Bristol-Myers Squibb On Roll With Opdivo Results

Oct. 03, 2019 10:12 AM ETBristol-Myers Squibb Company (BMY)CELG9 Comments
William Meyers profile picture
William Meyers
7.29K Followers

Summary

  • Opdivo had positive trial results for esophageal cancer, melanoma, and non-small cell lung cancer.
  • This should reassure investors that sales will continue to rise.
  • Celgene shareholders benefit when BMY stock rises.

Bristol-Myers Squibb (NYSE:BMY) is a large-cap ($82 billion), diverse pharmaceutical company that has been in the news due to its planned merger with Celgene (CELG). Bristol-Myers Squibb derives about two-thirds of its revenue from two of its drugs, the cancer therapy Opdivo and the anticoagulant Eliquis. A series of Opdivo trial results released at ESMO over the weekend reinforce the proposition that Bristol-Myers Squibb has been through a period of being undervalued by the market. That, in turn, implies that Celgene has been undervalued, as investors will receive $50 per share plus one Bristol-Myers Squibb share plus a CVR (contingency value right).

Bristol-Myers Squibb's 52-week low of $42.48 was reached largely on the hypothesis that new drug revenues would not make up for drugs running into generic or biosimilar competition, including the portfolio to be acquired with Celgene. The ESMO (European Society for Medical Oncology) presentations show the strength of the Opdivo and Yervoy franchises. That does not force the market to return to the 52-week high of $63.69, but it makes it more likely.

ChartData by YCharts

Opdivo for esophageal cancer

On September 30, 2019, Bristol-Myers Squibb and Ono Pharmaceutical (OTCPK:OPHLF) announced results from the Phase 3 ATTRACTION-3 trial evaluating Opdivo (nivolumab) versus chemotherapy (docetaxel or paclitaxel) for unresectable advanced or recurrent ESCC (esophageal squamous cell carcinoma) second-line patients whose cancers were refractory or intolerant to combination therapy with fluoropyrimidine and platinum-based drugs. The primary endpoint was OS (overall survival). Opdivo demonstrated a statistically significant improvement over chemotherapy, with a 23% reduction in risk of death and a 2.5-month improvement in median OS compared to patients treated with chemotherapy. The safety profile of Opdivo in this trial was consistent with previously reported studies.

Second-line esophageal cancer is both common and difficult to treat, with a low survival rate, so having Opdivo

This article was written by

William Meyers profile picture
7.29K Followers
I provided stock and bond research and analysis to a small cap specialist investor, Lloyd Miller, from 2002 until his death in January 2018. For my own account I invest mainly in technology and biotechnology stocks. My technology and investment web site is openicon.com, where readers can view the notes I take to make decisions and to write articles for Seeking Alpha.

Disclosure: I am/we are long CELG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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