(Corrects generic name of Yervoy to ipilimumab in paragraph 12)

By Deena Beasley

April 19 (Reuters) - Merck & Co Inc's Keytruda, approved for treating melanoma, was shown in a trial to shrink tumors in nearly half of advanced lung cancer patients with high levels of a protein used by tumors to evade the body's own disease-fighting cells.

The company said it has filed for U.S. Food and Drug Administration approval of the drug as a treatment for patients with non-small cell lung cancer (NSCLC) whose disease has worsened despite previous treatment.

Keytruda, also known as pembrolizumab, belongs to a new class of drugs designed to help the immune system fend off cancer by blocking a protein known as Programmed Death receptor (PD-1), or a related target known as PD-L1.

On Friday, Bristol-Myers Squibb Co said a trial of its PD-1 inhibitor, Opdivo, was stopped early after the drug proved to work better than chemotherapy in previously treated patients with non-squamous NSCLC. Opdivo is already approved for treating the less-common squamous NSCLC, as well as metastatic melanoma.

Merck said its FDA lung cancer filing is for patients with both squamous and non-squamous NSCLC.

Lung cancer, which kills nearly 160,000 Americans annually, is seen as the biggest opportunity for the PD-1 drugs, which analysts expect to reach billions of dollars in sales.

Merck's Phase 1 study of 495 patients with NSCLC, the most common form of the disease, found that 45 percent of patients with high levels of PD-L1 responded to Keytruda, compared with 16.5 percent of patients with PD-L1 levels of 1 percent to 49 percent.

For patients with PD-L1 below 1 percent, the response rate - defined as tumor shrinkage of at least 30 percent - was 10.7 percent.

Researchers said about a quarter of trial patients had PD-L1 expression in at least half of their tumor cells. Overall, 19 percent of trial patients responded to the drug.

Side effects of Keytruda included thyroid problems. One patient died from pneumonitis, or lung inflammation, which was seen in 3.6 percent of trial patients.

The Merck results were presented at a meeting of the American Association for Cancer Research and published in the New England Journal of Medicine.

Researchers also presented results from a trial showing that Keytruda improved the length of time before advanced skin cancer worsened by 42 percent and extended patient survival by 34 percent compared with treatment with ipilimumab, a different immunotherapy sold by Bristol-Myers under the brand name Yervoy.

(Reporting by Deena Beasley; Editing by Dan Grebler)