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Liver cancer failure dents Opdivo potential by $1bn, says analyst

Adds to bad news of forced Otezla sell-off

Opdivo

It’s been a tough start to the week for Bristol-Myers Squibb, with two events carving billions of dollars from group sales forecasts in the next few years.

Yesterday, BMS conceded that that it will have to divest blockbuster psoriasis drug Otezla (apremilast) to get its Celgene merger through financial regulators, missing out on sales that could have reached $3bn a year by 2028, according to analyst Matt Phipps at William Blair.

Then, in a double-whammy for the company, it was forced to report a failure for its flagship cancer immunotherapy Opdivo (nivolumab) in first-line liver cancer, which William Blair had modelled as being worth $1bn in sales for the brand.

Add in the news that the Otezla divestment and other financial regulatory deliberations will extend the closure of the merger with Celgene by several months -potentially into next year – and it’s no surprise that shares in BMS fell almost 7.5% yesterday to close just slightly above its 52-week low.

The failure of Opdivo to show efficacy in first-line hepatocellular carcinoma (HCC) – the most common form of liver cancer – isn’t a complete surprise as this form of cancer has proved to be a tricky target for drug developers.

As it turned out, Opdivo failed to improve overall survival (OS) when compared to Bayer’s targeted cancer drug Nexavar (sorafenib) in the CheckMate-459 trial involving patients with previously-untreated HCC that wasn’t suitable for surgery.

There was a trend towards an improvement in OS that didn’t reach statistical significance, which BMS suggested at least raised hope that combination therapy including Opdivo could improve on Nexavar, a standard therapy for HCC that hasn’t been improved on for 10 years.

BMS’ arch-rival in the checkpoint inhibitor category, Merck & Co/MSD, recently reported data with its drug Keytruda (pembrolizumab) in second-line HCC, comparing the drug to best supportive care, but was also unable to achieve a significant improvement in survival, despite improving it numerically by 22%.

Opdivo is already approved for second-line HCC, and BMS could have done with a win in the first-line setting to ring-fence an indication where Opdivo could resist competition from Keytruda. Merck’s drug has caught and overtaken Opdivo largely because it has come to dominate the first-line non-small cell lung cancer (NSCLC) market – after Opdivo failed a late-stage trial in that setting.

The CheckMate-459 miss “adds increased importance to ongoing trials in first-line lung cancer, most notably CheckMate-9LA of Opdivo plus Yervoy [ipilimumab] and two cycles of chemotherapy, expected in early 2020, to provide renewed growth opportunities,” said Phipps in a research note.

BMS meanwhile isn’t giving up on HCC, and is running trials of Opdivo as a monotherapy in the adjuvant setting as well as in combination with Yervoy in previously-treated patients.

William Blair points to a number of upcoming trials in NSCLC, renal cell carcinoma and head and neck cancer which it says mean “the long-term growth opportunity is robust as movement into the adjuvant setting and next-generation combinations advance.”

Article by
Phil Taylor

25th June 2019

From: Sales

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