Immuno-oncology therapeutics (I/O) have changed certain types of cancer treatments. In many ways, they are as close to miracle cures as we’ve seen in decades. BMS’s Opdivo, together with Merck’s Keytruda are expected to generate $8 billion in revenue this year. Keith Speights, with The Motley Fool, looks at three companies whose I/O efforts are particularly promising in 2018.

1. Incyte’s epacadostat

This compound is an IDO inhibitor. Indoleamine 2,3-dioxygenase (IDO) is a protein generated by some cancer cells that shuts down T cells. Merck and Incyte are conducting the Echo-301 clinical trial to evaluate a combination therapy of Keytruda and epacadostat in melanoma, with results expected in the first half of 2018.

Speights notes, "Epacadostat’s potential is so great that several major drugmakers have teamed up with Incyte to test the drug in combination with their own immunotherapies. Bristol-Myers Squibb and Incyte are evaluating a combination of Opdivo and epacadostat in late-stage studies targeting no-small cell lung cancer (NSCLC) and head and neck cancer. AstraZeneca and Incyte are also working together in testing a combination of Imfinzi and epacadostat in treating NSCLC."

2. Bristol-Myers Squibb’s relatlimab

The company is evaluating the drug with its own Opdivo. The drug is a LAG-3 inhibitor. Lymphocyte-activation gene 3 (LAG-3) proteins are generated by some T cells. It controls the T cells’ behavior. Inhibiting it helps the immune system battle cancer. Its Checkmate-142 clinical trial of Opdivo in combination with relatlimab and other drugs is expected to have a primary data readout in the first quarter of 2018.

Speights notes, "This approach is similar to that of PD-1 inhibitors like Opdivo. However, many cancer patients don’t respond well over time to PD-1 inhibitors alone, so Bristol thinks that a combination of immunotherapies could be more effective."

3. Nektar Therapeutics’ NKTR-214

This compound is a CD122 agonist, which stimulates the immune system’s T cells and natural killer cells to fight cancer cells. Nektar has partnered with Bristol-Myers Squibb to evaluate NKTR-214 and Opdivo in melanoma, renal cell carcinoma, and NSCLC. The companies released interim data in November from a Phase I/II trial, which showed, Speights writes, "a 91 percent disease control rate among melanoma patients participating in the study and an 85 percent rate for patients with renal cell carcinoma."

The two companies are currently enrolling patients in the Phase II expansion study, which is scheduled for a data readout in October 2018. The company is also running an early-stage trial of NKTR-214 in combination with Keytruda and with Roche’s Tecentriq. Those studies are also expected to wrap by the end of 2018.

Speights notes that Bristol-Myers Squibb is a solid, although not horribly exciting stock, making it a strong long-term pick. "Nektar ranks among the best-performing biotech stocks of 2017," he writes, "with a year-to-date gain of more than 370 percent. The company could get good news next year from NKTR-214 and plans to file for regulatory approval of experimental pain drug NKTR-181."

Incyte’s market cap is below $20 billion currently. Its Jakafi is a very strong-selling drug, which has inspired a lot of rumors that the company would be a takeover target. Gilead Sciences, Amgen and Bristol-Myers Squibb have been floated as possible buyers. Bigger companies are undoubtedly keeping an eye on the trial with Merck, as are investors.