Bristol-Myers Drops to 2-Year Low as Cancer Drug Disappoints

(Bloomberg) -- Bristol-Myers Squibb Co. dropped to the lowest level in two years after its immune-based therapy Opdivo fell short of already low expectations in study results that throw into question whether the drug can help lung-cancer patients who’ve just been diagnosed.

The results were in stark contrast to the performance of Merck & Co.’s Keytruda in a similar group of patients. Keytruda reduced the risk of death or cancer progression by 50 percent in a study, giving Merck a head start on all of its competitors in the race for the best new immune therapy against lung tumors, the most common cancer in the world.

Bristol-Myers shares, which had already slumped 19 percent this year through Friday, fell 9 percent to $50.43 at 10:18 a.m. in New York. Merck gained 2.1 percent to $64.10.

In results presented Sunday at the European Society for Medical Oncology meeting in Copenhagen, Opdivo data showed it wasn’t superior to chemotherapy even in patients with high levels of a protein called PD-L1, which is thought to be a predictor of how well the immune-system drugs will work. The data came from a detailed analysis of the Checkmate-26 study, whose main findings were released in August, causing Bristol-Myers’ stock to slump.

Merck’s entire trial was designed around people with high PD-L1 levels, while Bristol-Myers tried to reach a wider range of patients. Bristol-Myers had already announced in August that Opdivo didn’t help the broader group. Sunday’s results showed the treatment didn’t aid the narrower group either.

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The results were “below expectations,” wrote John Scotti, an analyst at Evercore ISI in New York. Imbalances in the trial, where more women and more people with high PD-L1 levels got chemotherapy, may have skewed the results, said Nick Botwood, the company’s development lead for lung cancer.

“The study was designed to ask a very specific question at the 5 percent expression,” Botwood said during a conference call after the data presentation. “It wasn’t designed to ask a question at 50 percent.” He was referring to a measure of how prominent the PD-L1 biomarkers are in a patient’s cancer -- with 50 percent being considered a high level.

Sam Fazeli, an analyst with Bloomberg Intelligence, said Bristol-Myers shouldn’t be written off just yet.

“No one believes that Opdivo is dead in first-line,” Fazeli said in an e-mail. “It’s a drug that has worked in many settings. It’s just that the trial had so many aspects that apparently worked against it.”

Merck and Bristol-Myers have been battling for dominance in the new field of immune-oncology, in which medicines are designed to boost the body’s own defenses against cancer. Both drugmakers’ medicines are already approved for people whose lung cancer got worse after initial treatment. The trials presented Sunday would form the basis for approval or rejection as an initial treatment in lung cancer, a much bigger group of potential patients, and could be good news for Merck.

“With the right tactical moves, Merck can turn Keytruda into the broadest offering in lung cancer,” said Tim Anderson, an analyst with Sanford C. Bernstein & Co.

--With assistance from Caroline Chen To contact the reporters on this story: Naomi Kresge in Berlin at nkresge@bloomberg.net, Allison Connolly in London at aconnolly4@bloomberg.net, Cecile Daurat in Wilmington at cdaurat@bloomberg.net. To contact the editors responsible for this story: Marthe Fourcade at mfourcade@bloomberg.net, Chitra Somayaji at csomayaji@bloomberg.net, Cecile Daurat, John Lauerman