Last week Bristol-Myers Squibb (BMS) announced that CheckMate-026, a Phase III trial of Opdivo (nivolumab) in first-line non-small cell lung cancer (NSCLC) had failed to meet its primary endpoint of PFS in patients expressing PD-L1 on at least 5% of tumor cells (BMS Press Release, August 5, 2016). Following this announcement, the negative impact on Opdivo’s commercial prospects has dented our assessment of BMS’ future performance.

How did the market react?

  • BMS shares tumbled by more than 20% following the failure of CheckMate -026 trial.
  • Shares of a key rival company in the immuno-oncology space, Merck & Co., soared up by 10%.

How will Opdivo be impacted going forward?

So far, BMS has been at the forefront of the immuno-oncology space, with approximately three times the global sales for Opdivo ($1,544 million) than its closest rival, Merck & Co.’s Keytruda ($563 million) in the first half of 2016. Rapid approvals across multiple cancer indications (Opdivo has bagged seven FDA approvals to date) and no requirement for a diagnostic test (unlike Keytruda in pre-treated metastatic NSCLC) are the key factors responsible for the tremendous sales growth of Opdivo. The results from CheckMate-026 have been the first roadblock in Opdivo’s development. Opdivo’s first-line approval in NSCLC was set to be a key future sales driver for the agent, as this population comprises almost half of the overall NSCLC drug treatable population, meaning it is large and therefore potentially lucrative.

In light of the results from CheckMate-026, BMS will be pinning its hopes on the outcomes from CheckMate-227, which is exploring the potential of Opdivo + Yervoy in first-line NSCLC. Importantly, Merck & Co. has already announced positive findings for Keytruda in first-line NSCLC from the Phase III KEYNOTE-024 trial, putting Merck & Co. at a competitive advantage to BMS in this indication. However, KEYNOTE-024 evaluated Keytruda in a relatively niche patient subset (those who were PD-L1-positive on at least 50% of tumor cells), whereas CheckMate-227 will include evaluation in both PD-L1-positive patients as well as the whole trial population. If CheckMate-227 proves positive, this could therefore return BMS and Opdivo to a position of strength as it would be applicable to a broader population of first-line NSCLC patients than Keytruda.

DRG perspective
The commotion surrounding the failure of Opdivo as a monotherapy in first-line NSCLC has caused jitters among investors and market players. However it is too early to suggest that this is a jeopardizing situation for BMS’s Opdivo franchise as a whole, considering we still await results from Opdivo + Yervoy in CheckMate -227, and also considering Opdivo’s indication approvals and that it continues to be investigated in multiple other indications.

Prior to the clinical failure of Opdivo in CheckMate-024, DRG reported that BMS and Merck & Co. were the front runners in the immuno-oncology space – a trend which we believe is most likely to continue despite these recent data. Other novel checkpoint inhibitors like Roche’s Tecentriq (atezolizumab), Merck KGaA’s avelumab among others are still set to play a major role in shaping the future market landscape for first-line NSCLC.
Further information on the oncology market, NSCLC, and BMS’ portfolio can be found in DRG’s Company and Drug Insights and our NSCLC Disease Landscape & Forecast.

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