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Would Pfizer, Roche or Novartis megamerge with BMS? Rumors say they're crunching numbers now
by Tracy Staton | Feb 15, 2017 10:53am
Would Bristol-Myers Squibb really become a Big Biopharma takeover target? It has plenty of 'solid products' to recommend it, and overseas cash might soon come back to the U.S. to fuel big deals, analysts say.
Last month, a couple of analysts addressed Bristol-Myers Squibb as a takeover target for some rival pharma giant. The gist? The combination of disappointments on its cancer blockbuster Opdivo plus a solid product line-up could well put a bullseye on the company—and its “very logical, very rational” management team wouldn’t dismiss offers out of hand.
Now, rumors are surfacing that Swiss-based drugmakers Roche and Novartis, leaders in the cancer field, and Pfizer are actively looking at a buyout. StreetInsider, which cited anonymous sources in reporting the talk, also said that Gilead Sciences—which, as executives recently admitted, needs some significant M&A to grow—might be considering the idea.
Meanwhile, a range of drugmakers, including Pfizer, could soon bring home overseas cash if U.S. tax reform cuts the government's take. Many billions, in fact.
Rumors are rumors, of course, and deal talk can swirl up with the slightest encouragement. The idea of Gilead digesting Bristol-Myers? Somewhat far-fetched. But as Barron’s pointed out Tuesday afternoon, Bristol-Myers shares took an upward turn on the news, meaning at least some investors aren’t dismissing the idea, either. The shares were up by 3% midday and closed at $53.71; they’re up past $54 Wednesday morning.
Bristol-Myers would be a big deal to swallow—its market cap currently stands at about $93.5 billion, according to Yahoo Finance—which means only a few companies could step up. Most drugmakers say they're not in the market for megamergers, including Roche and Novartis.
Pfizer, on the other hand, has shown an appetite for huge deals over the past few years, with its failed takeover of AstraZeneca and agreed-on Allergan buyout, which was scuttled by stricter rules on using tax inversions to move corporate domiciles overseas. Since then, Pfizer executives have talked up smaller deals, such as its $5.2 billion Anacor buyout, but haven’t totally and completely ruled out a “transformative” deal.
Plus, U.S. companies may find themselves flush with cash if President Donald Trump and the Republican Congress push through tax reforms that would allow them to bring home their overseas stashes without paying the current sizable tax penalties. The president has suggested cutting the repatriation tax to 10% during a temporary “holiday,” and pharma-watchers figure that holiday would trigger more M&A.
Pfizer is among the companies with the biggest chunks of change awaiting repatriation when and if the moment arrives. According to market estimates, the company has about $80 billion in overseas cash. Together with Johnson & Johnson, Merck & Co. and Eli Lilly, the Big Pharma cash pile rises to about $250 billion, according to Citizens for Tax Justice. Amgen has about $34 billion offshore, and Gilead has about $25 billion.
But would any of these companies really shell out what would be necessary to nab Bristol-Myers? Leerink Partners’ Seamus Fernandez wrote last month that the company’s assets could well be worth it. “[W]e believe Opdivo, Yervoy, and the burgeoning immuno-oncology pipeline at BMS is a high-value industry asset that cannot be ignored,” Fernandez wrote.
“If history teaches us anything in pharma,” he went on, “it is that companies suffering from short-term missteps or surprises but with great assets are more likely than not to become vulnerable M&A targets over time ... if there isn't either a reversal of fortune or a series of value-added pipeline surprises.”
And as Mark Schoenebaum of Evercore ISI Group reminded Barron’s Tuesday, he pointed out last week that the Bristol-Myers executive team isn’t the type to be “guided largely by emotions and pride” and would likely enter into merger talks if the proposals made sense.
“I think [they] would be … incredibly shrewd negotiators, they would want the highest price possible. But in my mind … ultimately the decision would be guided by the spreadsheet,” he wrote.
____________________________________________
http://www.fiercepharma.com/pharma/would-pfizer-roche-or-novartis-mega-merge-bms-rumors-say-they-re-crunching-numbers-now
BMY
I sorta lost track of it's February moves -- been trending higher pretty much each day. On my watch list, but easy to miss the accumulation of daily moves unless you focus. Now out of my reach as seems over-bought, but who knows. Pays to have patience doesn't it. Congratulations!
CORN
Chatter has legs:
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Bristol-Myers probably isn’t getting bought — but it’s not digging in, either
As you might have read on Twitter yesterday, a loosely sourced story claimed the world’s biggest drug makers are kicking the tires on Bristol-Myers Squibb, and it was apparently credible enough to move the stock up more than 3 percent.
These rumors come and go, and the thesis is usually the same: Bristol-Myers, among the smaller members of the Big Pharma club, is more likely to be bought than do the buying. Such reports are always wrong, right up until the second they’re right, so drawing broad conclusions in either direction is always foolish.
But! Here’s an interesting note, courtesy of EvercoreISI analyst Mark Schoenebaum: Bristol-Myers is not at all set up to fight off a takeover.
Unlike most publicly traded companies, Bristol-Myers doesn’t stagger its board seats, meaning all of its directors have to run for re-election each year. And it doesn’t have a poison pill plan, under which the company could dissuade an acquirer by diluting share value.
That means “they’re very shareholder friendly,” Schoenebaum said in an address to investors. “This is not a company that would need to be bullied into doing the right thing. This is a company that would do the right thing, period, if the opportunity existed.”
So there’s that.
_______________________________________________
http://us11.campaign-archive2.com/?u=f8609630ae206654824f897b6&id=b83e0c2898&e=13786b0e17
BMY
Tremendous quarter in terms of institutional buys. Now 33%
http://www.nasdaq.com/symbol/idra/institutional-holdings
IDRA
Could Gilead Really Buy Bristol-Myers Squibb?
Feb. 15, 2017 9:05 AM ET|1 comment| About: Gilead Sciences, Inc. (GILD), BMY
Jonathan Weber
Jonathan WeberFollow(3,312 followers)
StreetInsider suggests Gilead could purchase BMY.
Gilead is cash rich and profitable, BMY has a huge pipeline and growth in oncology.
Gilead should be able to finance such an acquisition thanks to huge cash flows.
Gilead (NASDAQ:GILD) has hit new multi year lows after the company reported its fourth quarter results and provided guidance for the current year that sees revenues and earnings coming in well below what analysts have been estimating for 2017. Since Gilead's HCV franchise is declining fast, the calls for one or more acquisitions have become even louder. On Tuesday StreetInsider reported that Gilead could acquire Bristol-Myers Squibb (NYSE:BMY), whose share price has fallen a lot over the last months as well. In this article I'll try to examine whether that is realistic and if it would be a positive for Gilead and its owners.
Gilead is trading 34% below its 52 week high, whereas Bristol-Myers Squibb is trading 30% below the one year high -- both have fallen significantly based on a negative outlook for one of the company's key franchises: HCV in Gilead's case, not so positive results for drug trials of Opdivo in certain lung cancers in BMY's case. This fall has made both companies a lot cheaper, and makes an acquisition of Bristol-Myers Squibb a lot more likely than it was half a year ago.
The rationale for an acquisition of Bristol-Myers by Gilead is rather simple and sounds convincing at first sight: Gilead is a cash rich, very profitable and cash flow heavy company with no growth in the foreseeable future that wants to get into oncology but which does not have very huge pipeline prospects or successful existing products in that area.
Bristol-Myers on the other hand is a lot less profitable, produces much lower cash flows and doesn't hold a lot of cash, but has a huge oncology pipeline (with 21 drug candidates being evaluated right now, in addition to a big immunology pipeline and R&D activities in other areas such as cardiovascular and fibrotic diseases) and is forecasted to experience significant growth in oncology as well as other areas in the next years.
Combining those two companies with their unique strengths and weaknesses could mean the creation of a company that is both profitable and cash flow heavy, and which has significant growth potential and a huge pipeline at the same time. Combining these two companies would create a biotech company with $50 billion in trailing revenues, which is around the same level as Pfizer (NYSE:PFE) and Novartis (NYSE:NVS), which have trailing revenues of $53 billion and $49 billion, respectively.
In order to combine Gilead and Bristol-Myers could either merge as equals to create one new company, which on one hand would be rather easy since both companies are almost exactly the same size (with market capitalizations of $89 billion and $87 billion, respectively), thus the owners of Gilead and Bristol-Myers would receive ownership of roughly half of the combined company, each, but on the other hand it would be complicated to sort things out regarding management, BOD, headquarters, etc.
The other possibility is that one buys the other, in this case Gilead would be the acquirer (since holding more cash and being more profitable), this is what the StreetInsider report suggests as well. Let's look at how this could play out:
Let's calculate with a takeover price of $100 billion, which represents a premium of roughly 15% over today's price for Bristol-Myers' shares. Gilead holds $32 billion in cash on its balance sheet, Bristol-Myers holds $6 billion in cash on its balance sheet -- the two companies combined thus hold $38 billion, of which $33 billion could be used to pay for Bristol-Myers' shares (when we assume that the combined company would want to hold $5 billion in liquidity in order to be able to run operations smoothly). This means that another $67 billion would have to be financed via debt for such a takeover to happen.
With its last bond sale in 2016 Gilead sold bonds maturing after 11 years at an interest rate of 2.95%, let's say the company would want to pay back the $67 billion in new debt over 10 years, and we can calculate with an interest rate of 3%. This means an initial interest rate expense of $2.0 billion in the first year.
In the last quarter the two companies generated a combined free cash flow of $5.2 billion, which would mean $20.8 billion annualized -- when we adjust that number significantly to account for much lower cash flows for Gilead going forward, a combined annual free cash flow of $15 billion seems realistic for the next few years. When we subtract the additional interest Gilead would have to pay, the repayment of the debt could look like this:
(chart omitted)
Gilead could thus repay the debt it would have to take on to acquire Bristol-Myers in just five years under these assumptions, but even when we are being more conservative and assume further declining free cash flows and ongoing dividend payments, the acquisition could be paid for in less than a decade:
(chart omitted)
When we calculate with free cash flows dropping by another half billion dollars every year and the dividend growing by 10% every year, Gilead would still be able to fully repay the $67 billion in additional debt in just over eight years. If the dividend would not be grown by 10% annually but instead be kept at the current level, the debt could be completely repaid in under eight years, even if free cash flows continue to drop.
We can summarize that Gilead should be able to finance such an acquisition, thus it is possible that Gilead does indeed buy Bristol-Myers, at least from a financial perspective. It is not especially likely though, since we know that Gilead's preference is to make acquisitions in the $1-$5 billion range -- Bristol-Myers would be a lot bigger and would be a lot less easy to stomach. I thus don't think it is something Gilead's management will be keen to do, but we will have to wait and see if the two companies will find together in the future.
Takeaway
A StreetInsider report states that Gilead could acquire Bristol-Myers Squibb, and it makes sense at first sight: Combining profitable and cash rich Gilead with BMY, which offers growth and a huge pipeline could create a biotech giant the size of Novartis and Pfizer.
It looks like Gilead could finance such an acquisition without many problems, even whilst continuing to pay rising dividends.
The biggest hurdle for such a deal is Gilead's management though, which is not very keen to make huge acquisitions. I thus believe that a takeover by Gilead is possible, but not very likely.
Author's note: If you enjoyed this article and would like to read more from me, you can hit the "Follow" button at the top of the page, right next to my name and icon, to get informed about new articles.
Disclosure: I am/we are long GILD.
____________________________________
http://seekingalpha.com/article/4046183-will-gilead-buy-bristol-myers-squibb?app=1&auth_param=udil:1ca8o0s:b96aef3eb53af6bb532622883324b4fc&uprof=46#alt2
Could Gilead Really Buy Bristol-Myers Squibb?
