Why Bristol-Myers Failure Is a Huge Win for Merck

Health and Healthcare

Published: August 5, 2016 10:35 am

Last Updated: January 13, 2020 4:53 am

Shares of Bristol-Myers Squibb Co. (NYSE: BMY) took a nosedive in Friday’s session following an update in its late-stage Checkmate trial. Unfortunately the results did not reach the primary endpoint, and shareholders are consequently suffering. However, Bristol-Myer’s failure was a big win for Merck & Co. (NYSE: MRK) as shares climbed to close out the week.

Early on Friday, Bristol-Myers announced that CheckMate -026, a trial investigating the use of Opdivo (nivolumab) as monotherapy, did not meet its primary endpoint of progression-free survival in patients with previously untreated advanced non-small cell lung cancer (NSCLC).

The company will complete a full evaluation of the CheckMate -026 data and work with investigators on the future presentation of the results.

Overall, this is a huge blow to Bristol-Myers, while it is especially good for Merck, which has a competing drug that recently succeeded in its trial. Merck’s drug Keytruda also recently won the approval of the European Commission for patients with locally advanced or metastatic NSCLC.

Giovanni Caforio, M.D., CEO of Bristol-Myers, commented:

Opdivo has become a foundational treatment that is transforming cancer care across multiple tumor types. While we are disappointed CheckMate -026 did not meet its primary endpoint in this broad patient population, we remain committed to improving patient outcomes through our comprehensive development program, including the ongoing Phase 3 CheckMate -227 study exploring the potential of the combination of Opdivo plus Yervoy for PD-L1 positive patients, and Opdivo plus Yervoy, or Opdivo plus chemotherapy in PD-L1 negative patients.

Shares of Bristol-Myers were last seen down 17% at $62.42, with a consensus analyst price target of $77.50 and a 52-week trading range of $51.82 to $77.12.

Merck traded up more than 7% at $62.10. The consensus price target is $62.15, and the 52-week range is $45.69 to $62.61.

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