A cancer immunotherapy shocker has Bristol-Myers
Squibb tumbling and rival Merck soaring on Friday(5) morning.
A cancer immunotherapy shocker has Bristol-Myers
Squibb (BMY) tumbling and rival Merck (MRK) soaring on Friday morning.
Bristol's blockbuster checkpoint inhibitor Opdivo
failed to meet the primary endpoint in a very important phase III clinical
trial involving patients with newly diagnosed non-small cell lung cancer, the
company announced.
Bristol shares plummeted 17% to $62.37 in Friday
trading. That's a loss of $22 billion in market value on the Opdivo
disappointment.
Merck's stock price shot up 7% to $61.79 Friday, or a
gain of nearly $12 billion in market value. The Opdivo setback is seen as a win
for the company's competing checkpoint inhibitor Keytruda.
More people die of lung cancer than any other cancer
type, which is why lung cancer is considered the largest and most important
commercial opportunity for drug companies developing new immunotherapies.
Peak revenue estimates for Bristol's Opdivo in lung
cancer, alone, were in the range of $12 billion to $15 billion, with the bulk
of those sales expected to come from treating patients with newly diagnosed, or
first-line, lung cancer. This is why Friday's clinical trial failure is so
shocking and the market reaction to Bristol's stock price so violent.
Merck has previously presented positive clinical trial
data on Keytruda in a segment of first-line lung cancer patients. Use of the
drug in these patients could grow now that Opdivo has been hit with a setback.
Bristol gambled and lost on a riskier Opdivo
study which enrolled patients with lung cancer containing low levels of a
protein known as PD-L1. Merck took a more conservative approach with its
Keytruda study by restricting enrollment to patients with lung tumors
expressing high levels of PD-L1.
Checkpoint inhibitors like Keytruda and Opdivo work by
blocking the interaction between PD-L1, a protein found on the surface of tumor
cells. with PD-1, a receptor found on immune cells. Blocking the PD-1/PD-L1
connection allows a patient's immune system to recognize and kill cancer cells.
Bristol could rebound from Friday's setback with an
ongoing phase III study of lung cancer patients treated with a combination of
Opdivo and its other cancer immunotherapy Yervoy. But results from this study
are not expected until early 2018.
The failure of the first-line lung cancer study erases
$4 to $4.5 billion from Bristol's Opdivo revenue forecasts, said Evercore ISI
analyst Mark Schoenebaum in an email to clients Friday. Conversely,
approximately $4 billion in added potential revenue now becomes available to
Merck, he said.
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