Feb. 15, 2017 9:05 AM ET|1 comment| About: Gilead Sciences, Inc. (GILD), BMY
Jonathan Weber
Jonathan WeberFollow(3,312 followers)
StreetInsider suggests Gilead could purchase BMY.
Gilead is cash rich and profitable, BMY has a huge pipeline and growth in oncology.
Gilead should be able to finance such an acquisition thanks to huge cash flows.
Gilead (NASDAQ:GILD) has hit new multi year lows after the company reported its fourth quarter results and provided guidance for the current year that sees revenues and earnings coming in well below what analysts have been estimating for 2017. Since Gilead's HCV franchise is declining fast, the calls for one or more acquisitions have become even louder. On Tuesday StreetInsider reported that Gilead could acquire Bristol-Myers Squibb (NYSE:BMY), whose share price has fallen a lot over the last months as well. In this article I'll try to examine whether that is realistic and if it would be a positive for Gilead and its owners.
Gilead is trading 34% below its 52 week high, whereas Bristol-Myers Squibb is trading 30% below the one year high -- both have fallen significantly based on a negative outlook for one of the company's key franchises: HCV in Gilead's case, not so positive results for drug trials of Opdivo in certain lung cancers in BMY's case. This fall has made both companies a lot cheaper, and makes an acquisition of Bristol-Myers Squibb a lot more likely than it was half a year ago.
The rationale for an acquisition of Bristol-Myers by Gilead is rather simple and sounds convincing at first sight: Gilead is a cash rich, very profitable and cash flow heavy company with no growth in the foreseeable future that wants to get into oncology but which does not have very huge pipeline prospects or successful existing products in that area.
Bristol-Myers on the other hand is a lot less profitable, produces much lower cash flows and doesn't hold a lot of cash, but has a huge oncology pipeline (with 21 drug candidates being evaluated right now, in addition to a big immunology pipeline and R&D activities in other areas such as cardiovascular and fibrotic diseases) and is forecasted to experience significant growth in oncology as well as other areas in the next years.
Combining those two companies with their unique strengths and weaknesses could mean the creation of a company that is both profitable and cash flow heavy, and which has significant growth potential and a huge pipeline at the same time. Combining these two companies would create a biotech company with $50 billion in trailing revenues, which is around the same level as Pfizer (NYSE:PFE) and Novartis (NYSE:NVS), which have trailing revenues of $53 billion and $49 billion, respectively.
In order to combine Gilead and Bristol-Myers could either merge as equals to create one new company, which on one hand would be rather easy since both companies are almost exactly the same size (with market capitalizations of $89 billion and $87 billion, respectively), thus the owners of Gilead and Bristol-Myers would receive ownership of roughly half of the combined company, each, but on the other hand it would be complicated to sort things out regarding management, BOD, headquarters, etc.
The other possibility is that one buys the other, in this case Gilead would be the acquirer (since holding more cash and being more profitable), this is what the StreetInsider report suggests as well. Let's look at how this could play out:
Let's calculate with a takeover price of $100 billion, which represents a premium of roughly 15% over today's price for Bristol-Myers' shares. Gilead holds $32 billion in cash on its balance sheet, Bristol-Myers holds $6 billion in cash on its balance sheet -- the two companies combined thus hold $38 billion, of which $33 billion could be used to pay for Bristol-Myers' shares (when we assume that the combined company would want to hold $5 billion in liquidity in order to be able to run operations smoothly). This means that another $67 billion would have to be financed via debt for such a takeover to happen.
With its last bond sale in 2016 Gilead sold bonds maturing after 11 years at an interest rate of 2.95%, let's say the company would want to pay back the $67 billion in new debt over 10 years, and we can calculate with an interest rate of 3%. This means an initial interest rate expense of $2.0 billion in the first year.
In the last quarter the two companies generated a combined free cash flow of $5.2 billion, which would mean $20.8 billion annualized -- when we adjust that number significantly to account for much lower cash flows for Gilead going forward, a combined annual free cash flow of $15 billion seems realistic for the next few years. When we subtract the additional interest Gilead would have to pay, the repayment of the debt could look like this:
(chart omitted)
Gilead could thus repay the debt it would have to take on to acquire Bristol-Myers in just five years under these assumptions, but even when we are being more conservative and assume further declining free cash flows and ongoing dividend payments, the acquisition could be paid for in less than a decade:
(chart omitted)
When we calculate with free cash flows dropping by another half billion dollars every year and the dividend growing by 10% every year, Gilead would still be able to fully repay the $67 billion in additional debt in just over eight years. If the dividend would not be grown by 10% annually but instead be kept at the current level, the debt could be completely repaid in under eight years, even if free cash flows continue to drop.
We can summarize that Gilead should be able to finance such an acquisition, thus it is possible that Gilead does indeed buy Bristol-Myers, at least from a financial perspective. It is not especially likely though, since we know that Gilead's preference is to make acquisitions in the $1-$5 billion range -- Bristol-Myers would be a lot bigger and would be a lot less easy to stomach. I thus don't think it is something Gilead's management will be keen to do, but we will have to wait and see if the two companies will find together in the future.
Takeaway
A StreetInsider report states that Gilead could acquire Bristol-Myers Squibb, and it makes sense at first sight: Combining profitable and cash rich Gilead with BMY, which offers growth and a huge pipeline could create a biotech giant the size of Novartis and Pfizer.
It looks like Gilead could finance such an acquisition without many problems, even whilst continuing to pay rising dividends.
The biggest hurdle for such a deal is Gilead's management though, which is not very keen to make huge acquisitions. I thus believe that a takeover by Gilead is possible, but not very likely.
Author's note: If you enjoyed this article and would like to read more from me, you can hit the "Follow" button at the top of the page, right next to my name and icon, to get informed about new articles.
Disclosure: I am/we are long GILD.
_____________________________________________
http://seekingalpha.com/article/4046183-will-gilead-buy-bristol-myers-squibb?app=1&auth_param=udil:1ca8o0s:b96aef3eb53af6bb532622883324b4fc&uprof=46#alt2
Baker Bros still on board. Percentage-wise one of their largest adds at 46% for the year:
IDRA 10,272,314 $ 15,408,000 0.15% 0.16% 37 3,258,299 46% 6.9571%
https://whalewisdom.com/filer/baker-bros-advisors-llc#/tabholdings_tab_link
IDRA
BMY, PFE… 05:43
Deutsche not seeing Pfizer buying Bristol-Myers at this time Following yesterday's speculation of a potential deal, Deutsche Bank analyst Gregg Gilbert said he would be surprised to see Pfizer (PFE) make a move on Bristol-Myers Squibb (BMY) at this stage. Such an acquisition "would represent a very large and concentrated opportunity/risk on immuno-oncology, an area fraught with near-term uncertainty," Gilbert told investors last night in a research note. He believes that if Pfizer were to use $90B for a deal, it would prefer to acquire a more diverse set of value drivers. The analyst keeps a Hold rating on Bristol and Buy rating on Pfizer. Bristol shares rose 3% yesterday to $53.71 amid speculation of a potential takeover. The conjecture had Roche (RHHBY), Novartis (NVS) and Pfizer potentially looking into a bid for Bristol.
Read more at:
http://thefly.com/landingPageNews.php?id=2505345
BMY
From SA:
_______________________________________
Bristol-Myers 'in play' - StreetInsider
Feb. 14, 2017 12:23 PM ET|By: Stephen Alpher, SA News Editor
Roche (OTCQX:RHHBY), Novartis (NYSE:NVS), and Pfizer (NYSE:PFE) are "thought to be kicking the tires," according to the report, which also cites Gilead (NASDAQ:GILD) as a potential buyer.
A deal could be worth as much as $72 per share.
BMY has popped 2% to $53.03.
__________________________________________
http://seekingalpha.com/news/3243260-bristol-myers-in-play-streetinsider
BMY
Take-over chatter causing a pop:
Bristol-Myers (BMY) Seen as Takeover Bait
February 14, 2017 11:59 AM EST Send to a Friend
Based on industry sources, Bristol-Myers Squibb (NYSE: BMY) is in play and at least three potential suitors could be eyeing ...
Suitors:
$PFE, Roche and $NVS as suitors
BMY
My take (I have no shares) is that following the Phase III failure announced January 4th < http://ih.advfn.com/p.php?pid=nmona&article=73542894 > they requested a meeting to help determine whether they should initiate another trial. They have requested a Type A meeting:
Quote:
__________________________________________________
These interactions are organized around three "types" of meetings:
Type A meetings, which are used to help "an otherwise stalled product development program proceed."
Type B meetings, which are routine meetings occurring at pre-defined endpoints between FDA and a sponsor. Meetings typically occur right after or right before the submission of clinical data or a new drug filing.
Type C meetings, which is a catch-all category for any meeting which falls outside of Types A or B.
New Guidance on How to Request and Conduct PDUFA Meetings
Under PDUFA—specifically PDUFA Reauthorization Performance Goals and Procedures—FDA is supposed to schedule these meetings within fairly strict timeframes to ensure that the development of a drug is not slowed down unnecessarily. When PDUFA was revised in 2012 under the Food and Drug Administration Safety and Innovation Act (FDASIA), FDA was also tasked with tightening these deadlines further.
For example, Type A meetings should be scheduled within 30 days of FDA receiving a meeting request. Type B meetings should be scheduled within 60 days of FDA's receipt of the meeting request, "except in the most unusual circumstances."
_________________________________________________-
- See more at: http://www.raps.org/Regulatory-Focus/News/2015/03/10/21689/Meeting-With-FDA-Heres-What-Regulators-do-and-Dont-Want-from-Drug-Companies/#sthash.5uTBVJtA.dpuf
They are basing it on data which they already had and the news today does not indicate anything new and in my mind nothing newsworthy other than they intend to spend more funds based on hopes. The pop in pps today will soon be lost.
Also, they have a ATM going so they are probably selling shares today. Because it gapped up this AM, probably by AEZS, I'd assume most everyone who bought after the opening are losing. Long-term holders of course are ahead for the day.
Dan Ward who has been spot on re: AEZS tweeted:
Daniel Ward ?@danwardbio 3h3 hours ago
More
$AEZS wants you to know they havent given up on ~$50mil peak sales AGHD drug w CRL in '14. While waiting for ZoptEC, please bid for ATM shrs
AEZS
I believe tomorrow is the last date for 13-F reports. New Baker Bros???
Blackrock and FMR have bought big:
Owner Name Date Shared Held Change (Shares) Change (%) Value (in 1,000s)
BAKER BROS. ADVISORS LP 09/30/2016 7,014,015 13,038 .19 11,222
VANGUARD GROUP INC 09/30/2016 3,841,194 262,863 7.35 6,146
BLACKROCK FUND ADVISORS 12/31/2016 3,292,962 842,226 34.37 5,269
NATIXIS 09/30/2016 3,148,916 0 0.00 5,038
JPMORGAN CHASE & CO 12/31/2016 2,966,625 (39,750) (1.32) 4,747
BLACKROCK INSTITUTIONAL TRUST COMPANY, N.A. 12/31/2016 2,555,909 88,192 3.57 4,089
FMR LLC 12/31/2016 2,511,700 2,487,900 10,453.36 4,019
BROADFIN CAPITAL, LLC 09/30/2016 2,427,745 (667,000) (21.55) 3,884
STATE STREET CORP 12/31/2016 1,553,323 162,173 11.66 2,485
Read more: http://www.nasdaq.com/symbol/idra/institutional-holdings#ixzz4YZdaqStL
IDRA
Aeterna Zentaris Announces Plans to Pursue FDA Registration of Macrilen™
By Business Wire, February 13, 2017, 07:30:00 AM EDT
CHARLESTON, S.C.--(BUSINESS WIRE)--
Aeterna Zentaris Inc. (NASDAQ:AEZS) (TSX: AEZ) (the "Company") today announced that, following a comprehensive review of data obtained from the confirmatory Phase 3 clinical trial of Macrilen™ (macimorelin)for the evaluation of growth hormone deficiency in adults ("AGHD"), using the insulin tolerance test (the "ITT") as a comparator, it concluded that Macrilen™ demonstrated performance supportive of achieving registration with the U.S. Food and Drug Administration (the "FDA"). The FDA has agreed to consider the Company's conclusions during a Type A meeting, which is currently being scheduled.
