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Bristol-Myers' Opdivo's Lung Cancer Study Meets Early Success

Zacks Equity Research

Bristol-Myers Squibb Company BMY announced that its late-stage study evaluating Opdivo versus docetaxel was stopped earlier than expected as it met the primary endpoint. The CheckMate-078 study was being conducted on mainly Chinese patients, who were previously treated for advanced or metastatic non-small cell lung cancer (NSCLC).

The study showed that the patients receiving Opdivo (nivolumab) demonstrated superior overall survival benefit (OS) compared with them who received the standard care of treatment, docetaxel. Based on these top-line results, Bristol-Myers submitted a Biologics License Application (BLA) to the Chinese regulatory authority seeking approval for Opdivo in previously treated lung cancer patients.

 If approved, Opdivo will become the first immuno-oncology treatment approved for previously treated lung cancer patients in China.

So far this year, Bristol-Myers’ shares have rallied 8.7% compared with the industry gain of 16.3%.

We note that Opdivo is already approved for a number of indications. These include classical Hodgkin lymphoma, recurrent or metastatic squamous cell carcinoma of the head and neck (SCCHN) with disease progression on or after platinum-based therapy. Additionally, it is approved as a monotherapy for the treatment of squamous cell carcinoma of the head and neck (SCCHN) in adults progressing on or after platinum-based therapy.

Opdivo is also approved for intravenous use for patients with hepatocellular carcinoma (HCC), who have been previously treated with Nexavar. The drug received approval for liver and colorectal cancers as well.

Meanwhile, the company continues to evaluate Opdivo alone or in combination therapies with Yervoy and other anti-cancer agents. Label expansion of the drug into additional indications would give the product an access to a higher patient population and increase the its commercial potential significantly.

However, Opdivo is facing competitive challenges in the United States. With the FDA approving Merck’s MRK Keytruda, for the first-line treatment of metastatic non squamous NSCLC, the company is expected to suffer further loss of market share.

Zacks Rank & Stocks to Consider

Bristol-Myers carries a Zacks Rank #3 (Hold). Some better-ranked health care stocks in the same space are Sucampo Pharmaceuticals SCMP and Corcept Therapeutics Inc. CORT. While Sucampo sports a Zacks Rank #1 (Strong Buy), Corcept holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sucampo’s earnings per share estimates have moved up from 99 cents to $1.19 for 2018 over the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 15.63%.

Corcept’s earnings per share estimates have moved up from 78 cents to 88 cents for 2018 over the last 30 days. The company delivered positive earnings surprises in two of the trailing four quarters, with an average beat of 14.32%. The share price of the company has increased 148.8% year to date.

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