Merck and Co. Shares Increase as Bristol’s Opdivo Lung Cancer Test Fails


    After the lung cancer trial for a treatment called Opdivo failed, the pharmaceutical company Bristol-Myers Squibb Co. stock dropped to lowest it had ever reached in over a decade. The trial was supposed to be the basis for expanding upon lung cancer treatment, had it been a success.

    At 12:03 PM this past Friday, the stock was down to around $63, which was a 16% registered decline. Keytruda was the main competitor of Opdiva, made by the rival company Merk and Co., whose shares saw a spike of 6.9% to $61.83, after an 8.2% rise, which was the highest it had seen since 2009.

    The failed test of Opdiva dealt a heavy blow to Bristol-Myers, which has literally attained this, level of satisfaction as it scurried upwards by doing its research and introducing immune-based cancer therapies. Lung cancer provided the best opportunity for such therapies which have affected less amount of patients. Opdivo’s successful trial could have proved to be a boon for the growth of lung cancer treatment, although it would not have been used as a first-line therapy. Unfortunately, however, Opdivo failed the test.

    In a note written by Evercore ISI analyst Mark Schoenebaum, he said that investors had great hopes attached with the Opdivo test, since they were hoping its success would be the start of a new era for cancer treatment. He was also utterly perplexed by the failure of the Opdivo test, claiming it to be the worst surprise in his clinical history he had ever seen.

    The results also displayed how the strategy of Bristol-Myers differed from that used by Merck. Bristol-Myers had designed the drug such a way that it was hoping to obtain a far larger market for Opdivo by including those patients who depicted lower levels of the key biomarker. On the other hand, Merck’s trial intended to have higher levels of biomarker and to make their drug at large in the market was not their main aim. Rather, they tested their drug on fewer patients and that is why they obtained more successful results.

    Before Friday, analysts’ estimates suggested that half of the company’s sales by 2020 would come from the immune therapies introduced by Birstol-Myers, like Opdivo. These sort of sales resulted in 46% increase in US revenue, while Opdivo’s 3-month sales also rose to $840 million, which is a significant increase. The total revenue from the sale of the drug has been estimated to rise to $7.7 billion from the value of $942 million last year.


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