Following a comprehensive analysis of the data from the confirmatory trial, the Company concluded as follows:
Macrilen™ stimulates the pituitary gland to produce growth hormone more effectively than the ITT; in approximately 80% of all patients, measured growth hormone levels following the administration of Macrilen™ were equal to or higher than the growth hormone levels produced by the ITT;
The Macrilen™ test performed well in the study:
Sensitivity (87%) and specificity (96%) of the Macrilen™ test were satisfactory;
Data of the previous study (82% sensitivity, 92% specificity) could be reproduced;
The co-primary endpoint "negative agreement" with the ITT, which is considered as the more relevant endpoint, was met, demonstrating that the Macrilen™ test provides medical benefit;
The co-primary endpoint "positive agreement" with the ITT was not met;
In the repeatability part of the study, conducted upon request of the European Medicines Agency, Macrilen™ results proved to be highly reproducible:
94% reproducibility (32 out of 34 cases at the cut-off point defined in the study protocol);
Reproducibility of the ITT, which was not investigated in this study, appears worse than the Macrilen™ test as demonstrated by a high number of non-evaluable ITTs in the study;
Study results can be further optimized by modulation of the pre-defined cut-off point of 2.8 ng/mL:
Any cut-off point for Macrilen™ between 4.6 ng/mL and 8.6 ng/mL would have resulted in a positive study outcome in that both protocol-defined co-primary endpoints would have been met; and
The dose of Macrilen™ used in the study was adequate and appropriate.
Commenting on the Company's review of the data, Dr. Richard Sachse, the Company's Chief Scientific Officer, stated, "Macrilen™ stimulated the pituitary gland more powerfully than the ITT and demonstrated good specificity and sensitivity in this study, thus reproducing the results of our previous study. In our confirmatory study, we demonstrated that Macrilen™ achieves a high degree of correlation with the ITT, which could be further optimized when a higher cut-off point, such as the ITT cut-off point, is used for the Macrilen™ test. We believe that such an increased cut-off point would be justified by the more powerful stimulation of MacrilenTM as compared to the ITT. We look forward to having a discussion with the regulatory authorities regarding our conclusions and hope that they will concur with us. The ITT is inconvenient for patients and physicians and contraindicated in certain patients, such as patients with coronary heart disease or seizure disorder, requiring the patient to experience hypoglycemia to obtain a result. Patients and physicians need and deserve a better option than the ITT."
David A. Dodd, President and Chief Executive Officer of the Company stated, "We are delighted to report these successful and impressive results following a comprehensive analysis of the data from our confirmatory trial. We look forward to upcoming discussions with the FDA and, hopefully, to the subsequent registration and commercialization of Macrilen™ in the U.S., providing a much needed new option and alternative to the ITT."
About the Study
The confirmatory Phase 3 clinical study of Macrilen™, entitled Confirmatory validation of oral macimorelin as a growth hormone (GH) stimulation test (ST) for the diagnosis of adult growth hormone deficiency (AGHD) in comparison with the insulin tolerance test (ITT),was designed as a two-way crossover study with the ITT as the benchmark comparator and involved some 26 sites in the U.S. and Europe. The trial involved 157 subjects, of whom 140 completed two evaluable tests for AGHD using both Macrilen™ and the ITT. Thirty-four of the patients were evaluated using Macrilen™ a second time to measure the repeatability of the result obtained using Macrilen™ as the evaluation method. The study population consisted of 115 patients who were suspected of having AGHD as a result of the presence of one or more symptoms or risk factors. This segment of the population included a range of patients from those considered at low risk of having AGHD to those considered at high risk. The study population also included 25 healthy subjects, who had no risk of having AGHD. Under the study protocol, the evaluation of AGHD with Macrilen™ will be considered successful, if the lower bound of the two-sided 95% confidence interval (or lower bound of the one-sided 97.5% confidence interval) for the primary efficacy variables is 75% or higher for "percent negative agreement," and 70% or higher for the "percent positive agreement." Based on meetings with the FDA as well as the European Medicines Agency ("EMA") and subsequent written scientific advice, the Company believes that the study meets the FDA's and the EMA's study-design expectations allowing U.S. and European approval, if successful. Dr. Jose M. Garcia, MD, PhD, an Associate Professor of Medicine at the Puget Sound VA Hospital and the University of Washington in Seattle, was the principal investigator of the confirmatory Phase 3 clinical trial. More details about the trial are available at the following link: https://www.clinicaltrials.gov/ct2/show/NCT02558829?term=macimorelin&rank=1.
About MacrilenTM (macimorelin)
Macimorelin, a ghrelin agonist, is an orally-active small molecule that stimulates the secretion of growth hormone. Macimorelin has been granted orphan drug designation by the FDA for diagnosis of AGHD. The Company owns the worldwide rights to this patented compound and has significant patent protection left. The Company's U.S. composition of matter patent expires in 2022 and its U.S. utility patent runs through 2027. The Company proposes, subject to FDA approval, to market macimorelin under the tradename Macrilen™.
About AGHD
AGHD affects approximately 75,000 adults across the U.S., Canada and Europe. Growth hormone not only plays an important role in growth from childhood to adulthood, but also helps promote a hormonally-balanced health status. AGHD mostly results from damage to the pituitary gland. It is usually characterized by a reduction in bone mineral density, lean body mass, exercise capacity, and overall quality of life as well as an increase of cardiovascular risks.
About Aeterna Zentaris Inc.
Aeterna Zentaris is a specialty biopharmaceutical company engaged in developing and commercializing novel treatments in oncology, endocrinology and women's health. We are engaged in drug development activities and in the promotion of products for others. We recently completed Phase 3 studies of two internally developed compounds. The focus of our business development efforts is the acquisition of licenses to products that are relevant to our therapeutic areas of focus. We also intend to license out certain commercial rights of internally developed products to licensees in non-U.S. territories where such out-licensing would enable us to ensure development, registration and launch of our product candidates. Our goal is to become a growth-oriented specialty biopharmaceutical company by pursuing successful development and commercialization of our product portfolio, achieving successful commercial presence and growth, while consistently delivering value to our shareholders, employees and the medical providers and patients who will benefit from our products. For more information, visit www.aezsinc.com.
Forward-Looking Statements
This press release contains forward-looking statements made pursuant to the safe harbor provision of the U.S. Securities Litigation Reform Act of 1995, which reflect our current expectations regarding future events. Forward-looking statements may include, but are not limited to statements preceded by, followed by, or that include the words "expects," "believes," "intends," "anticipates," and similar terms that relate to future events, performance, or our results. Forward-looking statements involve known risks and uncertainties, many of which are discussed under the caption "Key Information - Risk Factors" in our most recent Annual Report on Form 20-F filed with the relevant Canadian securities regulatory authorities in lieu of an annual information form and with the U.S. Securities and Exchange Commission ("SEC"). Such statements include, but are not limited to, statements about the progress of our research, development and clinical trials and the timing of, and prospects for, regulatory approval and commercialization of our product candidates, the timing of expected results of our studies, anticipated results of these studies, statements about the status of our efforts to establish a commercial operation and to obtain the right to promote or sell products that we did not develop and estimates regarding our capital requirements and our needs for, and our ability to obtain, additional financing. Known and unknown risks and uncertainties could cause our actual results to differ materially from those in forward-looking statements. Such risks and uncertainties include, among others, the availability of funds and resources to pursue our research and development projects and clinical trials, the successful and timely completion of clinical studies, the risk that safety and efficacy data from any of our Phase 3 trials may not coincide with the data analyses from previously reported Phase 1 and/or Phase 2 clinical trials, the rejection or non-acceptance of any new drug application by one or more regulatory authorities and, more generally, uncertainties related to the regulatory process (including whether or not the regulatory authorities will accept the Company's conclusions regarding Macrilen™ following its comprehensive review of the Phase 3 study data described elsewhere in this presentation), the ability of the Company to efficiently commercialize one or more of its products or product candidates, the degree of market acceptance once our products are approved for commercialization, our ability to take advantage of business opportunities in the pharmaceutical industry, our ability to protect our intellectual property, and the potential of liability arising from shareholder lawsuits and general changes in economic conditions. Investors should consult the Company's quarterly and annual filings with the Canadian securities commissions and the SEC for additional information on risks and uncertainties. Given these uncertainties and risk factors, readers are cautioned not to place undue reliance on these forward-looking statements. We disclaim any obligation to update any such factors or to publicly announce any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments, unless required to do so by a governmental authority or applicable law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170213005054/en/
Source: Aeterna Zentaris Inc.
Read more: http://www.nasdaq.com/press-release/aeterna-zentaris-announces-plans-to-pursue-fda-registration-of-macrilen-20170213-00357#ixzz4YZL6yiPR
Bit surprised since I believe folks generally have a good opinion of John Carroll's accuracy. Endpoints trying to rush to publish first with their new platform? Anyway, your careful analysis is why you are "Dew"Diligence.
That aside, BMY has moved nicely the past seven days regardless of overall drug companies' performance. Technically almost every indicator positive and lots of room until it is overbought.
BMY
Sure has. Eyeing the $1.59 pivot you have on your chart and the $1.65 upper BB. They should be doable with several strong LABU/IBB days. My charting shows the SAR flipped today which I find very positive.
As far as you know the next announced catalyst is the ASCO-SITC presentation later this month? I keep having a nagging thought something this 8th or 9th, but must be confusing it with another stock.
IDRA
Impressive background, and apparently approved by the two BB board members:
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Idera Announces Appointment of Jonathan Yingling, Ph.D. as Senior Vice President of Early Development
By GlobeNewswire, February 06, 2017, 08:00:00 AM EDT
CAMBRIDGE, Mass. and EXTON, Pa., Feb. 06, 2017 (GLOBE NEWSWIRE) --
Idera Pharmaceuticals, Inc. (NASDAQ:IDRA), a clinical-stage biopharmaceutical company developing toll-like receptor and RNA therapeutics for patients with cancer and rare diseases, today announced the appointment of Jonathan Yingling, Ph.D. as Senior Vice President of Early Development. Dr. Yingling was most recently the Chief Scientific Officer of Bind Therapeutics, Inc., and had previously served as Vice President of Oncology Discovery and Translational Research at Bristol Myers Squibb and Company. In this newly created position, Dr. Yingling will lead and execute the early development strategy and programs necessary to validate further immune-oncology indications for IMO-2125 as well driving the overall third-generation antisense (3GA) platform technology strategy.
"As we have continued to evolve as an organization focused on delivering solutions to patients suffering from rare diseases and cancers, it's increasingly clear that Idera and its future can significantly benefit from Jonathan's expertise and track record of strategic direction and development of candidates from early research stage into clinical development," stated Vincent Milano, Idera's Chief Executive Officer. "A world of opportunity stands in front of us for both IMO-2125 and the 3GA platform and Jonathan has proven throughout his career a gift for identifying and driving those opportunities forward into successful commercial value drivers."
