earlier-stage approval for KEYTRUDA and PADCEV alter Merck’s oncology business model and competitive positioning in 2025–2026?

From a business-strategy standpoint, Merck’s pursuit of earlier-line indications for KEYTRUDA represents a deliberate shift from metastatic to curative settings — a move that expands the therapy’s eligible population and prolongs its commercial lifecycle. KEYTRUDA generated over $25 billion in 2024 revenue, accounting for roughly 40 percent of Merck’s pharmaceutical sales. New approvals in early-stage cancers, including this potential bladder-cancer indication, are critical to sustaining growth ahead of patent expiry in 2028.

The collaboration with Astellas and Pfizer around PADCEV further diversifies revenue exposure. PADCEV, which targets Nectin-4 expressed in urothelial tumours, posted $1.9 billion in 2024 global sales. Expanding its use from metastatic to perioperative disease could double its addressable market by 2030. Analysts suggest that if both Priority Review filings are approved, the combination could command a multi-billion-dollar market opportunity in bladder cancer alone.

This strategy also reinforces Merck’s positioning as the global leader in checkpoint inhibitor therapy. Rivals — notably Bristol Myers Squibb with nivolumab (Opdivo) and Roche with atezolizumab (Tecentriq) — are pursuing similar early-stage approvals, but the magnitude of benefit seen in KEYNOTE-905/EV-303 places Merck a step ahead in evidence strength.

Why investor sentiment toward Merck, Pfizer, and Astellas is shifting following the Priority Review milestone in bladder cancer

Investor sentiment across the three companies reflects cautious optimism. Merck (NYSE: MRK) shares have traded near $87 to $88, consolidating after a modest 2 percent gain in the week following the Priority Review announcement. Market analysts described the news as “incrementally positive” for valuation models because it reduces regulatory risk while expanding future revenue streams. Institutional flow data show renewed long positions among healthcare-focused funds in Boston and London.

Pfizer (NYSE: PFE) remains in recovery mode after a challenging 2024, when COVID-related revenue declines overshadowed its oncology pipeline. The PADCEV partnership, analysts note, gives Pfizer “tangible exposure” to a late-stage asset outside its own portfolio. Its stock has hovered around $24.65, with options activity indicating muted but steady bullish sentiment.

Meanwhile, Astellas Pharma (TSE: 4503) has maintained stable performance on the Tokyo exchange, buoyed by steady PADCEV sales in Japan and strong cash reserves following its Iveric Bio integration. Market sentiment suggests Astellas may benefit disproportionately from PADCEV’s label expansion, as its royalty structure with Pfizer amplifies margin leverage.

Sector-wide, oncology funds have interpreted the FDA action as a reaffirmation of ADC + IO combinations as the next major value driver. Biopharma ETFs with heavy exposure to Merck and Astellas rose roughly 0.7 percent in aggregate following the announcement.

How regulatory acceleration of immunotherapy + ADC combinations may influence broader cancer-treatment pipelines in 2026 and beyond

The Priority Review granted to these KEYTRUDA regimens also represents a macro-level signal for the entire oncology ecosystem. Regulatory agencies worldwide are increasingly receptive to immunotherapy + ADC combinations as front-line or curative approaches. That acceptance could shorten development timelines across multiple tumour types — including lung, breast, and head-and-neck cancers — where Merck and its peers are testing similar constructs.

Commercially, earlier entry into muscle-invasive disease allows Merck to extend KEYTRUDA’s “franchise durability.” Each new indication prolongs exclusivity value and improves leverage during payer negotiations. It also helps hedge revenue risks associated with biosimilar erosion post-2028. The addition of KEYTRUDA QLEX, a co-formulation with hyaluronidase that enables more efficient subcutaneous delivery, suggests Merck is also future-proofing its delivery platform to maintain differentiation beyond patent cliffs.

Industry analysts expect this trend to accelerate. ADC + IO pairings from companies like Seagen (now part of Pfizer), Daiichi Sankyo, and Gilead Sciences are already progressing toward earlier-stage filings. The success of KEYTRUDA and PADCEV in MIBC could therefore catalyse broader R&D investment across oncology, fuelling new deal flow and capital-market interest.

What risks could temper the enthusiasm surrounding these fast-tracked bladder cancer therapies and how are investors pricing them in?

Despite the positive tone, the regulatory path is not without risk. While Priority Review accelerates timing, it does not guarantee approval. The FDA will evaluate long-term overall survival and durability data carefully before granting expanded indications. Analysts caution that combination toxicities — notably peripheral neuropathy from PADCEV and immune-related adverse events from pembrolizumab — must remain manageable in earlier-stage populations.

Another consideration is payer scrutiny. Perioperative immunotherapy regimens can exceed $250,000 per patient in total cost, and U.S. payers may seek comparative-effectiveness evidence before full reimbursement. Any pricing constraints could moderate near-term revenue upside.

On the competitive front, multiple checkpoint-ADC combinations are under investigation. Bristol Myers Squibb’s Opdivo + Nektar Therapeutics’ bempegaldesleukin, though earlier-stage, could re-enter the conversation by 2026 if new data succeed. Merck’s strategic edge lies in clinical maturity and regulatory momentum — but maintaining that lead will require consistent data readouts and manufacturing scalability.

How the muscle-invasive bladder cancer market could evolve if the FDA approves these regimens in early 2026

If the FDA grants approval under Priority Review, the combination could reach the U.S. market by early 2026, redefining the standard of care for muscle-invasive bladder cancer. Analysts estimate an initial eligible population of 8,000 to 10,000 patients annually, expanding as adoption widens among cisplatin-ineligible patients. Global peak-sales forecasts for the KEYTRUDA + PADCEV regimen range from $3.5 billion to $5 billion, with Merck capturing approximately two-thirds of that revenue.

For hospitals and urology-oncology networks, this would mark a significant operational shift. The ability to administer systemic therapy pre- and post-surgery could improve cure rates and reduce recurrence, but also requires enhanced care coordination between surgeons and oncologists. The broader oncology-pharma landscape would likely respond with new alliance announcements, mirroring how the EV-302 success catalysed ADC-IO pipelines globally.

From a capital-markets standpoint, the Priority Review sets expectations that oncology innovation — rather than macroeconomic factors — will continue to drive biopharma valuations through 2026. Institutional sentiment remains “constructive” across healthcare-fund portfolios, with modest positioning increases in Merck, Astellas and Pfizer.

How oncology experts and institutional analysts interpret the FDA’s fast-track decision as a potential turning point for global cancer therapy innovation

Oncology researchers have called the results from KEYNOTE-905 “the most significant advance in perioperative urothelial cancer in over a decade.” The FDA’s accelerated evaluation reflects that consensus. For the business community, this Priority Review is not only a clinical milestone but a strategic validation of combination-therapy economics: premium biologics used earlier and longer translate to sustained revenue expansion.

If approvals follow, the KEYTRUDA and KEYTRUDA QLEX + PADCEV regimens will symbolise the next frontier of immunotherapy — where checkpoint inhibitors and ADCs work synergistically in curative intent. For Merck and its partners, that outcome could reinforce leadership in oncology’s most competitive segment, attracting investor confidence and reshaping how the market prices innovation in bladder cancer therapy.