The Markets Are Over-Reacting To The BMS Opdivo® Study News… YAWN.

While this is certainly a chunk of good news, for Kenilworth — I am not so convinced that it is as bad for BMS as a 17 per cent down bubble on the NYSE this morning might imply.

By now, most know that Opdivo didn’t meet a primary end point in CheckMate 026, as the candidate didn’t show progression-free survival in patients with previously untreated advanced non-small cell lung cancer. What is underneath that headline though — is not so surprising. [It is largely in line with what I wrote about trend-lines, at the beginning of the week — so I’ve simply answered the question in that graphic at right.]

Upon quite well-founded prodding from a commenter, below — I will say that MRL gets a big hat-tip, for taking a prudent and wise path through the regulatory woods here! And a classics-inclined observer might say BMS took an “Icarus” approach, in its first line lung study. That is, it essentially elected to take all comers in its lung study, which meant that a relatively small proportion of those lung patients in the study presented with lung tumors that expressed very high levels of PD-L1. In fact, the BMS study simply required that the patients’ tumors express at least five percent PD-L1, to be enrolled. That means it chose a much more diverse population of lung cancer patients — ones less likely to benefit (as much) from the candidate, based on prior research.

By way of contrast, Merck had been taking the approach of screening all its lung cancer study subjects — for high levels of expression of PD-L1. That meant for Merck, a smaller market, but a higher chance of success, in that select lung population. For BMS, it likely means that BMS will be required to run the same diagnostic test Merck plans to run — narrowing its market in lung, but not meaning that Merck will be the better option, more generally. Here’s a bit:

. . . .BMS said Opdivo missed its primary endpoint in the Phase III CheckMate -026 trial, namely progression-free survival in treatment-naïve NSCLC patients whose tumors expressed programmed death ligand 1 (PD-L1) at ≥5%. . . .

So I do think the traders are over-reacting, as to BMS, this morning. But it is good news for Kenilworth. [I should say — for the sake of clarity — I am not long or short either name.] We won’t see the effect of this until mid 2017, however, in all probability. And even then, I think Opdivo is likely to maintain its overall lead, across a wide array of cancers. Out now, for a cloud-covered walk over, this morning. . . smile.


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