In addition to his tenures at Bind Therapeutics and Bristol Myers Squibb & Company, Dr. Yingling had spent over a decade leading significant oncology development activities as well as drug candidate identification and M&A activities at Eli Lilly and Company. Dr. Yingling received his Ph.D. from Duke University and his Bachelor of Science from the College of William and Mary.
"I am thrilled to be joining Idera at this pivotal time when drug candidates are beginning to demonstrate their promise in a clinical environment," stated Dr. Yingling. "Both IMO-2125 and the 3GA platform have tremendous expansion potential and I am thrilled to be here today to lead the strategic direction of those expansions."
Inducement Grant Under NASDAQ Listing Rule 5635(c)(4)
In connection with the hiring of Dr. Yingling, the Board of Directors of the Company approved the grant to Dr. Yingling of a stock option to purchase 275,000 shares of the Company's common stock. The option was granted as an inducement equity award outside the Company's 2013 Stock Incentive Plan and was made as an inducement material to Dr. Yingling's acceptance of employment with the company. The option will have an exercise price equal to the closing price of the Company's common stock on February 6, 2017. The option has a ten year term and vests over four years, with 25% of the original number of shares vesting on February 6, 2018 and an additional 6.25% of the original number of shares vesting at the end of each successive quarter thereafter, subject to Dr. Yingling's continued service with the Company through the applicable vesting dates.
About Idera Pharmaceuticals
Idera Pharmaceuticals is a clinical-stage biopharmaceutical company developing novel nucleic acid-based therapies for the treatment of certain cancers and rare diseases. Idera's proprietary technology involves designing synthetic oligonucleotide-based drug candidates to modulate the activity of specific TLRs. In addition to its TLR programs, Idera has used its proprietary knowledge to create a third generation antisense technology platform which inhibits the production of disease-associated proteins by targeting RNA. To learn more about Idera, visit www.iderapharma.com.
Investor and Media Contact
Robert Doody
VP, IR & Corporate Communications
617-679-5515 (office)
484-639-7235 (mobile)
rdoody@iderapharma.com
Source: Idera Pharmaceuticals, Inc.
Read more: http://www.nasdaq.com/press-release/idera-announces-appointment-of-jonathan-yingling-phd-as-senior-vice-president-of-early-development-20170206-00464#ixzz4XvB01WQy
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BMY
Bristol-Myers partner Innate concedes a PhII flop for I/O drug lirilumab in fighting AML
by john carroll
February 6, 2017 06:27 AM EST
Updated: 08:23 AM
Mondher Mahjoubi, Innate Pharma CEO
More than five years ago Bristol-Myers Squibb heralded a $465 million deal to partner with Innate Pharma on its natural killer cell cancer drug lirilumab. But today the French biotech was forced to concede that its lead drug was no better than a placebo in fighting acute myeloid leukemia as a monotherapy.
Carrying out plans to handle development through Phase II, Marseilles-based Innate execs said that lirilumab flunked a Phase II trial testing the drug as a single agent. There was no evidence that the drug was any better than placebo in spurring a leukemia-free outcome for patients in a maintenance setting.
Shares of Innate (Euronext Paris: IPH) dropped 14% on the news.
Investigators had already halted work on one of two doses — the 1 mg/kg q1month group — close to two years ago after the data safety monitoring board concluded that it wasn’t working to patients’ advantage. The final readout came on the 0.1 mg/kg q3months group.
The drug is an antibody designed to interfere with the interaction of killer-cell immunoglobulin-like receptors on NK cells with their ligands, hopefully spurring a more effective natural killer cell attack on cancer cells. Bristol-Myers saw that as a natural combination approach with Opdivo and the two companies launched six other studies for various combination approaches. Those combo trials will proceed.
This is the latest in a series of clinical setbacks for Bristol-Myers’ Opdivo, which has been pummeled by the swift advance of Merck’s Keytruda in frontline lung cancer. Checkpoint inhibitors have been put into dozens of combination studies as developers look for better results in fighting cancer.
Investigators recruited 150 patients for the study.
Pierre Dodion, Chief Medical Officer of Innate Pharma, said:
“Although we knew that this setting was challenging, we are disappointed by the results of the EffiKIR study and will investigate further to better understand the data in its entirety. However, Effikir is only one of seven studies currently investigating lirilumab. Lirilumab is tested in a broad and comprehensive combination program in multiple indications and we saw encouraging early efficacy signals of lirilumab in combination with nivolumab at the 2016 SITC meeting. We are looking forward to the next data sets as well as the next steps for the program in 2017.”
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https://endpts.com/bristol-myers-partner-innate-concedes-a-phii-flop-for-io-drug-lirilumab-in-fighting-aml/?utm_medium=email&utm_campaign=Monday%20%20Feb%206%202017&utm_content=Monday%20%20Feb%206%202017+CID_ccdf8b1631ec999dc209823d5340b64e&utm_source=ENDPOINTS%20emails&utm_term=Bristol-Myers%20partner%20Innate%20concedes%20a%20PhII%20flop%20for%20IO%20drug%20lirilumab%20in%20fighting%20AML
BMY
Bristol-Myers' Lirilumab Flunks Mid-Stage Study In Leukemia
Feb. 6, 2017 7:15 AM ET|About: Bristol-Myers Squibb C... (BMY)|By: Douglas W. House, SA News Editor
A Phase 2 clinical trial, EffiKIR, assessing Bristol-Myers Squibb's (NYSE:BMY) lirilumab as monotherapy for the maintenance treatment of elderly patients with acute myeloid leukemia (AML) in its first complete remission failed to achieve its primary endpoint of leukemia-free survival (LFS).
There were no significant differences in LFS or any other efficacy endpoints in either arm of the study between the test groups and placebo. One treatment arm, 1 mg/kg once per month, was discontinued in March 2015 based on the recommendation from the Data Safety Monitoring Board (DSMD). The data analysis in ongoing. Complete results will be presented at a future medical conference.
Bristol is investigating lirilumab in six studies in a range of solid tumors and blood cancers.
Lirilumab is a fully human monoclonal antibody that is designed to help the immune system attack tumors by acting as a checkpoint inhibitor by blocking the interaction between inhibitory receptors called KIR2DL-1, -2 and -3 and their ligands.
Bristol-Myers licensed lirilumab from Innate Pharma (OTCPK:IPHYF) in 2014.
BMY is up a fraction premarket.
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http://seekingalpha.com/news/3240687-bristol-myers-lirilumab-flunks-mid-stage-study-leukemia?app=1&uprof=46#email_link
BMY
Top Restaurant Stocks to Buy in 2017
Motley Fool
Well-run restaurants can deliver many years of supersized returns to investors. But in this highly competitive arena, today's winners can quickly become tomorrow's losers. That's why identifying the strongest companies -- those with long runways for growth and proven business models -- is vital. In this regard, read on to learn about two of the best restaurant stocks available in the market today.
Image source: Zoe's Kitchen.
Zoe's Kitchen (NYSE: ZOES) is a rapidly expanding chain of fast-casual restaurants. The company has doubled its store count over the last three years to more than 200 locations, and management believes Zoe's can double that number again by 2020. Yet at even those levels, Zoe's will be only about one quarter of the way toward fulfilling its long-term target of more than 1,600 locations in the U.S. alone.
Zoe's concept of serving "fresh, wholesome, Mediterranean-inspired dishes delivered with Southern hospitality" appears to be resonating well with restaurant-goers, as evidenced by its impressive streak of 27 consecutive quarters of positive same-store sales growth. Zoe's traditional cooking techniques (e.g., grilling rather than microwaving) and naturally flavored ingredients are proving popular with patrons -- something I expect will continue since it fits well within the trend toward healthier eating.
Looking ahead, falling unemployment, low gas prices, and potential tax cuts all bode well for the restaurant industry as a whole. Yet despite these near-term catalysts, Zoe's stock has taken some hits in recent months. Wall Street soured on the stock after a somewhat lackluster second-quarter report, and Zoe's shares inexplicably sold off again after its recent ICR XChange presentation. With the company's long-term growth story still intact -- and shares now about 20% cheaper then they were a year ago -- patient investors may wish to consider using the sell-off as an opportunity to nibble on some Zoe's Kitchen stock.
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ZOES
Nivolumab for Treatment of Urothelial Carcinoma
On February 2, 2017, the U.S. Food and Drug Administration granted accelerated approval to nivolumab (OPDIVO, Bristol-Myers Squibb Company) for treatment of patients with locally advanced or metastatic urothelial carcinoma who have disease progression during or following platinum-containing chemotherapy or have disease progression within 12 months of neoadjuvant or adjuvant treatment with a platinum-containing chemotherapy.
Approval was based on a single-arm study treating 270 patients with locally advanced or metastatic urothelial carcinoma who progressed during or following platinum-containing chemotherapy, or progressed within 12 months of neoadjuvant or adjuvant treatment with platinum-containing chemotherapy. Patients received nivolumab, 3 mg/kg every 2 weeks, until disease progression or unacceptable toxicity. Objective response rate, confirmed by an independent radiographic review committee using Response Evaluation Criteria in Solid Tumors 1.1, was 19.6% (53/270; 95% CI: 15.1, 24.9). Seven patients had complete responses and 46 had partial responses. Estimated median response duration was 10.3 months with responses ongoing at data cutoff.
The most common adverse reactions (reported in at least 20% of patients) were fatigue, musculoskeletal pain, nausea, and decreased appetite. Fourteen patients died from causes other than disease progression, including four patients who died from pneumonitis or cardiovascular failure attributed to nivolumab. Adverse reactions led to dose discontinuation in 17% of patients.
The recommended dose and schedule for nivolumab for the above indication is 240 mg intravenously every 2 weeks.
FDA granted this nivolumab application breakthrough therapy designation and priority review status. This application was approved approximately one month before the goal date. A description of FDA expedited programs is in the Guidance for Industry: Expedited Programs for Serious Conditions-Drugs and Biologics, available at:
http://www.fda.gov/downloads/drugs/guidancecomplianceregulatoryinformation/guidances/ucm358301.pdf.
Full prescribing information is available at: http://www.accessdata.fda.gov/drugsatfda_docs/label/2017/125554s024lbl.pdf
Healthcare professionals should report all serious adverse events suspected to be associated with the use of any medicine and device to FDA’s MedWatch Reporting System by completing a form online at http://www.fda.gov/medwatch/report.htm, by faxing (1-800-FDA-0178) or mailing the postage-paid address form provided online, or by telephone (1-800-FDA-1088).
BMY
Not actually if the chart figures are correct, but close enough to make the point. We need more Keytruda sales to bring in royalties. BMY made a can't lose deal on the patent settlement.
BMY
Reason for the insane volume and rise after-hours yesterday:
Analysts' Ratings History for Idera Pharmaceuticals (NASDAQ:IDRA)
Show:
Date Firm Action Rating Price Target Details
1/31/2017 Wedbush Initiated Coverage Outperform $6.00 View Rating Details
11/29/2016 Cowen and Company Reiterated Rating Outperform View Rating Details
10/7/2016 S&P Equity Research Boost Price Target $1.86 -> $2.10 View Rating Details
3/12/2016 Piper Jaffray Companies Reiterated Rating Buy View Rating Details
6/15/2015 J P Morgan Chase & Co Initiated Coverage Overweight $6.00
IDRA
Merck Makes Nice With Bristol-Myers Squibb
A major patent settlement between Merck & Co. and Bristol-Myers Squibb was one of last week's biggest healthcare stories.
