Why Bristol-Myers Failure Is a Huge Win for Merck

By Chris Lange Updated Jan 13, 4:53AM EST · Published Aug 5, 10:35AM EDT

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Why Bristol-Myers Failure Is a Huge Win for Merck — © Thinkstock

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.

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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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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.