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Bristol-Myers (BMY) Opdivo Gets Positive CHMP Opinion

Zacks Equity Research

Bristol-Myers Squibb Company BMY announced that the Committee for Medicinal Products for Human Use (CHMP) has recommended the approval of immunotherapy Opdivo as monotherapy for the treatment of squamous cell cancer of the head and neck (SCCHN) in adults progressing on or after platinum-based therapy.

The European Commission will now review the CHMP recommendation.

The positive opinion from the CHMP was based on results from open-label, randomized phase III trial, CheckMate -141, that evaluated the overall survival (OS) of Opdivo in previously treated patients with SCCHN following platinum-based therapy compared to investigator’s choice of therapy (methotrexate, docetaxel, or cetuximab) in the adjuvant, primary, recurrent or metastatic setting. The trial was stopped early in Jan 2016 based on a planned interim anlaysis as assessed by the independent Data Monitoring Committee.

The committee concluded the study met its primary endpoint of OS superiority in patients receiving Opdivo compared to investigator’s choice of therapy. The safety profile of the drug in the above mentioned study was consistent with prior studies in other tumors.

We remind investors that Opdivo is approved for varied indications in both the EU and the U.S. Opdivo has received approvals for several indications including melanoma, head and neck, lung, kidney and blood cancer. The Opdivo+Yervoy regimen is also approved in multiple markets for the treatment of melanoma.

The drug recorded sales of $3.4 billion in 2016, up from $942 million in 2014. Bristol-Myers is working on expanding the label of Opdivo further. Opdivo became the first PD-1 inhibitor to be approved for a hematological malignancy – classical Hodgkin lymphoma in both the U.S. (May 2016) and the EU (Nov 2016). In Nov 2016, Opdivo gained FDA approval for the treatment of patients with recurrent or metastatic squamous cell carcinoma of the head and neck with disease progression on or after platinum-based therapy.

Label expansion into additional indications would give the product access to a higher patient population and increase the commercial potential of the drug significantly.

However, the company has faced setbacks with regard to this. In Oct 2016, Bristol-Myers announced the final primary analysis of CheckMate -026, a phase III study that evaluated the use of Opdivo monotherapy as a first-line treatment of patients with advanced non-small-cell lung cancer (NSCLC) whose tumors expressed PD-L1 greater than or equal to 1%. The study was conducted to assess progression-free survival (PFS) in patients with greater than or equal to 5% PD-L1 expression.

Previously announced top-line data from the study (Aug 2016) showed that CheckMate -026 did not meet the primary endpoint of superior PFS compared to chemotherapy. In patients with greater than or equal to 5% PD-L1 expression, the median PFS was 4.2 months with Opdivo and 5.9 months with platinum-based doublet chemotherapy. Overall survival was 14.4 months for Opdivo compared with 13.2 months for chemotherapy. In Jan 2017, the company announced not to pursue accelerated regulatory pathway for the regimen of Opdivo plus Yervoy in first-line lung cancer in the U.S. based on a review of available data.

Bristol-Myers’ failed efforts to expand Opdivo’s label to include first-line treatment of lung cancer and the consequent negative investor reaction is now weighing over the company’s shares. A potential earlier-than-expected entry of Merck’s MRK Keytruda in combination with chemotherapy will further impact sales.

Bristol-Myers Squibb’s share price has decreased 12.7% in the last twelve months, while the Zacks classified Large Cap Pharmaceuticals industry gained 5.8%.

Rank & Stocks to Consider

Bristol-Myers Squibb is a Zacks Rank #3 (Hold) stock. Some other better-ranked stocks in the health care sector include Heska Corp. HSKA and Retrophin, Inc. RTRX. Heska and Retrophin carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Heska’s earnings estimates increased from $1.53 to $1.65 for 2017 and from $1.90 to $2.01 for 2018 over the last 30 days. The company posted a positive earnings surprise in all of the four trailing quarters with an average beat of 291.54%. Its share price increased 37.1% year to date.

Retrophin’s loss estimates narrowed from 85 cents to 72 cents for 2017 and from 67 cents to 53 cents for 2018 over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 80.55%. 

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