Motley Fool Staff (the_motley_fool) Jan 31, 2017 at 9:08AM
After Bristol-Myers Squibb (NYSE:BMY) claimed Merck & Co.'s (NYSE:MRK) cancer-fighting Keytruda infringed upon patents protecting Opdivo, Merck & Co. has agreed to pay Bristol-Myers Squibb $625 million up-front, plus future royalties, in exchange for a non-exclusive license to Opdivo's intellectual property. Does this deal make Bristol-Myers Squibb shares a buy?
In this clip from The Motley Fool's Industry Focus: Healthcare podcast, analyst Kristine Harjes sits down with Todd Campbell to discuss what was behind the deal, and how big the royalty payments may be.
A full transcript follows the video.
(VIDEO OMITTED)
This podcast was recorded on Jan. 25, 2017.
Kristine Harjes: Let's kick it off with Merck, and also Bristol-Myers.
Todd Campbell: Some very interesting news here this week, Kristine. Wouldn't you like to be able to add nine figures in revenue with just the stroke of a pen?
Harjes: Yeah, that would be nice. My bank account would love it.
Campbell: That's essentially what's happened here with Bristol-Myers and Merck. Essentially, these two companies have settled a patent dispute, Bristol-Myers coming out on top. Merck has now agreed to give them a pile of money up front to make up for royalties that they hadn't been paying for infringing on the patent. And, according to the settlement, Merck is going to give Bristol-Myers a healthy 6.5% dividend from here until 2023, and then another 2.5% from 2024 to 2026.
Harjes: And that's specifically on one drug named Opdivo and Keytruda.
Campbell: Yes. Both these drugs work in the same way, they target a protein called the PD-1, which is expressed on T-cells, in which cancer cells sneakily use to evade the immune system's detection.
Harjes: Right. This is a completely novel way of treating cancer, which is why you have Bristol-Myers saying here, "Hey, wait, you have infringed upon the patent that we have." So this will effectually end all of the patent infringement litigation against Merck's Keytruda, and as you mentioned, Bristol will get a whole pile of money to make up for the past, and then they'll get royalties going forwards. The payments will actually be split 75% to Bristol-Myers and 25% to a company called Ono Pharmaceutical, it's a Japanese partner on the drug. This is still a very hefty sum for Bristol-Myers.
Campbell: Right. They're getting $625 million right up front. Merry Christmas; here's $625 million! Then, if you look at the potential market opportunity for these checkpoint inhibitors, these PD-1 drugs, it's tremendous, it's huge. These are billions and billions dollar drugs. Just out of the gate, assuming no additional growth on Keytruda, you'd be looking at right around $100 million in royalties stream heading toward Bristol.
Harjes: Right, so this is huge news. Most likely, the drug will continue to expand, making it even bigger and bigger news going forward. And that 6.5% royalty will last all the way through the end of 2023.
Campbell: Right. You just mentioned to the ability to expand. A lot of cancers use this PD-1 to escape detection. What they're finding is, as they do more and more trials in different types of cancer, that these drugs are very effective, very high response rates in patients. This was especially interesting, to see them come to this agreement, because in the last year or so, both drugs, Opdivo and Keytruda, they've diverged in what's happened in their clinical trials, with Merck having a lot of success and Bristol-Myers mostly, in my view, because of the way they designed their trials, having less success, especially in lung cancer.
Harjes: Right. This is something we have talked about on a previous episode of Industry Focus, so our long-time listeners will hopefully remember. It basically had to do, as you mentioned, with the trial design, where Opdivo failed its trail in which it was looking at pretty much all levels of PD-1 expression 5% or above as opposed to, when they did the Keytruda study, it was 50% PD-1 expression and above. Of course, it's a drug that works on PD-1, so if you're targeting patients that have a higher expression of it, you're tilting the odds in your favor.
Campbell: Yeah, it's almost like Merck went the safe route, and Bristol-Myers tried to jump the shark.
Harjes: Right, and it backfired.
Campbell: By going the safe route, Merck was able to nab an FDA approval for the use of Keytruda in the first line setting for high-expressing PDL patients. What's really interesting is that they also have recently filed for first line use of Keytruda plus chemotherapy in patients who don't express PD-1, after seeing some pretty solid trials. So, if Bristol-Myers had either designed the trials so that was only high-expressing patients initially, or had combined it with chemotherapy, who knows if Keytruda would have the advantage in lung cancer heading into 2017 versus Opdivo. Obviously, I think that probably made Bristol-Myers a bit more willing to agree to that royalty stream, because they looked at it and said, "Well, if we can't get the first line, and the first line could be worth up to $1 billion, at least maybe we can share in some of Keytruda's success."
Harjes: Absolutely. It is not a bad consolation prize.
Campbell: No, and it's all high-margin money. They're not actually producing anything, they already produced the IP for it.
Kristine Harjes has no position in any stocks mentioned. Todd Campbell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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http://www.fool.com/investing/2017/01/31/merck-makes-nice-with-bristol-myers-squibb.aspx?source=yahoo-2&utm_campaign=article&utm_medium=feed&utm_source=yahoo-2
BMY
Bristol-Myers Squibb (BMY) Q4 2016 Results - Earnings Call Transcript
Jan. 26, 2017 5:30 PM ET|1 comment| About: Bristol-Myers Squibb Company (BMY)
Q4 2016 Earnings Call
January 26, 2017 10:30 am ET
Executives
John E. Elicker - Bristol-Myers Squibb Co.
Giovanni Caforio - Bristol-Myers Squibb Co.
Charles A. Bancroft - Bristol-Myers Squibb Co.
Francis M. Cuss - Bristol-Myers Squibb Co.
Murdo Gordon - Bristol-Myers Squibb Co.
Analysts
Gregg Gilbert - Deutsche Bank Securities, Inc.
Christopher Schott - JPMorgan Securities LLC
Jami Rubin - Goldman Sachs & Co.
Marc Goodman - UBS Securities LLC
Jeffrey Holford - Jefferies LLC
Timothy Minton Anderson - Sanford C. Bernstein & Co. LLC
Seamus Fernandez - Leerink Partners LLC
Andrew S. Baum - Citigroup Global Markets Ltd.
Geoff Meacham - Barclays Capital, Inc.
Vamil K. Divan - Credit Suisse Securities (NYSE:USA) LLC
Steve Scala - Cowen & Co. LLC
Mark J. Schoenebaum - Evercore ISI
Operator
Good morning. My name is Christine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bristol-Myers Squibb 2016 fourth quarter results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.
Thank you. John Elicker, you may begin your conference.
John E. Elicker - Bristol-Myers Squibb Co.
Thanks, Christine, and good morning, everybody. Thanks for joining the call this morning. With me I have: Giovanni Caforio, our Chief Executive Officer: Charlie Bancroft, our Chief Financial Officer; Murdo Gordon, our Chief Commercial Officer; and Francis Cuss, our Chief Scientific Officer. Giovanni and Charlie will have prepared remarks, and obviously Murdo and Francis will be available for questions.
I'll take care of the Safe Harbor language first before I turn it over to Giovanni. During this call, we'll make statements about the company's future plans and prospects that constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's SEC filings. These forward-looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future date. We specifically disclaim any obligation to update forward-looking statements even if our estimates change.
We'll also focus our comments during the call on our non-GAAP financial measures, which are adjusted to exclude certain specified items. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available on our website.
Giovanni?
Giovanni Caforio - Bristol-Myers Squibb Co.
Thank you, John, and good morning, everyone.
2016 was a year of strong operational performance for the company with 17% growth in sales and 41% growth in non-GAAP earnings. While I will provide some comments on 2016 and my thoughts on 2017, Charlie will go into more detail.
Knowing that last week's regulatory update is on your minds, I will start by providing my perspective on our lung cancer program. Before I do that, I must state again that for strategic reasons, for competitive reasons, and in order to protect the integrity of ongoing studies, we are not able to provide specific details beyond last week's short statement.
Here is what I can say about our lung cancer program. We have a broad front-line lung cancer program which we expanded and strengthened over the last several months. We have four combination front-line lung studies that are ongoing. These studies are designed with the optionality we build into all of our studies. We are committed to the development of the combination of Yervoy plus Opdivo.
As you know, the competitive landscape in this space has changed over the last 9 to 12 months, and it could very well change again based on future data readouts. We believe through our broad development program we have an opportunity to play a meaningful role in the treatment of patients in the first-line lung cancer setting. And with this in mind, our R&D team is focused and well-resourced in front-line lung and is constantly looking for ways to strengthen our program and bring forward new treatments.
Now, while the lung cancer opportunity is important to us, in 2017 we are focused on a broad set of priorities in oncology beyond lung cancer. Commercially for I-O, we continue to focus on three elements of our business: our international business; our non-lung business in the U.S.; and our lung business in the U.S.
With respect to our international business, our teams have done a great job with access and reimbursement. You've seen that in our full-year results. Specifically in the quarter, we completed price negotiations for France and Germany. Overall, I expect to see continued growth internationally in 2017.
Regarding our non-lung business in the U.S., 2016 was a great year in the U.S., driven by the combination regimen in melanoma and our very competitive position in renal cancer. For 2017, I expect to see continued growth for melanoma and renal as well as from our recently launched head-and-neck indication and the expected bladder approval.
And regarding the third element, our lung business in the U.S., in 2016 we did a great job establishing Opdivo. We know our second-line business will face increasing competitive pressure in 2017, and our teams are focused on defending our position. Murdo can talk more about our global commercial opportunities.
From an R&D perspective, in 2017 we expect to continue to advance our Opdivo program at the same time as we make progress on our next wave of I-O assets. With 11 clinical stage I-O molecules in the clinic, we have a broad program where we expect to see important early data readouts, including IDO, GITR, and LAG-3. I am excited to see how these progress. Francis can provide more details. Taken together, we are very proud of our innovation in immuno-oncology, and I remain convinced of our significant long-term opportunity in I-O.
Importantly, we announced last week the positive resolution of patent litigation with Merck for PD-1. It's important to note that the strength of our patents have been publicly acknowledged, and I continue to feel very positive about our PD-1 and our PD-L1 patent estate. Going forward, we will continue to protect our innovation and defend our IP.
I also want to comment on our 2017 priorities outside of oncology. We will build on the strength of the brands we've established with Eliquis and Orencia in the near term. Longer term, we are advancing our efforts to diversify our portfolio with new pipeline agents in heart failure, immuno-science and fibrosis. Later this year, we expect early data in house from assets in systemic lupus, NASH, and psoriasis. Francis may provide additional details on this progress.
In closing, let me say that I am proud of the strong performance we delivered in 2016 and excited about our prospects for 2017 and beyond.
Charlie will now provide additional comments on our 2016 performance and 2017 guidance.
Charles A. Bancroft - Bristol-Myers Squibb Co.
Thank you, Giovanni. Good morning, everyone.
As Giovanni mentioned, we delivered a very strong 2016. This was in spite of foreign exchange headwinds that negatively impacted non-GAAP EPS by $0.02 in the fourth quarter and $0.08 for the full year.
Let me start with some comments about Opdivo. We recorded $1.3 billion of worldwide revenue for Opdivo in the quarter, reflecting continued strong execution across our markets. The successful outcome of price negotiations in both France and Germany resulted in $373 million of revenue recognition in the quarter, inclusive of approximately $250 million deferred from previous quarters.
In the U.S., we did see demand growth, although at a slowing rate. Our sales of $715 million were roughly flat versus Q3, including the impact of a slight inventory work-down during the quarter. As we expected, the U.S. lung market has started to become more competitive, mainly due to the entry of Tecentriq in second-line. We continue to believe in the growth prospects of our non-lung business in the U.S. given our recent head-and-neck launch, potential bladder launch, our focus on increasing use of the regimen in BRAF-positive melanoma patients, and strong execution in RCC, where we've regained market share during fourth quarter.
Since we discussed 2017 expectations for Opdivo sales back in October, our outlook for the year has been affected by the potential earlier entry of the Keytruda/chemo combo. Taking this into account, we expect Opdivo to grow globally, driven by our international business. In the U.S., we expect Opdivo will be roughly flat with the potential to show growth, and we will focus on defending our second-line position and driving adoption in other indications.
For Yervoy, we saw steady demand in the U.S., though our sales were down slightly from Q3, mainly due to a reversal of inventory build, which I mentioned in October.
Increased demand during the quarter for Eliquis was the primary driver for growth in the U.S. Compared to Q4 of 2015, inventory was unfavorable by about $25 million, as stocking activity last year did not recur this year.
Turning to our virology business, as we had expected, we are seeing the accelerated decline in our hep C business due to competition from Epclusa. We have now stopped promotional activities for hep C in the U.S. and expect the decline to accelerate this year. Outside the U.S., sales have declined relative to prior quarters, as Epclusa continues to gain access across the European footprint. Going forward, the pace of decline internationally will depend on how quickly Epclusa gets reimbursed in each market.
At this point, I'll discuss some elements of our non-GAAP P&L, starting with gross margins, which as you know, is strongly influenced by product mix. Compared to the same time last year, we've seen downward pressure on our margins from the decline in our virology business and growth of Eliquis, partially offset by Opdivo. This will continue to be important for 2017, as I'll discuss a little later. MS&A was negatively impacted by a bad debt reserve for our HIV business in Latin America. In addition, we had increased investments in I-O and a higher pharmacy compared with last year.
Today, we're revising our 2017 EPS guidance and providing line item guidance. Since we initially provided EPS guidance back in October, our projections have been primarily affected by two factors: one, foreign exchange; and two, the potential for an earlier than expected entry of the Keytruda/chemo combo in May.
With respect to FX, as you know, the U.S. dollar has strengthened since the election against most currencies, including the euro and yen, which represent our biggest exposures. Based on current FX rates, our 2017 EPS outlook has been negatively impacted by about $0.07 from the guidance we provided in October.
Regarding gross margin, similar to our trends in the fourth quarter, our 2017 guidance takes account of the continued declining contribution of virology and the growth of Eliquis, which is somewhat offset by Opdivo. And with respect to OpEx, as we've said, we expect to keep total operating expenses roughly flat through 2020 compared to 2016, but with an increase in R&D this year.
Included in our guidance is the impact from our recently announced IP settlement with Merck. This was assumed when we provided guidance in October, given the state of negotiations at that time. Our share of the royalties will be recorded in other income and our share of the upfront payment will be excluded from our non-GAAP results.
I did want to point out that we expect a decision on our appeal of a European ruling on our Sprycel composition of matter patent in early February. We've disclosed this previously in our quarterly filing. And although we feel confident in our legal position, I wanted to highlight given it's within a couple of weeks of this call.
I will finish on capital allocation. Our business development priorities have not changed. During the quarter, we executed several business development deals across our therapeutic areas of focus as well as translational medicine and biomarkers. As you know, we announced a $3 billion share repurchase in October and said that we had hoped to repurchase $200 million to $300 million per quarter. During the fourth quarter, we were unable to execute any repurchases because settlement negotiations regarding the IP litigation with Merck precluded us from doing so. Our plan going forward is consistent with our original intent of approximately $200 million to $300 million per quarter.
Now, we're happy to address your questions. John?
John E. Elicker - Bristol-Myers Squibb Co.
Thanks, Charlie.
Christine, I think we're ready to go to the Q&A. Just as a reminder, both Francis and Murdo are here for questions. I also understand that the sound quality – we may have had a hiccup in our sound quality during the call. I apologize for that. So if you missed anything or weren't sure, please go ahead and follow up with questions on that. Christine?
Question-and-Answer Session
Operator
Thank you. Your first question comes from the line of Gregg Gilbert from Deutsche Bank. Your line is open.
Gregg Gilbert - Deutsche Bank Securities, Inc.
Thanks, good morning, team. My first question is about Opdivo. Whatever the data was that you used to decide to not pursue the expedited pathway in front-line lung, could you tell us whether that data affects your views on the probability of success for CheckMate-227 in any way?
And for Giovanni, a bigger-picture M&A question: can you comment on the potential for large-scale M&A in either direction and diversify the company and just continue to comment on the prioritization of diversification as it relates to Bristol? Thanks.
Giovanni Caforio - Bristol-Myers Squibb Co.
Let me start, Gregg, good morning, by saying that with respect to business development in general and M&A, our focus is to continue to execute our strategy. As I've said many times, we look at deals that make sense scientifically, strategically, and financially. We are relatively agnostic to size. We have obviously executed a larger number of small science-driven deals. That's really a function primarily of the volume of those opportunities available in the market. But we always have looked at opportunities for later-stage assets and different types of opportunities, and that focus will continue.
With respect to your question on the lung cancer regulatory update, as we have mentioned, we are really not able to add data because of the rationale I described before, but I will let Francis comment on that.
Francis M. Cuss - Bristol-Myers Squibb Co.
Good morning, Gregg. We remain committed to investigating the role of the Opdivo/Yervoy combination in lung. Remember, we have the broadest first-line lung program in the industry. We're generating data as well as the I-O/I-O combination; I-O/chemo and an I-O/combo chemo combination. So while the competitive landscape continues to evolve, we believe our combinations will have a role to play in first-line lung.
John E. Elicker - Bristol-Myers Squibb Co.
Thanks, Gregg. Can we go to the next question, please?
Operator
Your next question comes from the line of Chris Schott from JPMorgan. Your line is open.
Christopher Schott - JPMorgan Securities LLC
Great, thanks very much for the questions. The first one is can you just elaborate a little bit on the Opdivo growth outlook for 2017? I guess your guidance assumes an approval of the Merck chemo combo. Just how do you see that potential approval impacting Opdivo? And how do you defend your lung franchise in the event of that approval and before you have data from CheckMate-227?
My second question was just a broader picture of how you're thinking about the role of chemo combo versus CTLA-4 combos at this point. If we look back at the data we've seen over the past year, has that changed your view in terms of the relative attractiveness of those two approaches, and are you seeing a larger role for chemo than you would have in the past? Thanks very much.
Murdo Gordon - Bristol-Myers Squibb Co.
Thanks, Chris. It's Murdo here. I'll address the first part of the question and then pass over to Francis for the second part.
When we think about our I-O business in general for 2017, we're really thinking about it in three components. We think about our U.S. lung business. We think about the rest of our business in the U.S., and then of course our international business. And as we think about 2017 for our U.S. lung business, we feel in second-line so far we've been able to defend, as expected. We're exiting 2016 at around a 40% share of overall second-line lung. And we are seeing the I-O class in general increase in its penetration of second-line lung. Mainly, most of our erosion in second-line has been attributable to the launch of Tecentriq in the fourth quarter.
Outside of lung, we're looking at very strong performance across our other approved tumor types as well as some continuing non-promoted sales, so good performance of the regimen in melanoma, good performance of Opdivo in RCC. Very early launch, but execution looks good in head-and-neck. And as I said, we're also getting some non-promoted sales in small-cell lung cancer and then miscellaneous other tumors.
We are assuming success for KEYNOTE-021 approval in the early May timeframe. And with that, we're primarily assuming that some of our ongoing first-line non-promoted sales for Opdivo in lung will go away, given that physicians will have another approved option for low and/or non-expressers in first-line. So that's an assumption we've made, and that clearly puts our lung business under some pressure going forward. But as I said, we remain confident in our Opdivo business in the U.S. because of our performance in the other tumor types and hopefully some other launches as we anticipate approval in bladder.
Outside of the U.S., as reimbursement has come online and as final price negotiations have occurred, we've seen really nice uptake, and I would say uptake curves consistent with what we've seen historically in the U.S. So both in France and in Germany, the Opdivo business is performing well in melanoma and in lung. In Germany, we see the emergence of our RCC uptake where you can get rapid adoption prior to final price negotiations. And as the rest of the markets outside of the U.S. come online with reimbursement, we expect to drive some pretty good growth there.
Giovanni Caforio - Bristol-Myers Squibb Co.
Chris, before Francis gives you more detail on the second part of your question, I'll just go back to some of the statements I made in my introductory remarks. First, we are committed to the development of the combination of Yervoy plus Opdivo. Second, we have a really broad program that is looking at different combination strategies that includes chemotherapy. And third, we clearly believe that our program due to its breadth provides a meaningful opportunity for us to play a meaningful role in first-line lung cancer going forward.
Francis M. Cuss - Bristol-Myers Squibb Co.
Chris, good morning. As we mentioned in the second half of last year after CheckMate-026, we already had a chemo combo arm in CheckMate-227. We added to that using CheckMate-227 essentially as a master protocol. We were able to ramp that up quickly. That's in all comers. I think our view is that, as Giovanni said, we have this broad program where we think there's going to be a lot of unmet need still in first-line lung, and we will be generating data in very different areas potentially, so that we will essentially have some combination with a role in first-line lung. In addition, as we've said before, after CheckMate-026 we are looking at the number of biomarkers that came out of our analysis in CheckMate-026, and we will be looking to publish some interesting data on that later this year.
Giovanni Caforio - Bristol-Myers Squibb Co.
I will also add to that our commitment to the combo of Opdivo and Yervoy. Obviously, we've had a lot of discussions in lung, but you are aware of the data in melanoma. We are quite excited about the prospects in renal and small-cell lung cancer, so it's a really broad program.
John E. Elicker - Bristol-Myers Squibb Co.
Thanks, Chris. Christine, can we go to the next question, please?
Operator
Thank you. Your next question comes from the line of Jami Rubin from Goldman Sachs. Your line is open.
Jami Rubin - Goldman Sachs & Co.
Thank you. I have two questions, and just please be patient with me because they're long and detailed. I guess the first question again is on Yervoy and nivo [nivolumab]. I'm just wondering. Given your cryptic answers to our questions, and the press release on Thursday night left more questions than they did answers, and obviously the stock wiped out a lot of value and the market I think is assuming worst case that you will have no place in lung, but if I'm reading your answers correctly, it sounds like you are less confident in I-O/I-O and maybe more confident in I-O/chemo, and you're basically saying you're committed. That doesn't help us, but you're committed. And it sounds like you're saying look, we'll get there some way, either I-O/I-O or I-O/chemo. Is that the right way to look at it? And then, Giovanni, I have a follow-up question for you. Thanks.
John E. Elicker - Bristol-Myers Squibb Co.
Jami, why don't you go ahead and ask it right away?
Jami Rubin - Goldman Sachs & Co.
Okay, all right. So listen, if I take a step back and look at what has happened to Bristol-Myers in the past year, you've gone from having the best oncology I-O franchise in the industry with a significant lead over your competitors to now handing that lead over to Merck and, in my view, squandering what was otherwise an extraordinary and enviable market position with now question marks over your position in lung. So again, a question to you, Giovanni, and I asked this of you a couple weeks ago at my conference. What is your plan to unlock shareholder value in light of the continued underperformance? Are we going to sit around and just wait for CheckMate-227 and hope for the best, or is there a plan to consider a major rethink to unlock value, like a Plan B?
And I just want to say that as a longtime supporter of your stock, we think Bristol has a remarkable and robust pipeline, but that has not translated into shareholder value creation. And just, Giovanni, what do we do about this? Do you just sit there and wait, or are there other plans in place, alternative strategies? Thanks.
Giovanni Caforio - Bristol-Myers Squibb Co.
Jami, thank you. Let me just answer your second question first. I believe it's a very important question. And let me start by acknowledging your concern. And so there are really four areas that I am focusing on to continue to drive shareholder value (25:12). And those four areas have continued to have our utmost focus and attention.
The first one is commercial execution. And we are very focused in continuing to drive very strong commercial execution. We have demonstrated our ability to do that in 2016. In 2017, as Murdo said, we see significant opportunities for our marketed immuno-oncology indications across the world, and I want to repeat what those elements of growth opportunity are. Outside of oncology, we are very pleased with what we are doing with Eliquis, which has been established as the leading AF [Atrial Fibrillation] brand globally. We are very pleased with our ability to drive performance with Orencia and Sprycel, but obviously we will continue to work really hard to make sure that the trends of those brands continue to be very strong.
The second area of focus for us is our first-line lung cancer program. And I do understand that it would be easier to be able to communicate more with respect to that program. But the reality is we do have four large ongoing Phase III programs, and they have (26:41) since late last year following the negative results of study CheckMate-026, both an option to explore the I-O/I-O combo, which we remain committed to, and alternative strategies, which include I-O/chemotherapy as well as the potential to actually use a short-term cycle of chemotherapy in addition to our I-O/I-O regimen. So that is one of our priorities. And as I said in my remarks, we do believe we have an opportunity to have a meaningful role to play in the future in lung cancer.
I think it is important to think about what is happening with the rest of our broad late-stage I-O program because we have a significant number of late-stage programs with registrational potential that can read over the next 12 to 24 months. I am focused on potential data in first-line renal cell and HCC. I am focused on data in small-cell lung cancer in both first and second-line, and all of those readouts are possible in the next 12 months.
The fourth priority that we have is to accelerate our pipeline, and a lot is happening there. We did start to see some data at the end of 2016. There clearly is the potential for a number of important data readouts that can lead to registrational programs. I'll mention liri [lirilumab], LAG-3, GITR, CFS1R, IDO in oncology; and outside of oncology a number of promising programs like CD28, TYK2, possibly BTK, two programs in fibrosis that we believe have potential to be really important for us. So we are very focused on continuing to drive shareholder value.
And as I said, we're focused on four areas that represent our plan. And as I told you, this is the utmost priority for me and for my management team. I think I've addressed in some way your question about the way we think about lung cancer, but Francis may want to add in this area as well.
Francis M. Cuss - Bristol-Myers Squibb Co.
Good morning, Jami. Let me emphasize that we do remain fully committed to investigating the role of Yervoy and Opdivo in combination in multiple tumors, including lung cancer. And just to reiterate, we have more than a dozen registration studies ongoing for the combination, which are going to read out over the next 12 to 36 months, all of them with optionality built in, as we have in all our Phase III studies.
In addition to what Giovanni mentioned around renal cell, there's also small cell, head-and-neck, gastric, MSI-high, and epicellular carcinoma, so a number of potential registration studies, and we're still fully committed to the additional benefit that we believe could attribute to the combination over Opdivo alone.
John E. Elicker - Bristol-Myers Squibb Co.
Christine, can we go to the next question, please?
Operator
Yes, your next question comes from the line of Marc Goodman from UBS. Your line is open.
Marc Goodman - UBS Securities LLC
Good morning. First on CheckMate-227, can you just clarify? In the past, you've talked about there are potential interim looks. I just want to make sure I understand. Is it a potential interim look, or are there more than one potential interim looks before the end of the calendar year?
Second question is can you give us a flavor for – in the fourth quarter for the U.S. sales of Opdivo, how much of it was lung?
And then third, also for the fourth quarter for Opdivo, can you give us a sense of how much was from Japan from the Ono revenues? Thanks.
Giovanni Caforio - Bristol-Myers Squibb Co.
Let me just start by just reiterating (31:13) that we have optionality built in (31:18 – 31:23). That is true for our entire lung cancer program as well. Murdo?
Murdo Gordon - Bristol-Myers Squibb Co.
Thank you. Marc, across the (31:30) business in the quarter in the U.S. (31:35 – 31:40) in the quarter.
John E. Elicker - Bristol-Myers Squibb Co.
Christine, can we go to the next question?
Operator
Your next question comes from the line of Jeff Holford from Jefferies. Your line is open.
Jeffrey Holford - Jefferies LLC
Hi, thanks for taking my questions. I've just got a few to fire at you. So given there was no change in the GAAP guidance but a change in the non-GAAP guidance, can we assume that essentially the upfront that came from Merck that was coming in 2017 is a wash on the impact of what you've written off potentially in the back half of the year from first-line lung? Is that the right way to think about it?
And then just another question on the first-line lung. What do you think? Can you give us any indication of what the level of first-line lung sales were in revenue terms in the U.S. in Q4?
And then just the other question, I wonder if you can just tell us a little bit about what the expected financial impact would be on Sprycel should things be worst-case scenario there for 2017. Thank you.
Charles A. Bancroft - Bristol-Myers Squibb Co.
(31:35 – 33:02) And the third part of your question regarding Sprycel sales in Europe in the fourth quarter, sales were around $100 million, and for the full year just short of $400 million for Sprycel. And depending, assuming worst case, as I mentioned, we feel very strongly about our IP position. But it really depends on the entry and timing of entry of what the impact could be.
Murdo Gordon - Bristol-Myers Squibb Co.
And on the question regarding first-line lung sales, what I can share is the percentage of (33:33) in first-line lung at the exit of 2016 (33:41 – 34:03) chemo, there could be upside in 2017 related to that assumption.
John E. Elicker - Bristol-Myers Squibb Co.
Christine, can we go to the next question, please?
Operator
Your next question comes from the line of Tim Anderson from Bernstein. Your line is open.
Timothy Minton Anderson - Sanford C. Bernstein & Co. LLC
Thank you, a few questions, and I just want to note that the last few answers you guys have given for the last few questions, at least for me, are not really audible. But let me go ahead and ask my questions. The first one is on the IDO space. Merck and Incyte now have five pivotals looking at an IDO combo. That Phase II data looks interesting based on what we see, comparable to CTLA-4 combo, potentially better safety. So while there's a lot of current attention by investors on CTLA-4 combo versus chemo combo, I'm wondering if IDO combo might be the next emerging threat. I know you have a platform here, but it's earlier.
Second question, you guys have a Phase III trial that looked at Yervoy monotherapy in lung. I think it's called CA184-104. I believe that completed about a year ago. Yet unless I've missed it, those results haven't been published or presented, and I'm wondering if you have a timeframe for when that will happen. I know the focus is on the combo, but I think it could still be interesting to see these results.
And last question, a quick one, can you confirm you have not yet done an efficacy interim look at CheckMate-227?
Francis M. Cuss - Bristol-Myers Squibb Co.
(35:34 – 36:18)
John E. Elicker - Bristol-Myers Squibb Co.
All right, hold on a second. Can we hold the calls right now? I'm getting a lot of texts that things are inaudible. Christine, we're going to seek another conference room. Can you put all calls on hold right now and see if we can't address this, please?
Operator
Yes. [Audio Break] (36:30 – 37:55) We apologize. We are experiencing technical difficulties. The call will resume momentarily. Thank you. [Audio Break] (38:00 – 38:38) Again, we apologize for the inconvenience. The call will resume momentarily. [Audio Break] (38:41 – 39:53) Your line is now live.
John E. Elicker - Bristol-Myers Squibb Co.
Okay, thank you, Christine, and to everybody, apologies for the technical difficulty. My understanding is that it's on the back end of the conference call company. We are not purposely trying to muffle our discussion. I think what might be most helpful is if we go back and take – maybe, Tim Anderson, we'll take your question. And to your point, we'll go back to a few, maybe to Marc Goodman, Christine, and then maybe Jeff Holford again, and then go from there. So, Tim, do you want to start over and try your question again?
Operator
Timothy Minton Anderson - Sanford C. Bernstein & Co. LLC
This is Tim.
John E. Elicker - Bristol-Myers Squibb Co.
Go ahead, Tim. We hear you.
Timothy Minton Anderson - Sanford C. Bernstein & Co. LLC
Okay, I'm hoping you can talk about the IDO space given the fact that Merck and Incyte have five pivotal trials now looking at an IDO combo, and the early data on IDO combo looks interesting. So as I was mentioning before, there's a lot of attention on CTLA-4 combo versus chemo combo, and I'm wondering if the IDO combo might be the next emerging threat. And I know you guys have a platform here but it's earlier.
Second question was on the Phase III Yervoy monotherapy trial in lung cancer that finished about a year ago called CA184-104. Unless I've missed it, those results still haven't been presented or published, and I'm wondering when we might be able to see those. And then last question was can you confirm you haven't yet done any interim efficacy looks at CheckMate-227?
Francis M. Cuss - Bristol-Myers Squibb Co.
Good morning again, Tim, I apologize again for the fact that you couldn't hear us. Let me say that IDO is indeed an interesting mechanism from our perspective, which is, of course, why we bought Flexus in 2015. We will be presenting data, the PK/PD safety data on the Flexus IDO at the AACR [American Association for Cancer Research] in April. And depending on the data, the clinical data that we hope to present later in the year, we would hope, if it's good data, to move the mechanism into registration and combination studies with nivo in several tumor types. I will note, in addition, through our collaboration within Incyte, our studies of nivo with Incyte's IDO have been going well.
As far as the Yervoy study in lung, I believe it was presented. I don't think there's any particular reason we have held it back. And we can obviously get back to you and let you know specifically, but I don't have the details at hand.
And then coming back to the request about more data, I just wanted to emphasize, and you may not have been able to hear Giovanni earlier. The update we gave you was essentially a regulatory update, and we have a number of studies ongoing. Again, we're totally committed to our first-line lung studies. It's a broad program. And in order to protect the integrity of the studies, I just can't provide any additional details at this time.
John E. Elicker - Bristol-Myers Squibb Co.
So, Christine, if I could, I think I'm going to go back and try to summarize what some of the questions were and we're going to go back and answer them here. So first, Giovanni, maybe you could answer – Jami asked a question about shareholder value and what we're focused on, if you could address that.
Giovanni Caforio - Bristol-Myers Squibb Co.
Jami, I apologize you couldn't hear us. So I acknowledge your concern and what you articulated in your question. I just want to articulate the way we think about continuing to drive shareholder value and what my focus and my team's focus is. And we are really focused on four areas.
What I mentioned earlier is the first one is commercial execution. There, we have had a very strong 2016 across the board, whether you look at the U.S. or international and our various businesses. And we are absolutely focused on continuing to drive execution and commercial performance in areas where we see significant opportunity for growth. That is clearly Eliquis. That is clearly Orencia. As Murdo mentioned, it's our ex-U.S. immuno-oncology business. It is our U.S. business outside of lung. And then in lung, obviously it is our priority to defend our second-line business. But commercial execution remains obviously a key lever and a very high and important priority for us.
The second priority is our first-line lung cancer program. We did have a setback last year. At this point, we have a broad program with four ongoing registrational studies. They include Opdivo and Yervoy. And as you mentioned, we do remain committed to those. And they do include a number of other modalities. It is a very large program, and we are very focused on executing that program. As I did mention in my remarks, we believe we do have an opportunity to play a meaningful role in this space in the future.
The third one is the rest of what is a very broad late-stage I-O program. And outside of lung, there is a significant number of registrational programs that will read over the next 12 to 24 months. I did mention as examples of programs I'm focusing on, our first-line renal, our first-line HCC program, the first and second-line programs that we have in small-cell lung cancer, and Francis did add a number of other potential data readouts, and I'll ask him to do that again.
The fourth priority is the acceleration of our pipeline, and there we are working and as a priority advancing a number of really important programs with potential data readouts that can lead if positive to the beginning of registrational programs. In oncology, I did mention liri. I mentioned LAG-3, GITR, CFS1R, IDO. And outside of oncology, where in immunoscience we are accelerating CD28, TYK2, possibility BTK, and a number of programs in fibrosis that are also very promising.
So we are focused on continuing to drive shareholder value. There are significant potential opportunities in the company. There is a focus on lung cancer, but it goes well beyond lung cancer. And it's clearly our priority.
John E. Elicker - Bristol-Myers Squibb Co.
Thanks, Giovanni. There was also – Jeff Holford asked a question of Charlie about the upfront payment from Merck and the accounting treatment on that. Charlie?
Charles A. Bancroft - Bristol-Myers Squibb Co.
Jeff, once again, so between our GAAP and non-GAAP results, it's only specified items, so ongoing operations go through both. The difference and the reason that we changed our non-GAAP results was, as I mentioned in my comments, related to foreign exchange and the potential launch of the Keytruda/chemo combo in May. The reason we didn't change our GAAP guidance was the composition of the upfront payment related to our settlement with Merck.
John E. Elicker - Bristol-Myers Squibb Co.
Great. And, Murdo, there were several questions about the commercial dynamics for I-O in lung and Opdivo.
Murdo Gordon - Bristol-Myers Squibb Co.
Sure. Thanks, John. I'll try and cover the overall expectation and then insert some of the specific answers to questions that were also asked. So when we think about our I-O business for 2017, we're really thinking about it in terms of three components. We think about our U.S. lung business, our U.S. business beyond lung, and then our worldwide business.
In the U.S., clearly we're very focused on defending our second-line position. We exited 2016 at roughly a 40% share of second-line lung, which was in line with our expectations. We gave up about 10 points of market share with the launch of Tecentriq, so that was really the pressure that we were under there. However, we continue to feel with competitive share of voice, with strong execution, and a strong profile in second-line that we'll be able to defend that business going forward.
We've taken a balanced view of the rest of lung in that we have assumed the approval of KEYNOTE-021 at the PDUFA action date of early May. And if that timing changes or the adoption of that modality of treatment is different from our assumption, there could be upside to our forecast for lung in the U.S. However, we feel we've taken a very balanced view there.
If we go outside of lung in the U.S., we continue to see really strong momentum for Opdivo across all the approved indications, and we're preparing obviously for a potential launch in bladder as well. The combination regimen of Opdivo and Yervoy is performing well and has maintained its position as the leading treatment of choice in first-line metastatic melanoma with over a 30% share. We've gained or regained share in second-line renal cell carcinoma, and we continue to see very strong execution in the early phase of our head-and-neck second-line launch as well.
We're also seeing continued off-label usage of Opdivo in areas where NCCN [National Comprehensive Cancer Network] listings have provided a pathway to reimbursement like small-cell lung cancer. So overall in the U.S., we continue to see a robust Opdivo business. We are projecting that to be relatively flat but some upside opportunities exist.
When we go outside of the U.S., where we've secured reimbursement now, and you've seen that recognition of our deferred revenues in the fourth quarter, our Opdivo performance where we have reimbursement has been very good. And the uptake curves look similar to what we've seen historically in the U.S. So we have seen in France and Germany in our melanoma and our lung uptake very, very robust trends. And in Germany, we have the early emergence now of our RCC trend, given that you can promote and see sales prior to full-price negotiations in Germany. We're also working to accelerate all the other reimbursement decisions around all the other markets ex-U.S. So overall, the international business will contribute very good growth in 2017 to our overall business.
I did get a couple of specific questions. One was what was our percentage of our business in the U.S. that was lung? For the fourth quarter, that percentage is approximately 60%. And we were also asked specifically what our Japan sales were for Opdivo in the fourth quarter, and the answer to that was $51 million. I think I've covered most of the questions but happy to receive follow-ups.
John E. Elicker - Bristol-Myers Squibb Co.
So thanks and again, apologies, everybody, for the technical difficulties. Christine, we're not going to go backward. I think if there are topics that we missed, they'll likely come up in the next few questions again would be my guess. So if we can, just go to the next person on the list, Christine, for the next question, please.
Operator
Yes, thank you. Your next question comes from the line of Seamus Fernandez from Leerink. Your line is open.
Seamus Fernandez - Leerink Partners LLC
Thanks for the questions. So I guess just from a big-picture strategic perspective, Giovanni, if you can, just maybe take a look back for us at the different approaches that have been taken. Obviously, there have been some meaningful upfront decisions that you had to make with regard to commitments to specific mechanisms. Obviously, having CTLA-4 on board was a specific commitment.
But as I think about some of the strategic decisions and the differences between yourself and the decisions that you've made and the decision that Merck has made, when you study those and look at your own decision processes internally from an R&D perspective, how has the change in position caused your evaluation of the next leg of the I-O pipeline to change? Is it going to be more biomarker driven? What are the aspects that you think really need to occur here? Because the next leg of I-O development looks wildly inefficient, I think, to most of the investor community out there today.
And then the second question really is, as you watch some of those other indications that you pointed out, which would you highlight as the ones that specifically have the most potential commercially and where you believe that you could have a sustainable lead in the market? Thanks.
Giovanni Caforio - Bristol-Myers Squibb Co.
So, Seamus, thank you. These are very good questions. So I would start from saying that from the beginning, we have invested in a broad immuno-oncology program across multiple tumors and across multiple lines of therapy. In fact, that includes a distinct focus on the adjuvant setting and in the late-stage setting, both first and second-line and neo- adjuvant.
We have also from the beginning articulated a view that combinations will be required in order to make a meaningful difference for patients in oncology. And we have focused on the combination between Opdivo and Yervoy because we believe there is a strong scientific underpinning to that combination. We believe there is data that has emerged from multiple tumor types that proves the value of adding these two mechanisms of action. In fact, Francis many times recently has said that the understanding of that scientifically is continuing to advance.
And clearly we have continued to build an early pipeline, which enables us to broaden the combination strategies that we follow. You will remember that in fact as data has emerged, we have updated our strategy in first-line lung cancer. We have included combination studies with chemotherapy, but we are also looking at what short-course chemotherapy can do in potentially addressing the needs of rapidly progressing patients that can then continue on the regimen. My message there is that as the science evolves, we do not have a dogmatic approach, and we will continue to broaden our program in the ways that we think can add value for patients and advance programs.
We have done a lot of work following the negative outcome of study CheckMate-026 to understand the relevance of different biomarkers, not only PD-L1 expression but also others. We will publish that data. What we have learned is clearly informing the next stage of development decisions we are making. And obviously given the very rich early immuno-oncology pipeline in the company, we do believe that biomarkers will be important. Translational medicine's capabilities are essential. We have been working with leaders around the world for many years now through our immuno-oncology network. But we are significantly strengthening those capabilities at the same time because we do agree that they will be very important in enabling rapid progress for what is a really broad and deep immuno-oncology pipeline that we have.
I believe that one element that characterizes our strategy is that many of the targets we're working on are in-house. We believe that will give us flexibility over time versus relying exclusively on external collaborations, but we have never been not open. In fact, we've always been open to external collaborations as well.
And with respect to your question about potential, I am really focused on areas we know best like renal cell, where I think we have a meaningful opportunity globally and an ongoing late-stage Phase III program. I believe there is clear potential in small-cell lung cancer, where we've demonstrated very strong data. There is clearly significant potential in HCC, and I think that we are looking at areas where we can enter the market and then continue to generate meaningful data. But I do believe that we are well positioned as a company for a next wave of immuno-oncology innovation that is much more driven by translational medicine and biomarkers. And we have a lot of the right tools to continue to advance those combinations. But we are also very willing and able to partner externally to further broaden our reach.
John E. Elicker - Bristol-Myers Squibb Co.
Great. Thanks, Seamus. Can we go to the next question, please, Christine?
Operator
Your next question comes from the line of Andrew Baum from Citi. Your line is open.
Andrew S. Baum - Citigroup Global Markets Ltd.
Thank you, a few questions, please. One for Francis. Francis, can you confirm to us at our conference in December, you published (1:00:03 – 1:00:10) Could you just confirm that statement. Second, do you believe (1:00:14)
John E. Elicker - Bristol-Myers Squibb Co.
Hold on, Andrew. We're now getting a ton of interference on your line. I don't know, Christine, if you can do anything about that.
Operator
I do apologize, Andrew, if you want to requeue up for a question on another line.
Andrew S. Baum - Citigroup Global Markets Ltd.
My comment was on (1:00:35). Okay. I'm going to have to dial – can you hear me or not?
John E. Elicker - Bristol-Myers Squibb Co.
Try again. We heard the first part of your question was asking Francis if he can confirm that the data that we've seen that led to the decision last week was related to CheckMate-227. I think that was the first part of your question.
Andrew S. Baum - Citigroup Global Markets Ltd.
No, that wasn't the question. The question was: when you and Francis were at a conference in December, Francis confirmed to us that you needed CheckMate-227 to file. Given events since that date, I just want to ask you to confirm that statement.
Second, do you continue to believe that Opdivo/Yervoy is the standard of care for the majority of non-small-cell lung patients, which again came from that conference? And then finally, how quickly is the futility analysis done for CheckMate-227? I'm obviously thinking about the potential for discontinuation of certain arms. Did you get any of that?
John E. Elicker - Bristol-Myers Squibb Co.
Christine, we're going to have to let Andrew's line go off, but I think we heard your view of what Francis said at your conference related to CheckMate-227, needing CheckMate-227 data and you need comment on that. Second question was our view on Opdivo/Yervoy standard of care in front-line lung cancer. And the third related to futility analysis or I guess DMC review of CheckMate-227.
Francis M. Cuss - Bristol-Myers Squibb Co.
Andrew, good morning. So let me just go back and say two things. First of all, as Giovanni said, we have a broad first-line lung program now. I think I understand your desire to understand more data about what we've just said, but I'm actually not going to comment at all about additional details about the analysis, although of course CheckMate-227 is part of a registration plan of our broader portfolio.
As far as – all our Phase III studies I would say have DMCs, data monitoring committees. They conduct regular reviews. And to-date, they have not recommended to make any changes to any of our studies.
Murdo Gordon - Bristol-Myers Squibb Co.
Andrew, I'll take a stab at the question on whether or not we still believe that Opdivo plus Yervoy can address the majority of non-small-cell lung cancer. The first part of my answer is we'll need to wait to see the data mature. But as we see it, really only 25% of the market has been satisfied with the first approval of pembrol [pembrolizumab] in greater than 50% expressers, and we haven't seen a durable long-term data set yet with chemo combinations. So if we can deliver a long-term durable benefit with a regimen in first-line lung cancer, then there's a large addressable population that still has potential.
John E. Elicker - Bristol-Myers Squibb Co.
Christine, can we go to the next question, please?
Operator
Your next question comes from the line of Geoff Meacham from Barclays. Your line is open.
Geoff Meacham - Barclays Capital, Inc.
Good morning, guys. Thanks for taking the question. I know chemo combo is one of the components of CheckMate-227, but does the first-line approval of O21G (1:03:56) change how you guys think about the hurdle for clinical meaningfulness for CheckMate-227? And then I guess along the same lines for I-O/I-O combos, do you think the hurdle has now been raised to now include overall survival as a metric? Do you have to hit that to be competitive?
And then a commercial one, OUS will be a bigger component of Opdivo growth, obviously. But in the EU countries that have reimbursement, maybe you could go over the subtleties in the lung market in terms of patients' awareness. I'm just trying to think of what you can do from a defensive perspective in your European rollout. Thanks.
Murdo Gordon - Bristol-Myers Squibb Co.
So I can take the last part of the question. In Europe, where we've been successful so far, we've been very active in building awareness among the oncology community as well as patient communities. I'll use France as a particular example, where we were the first company to participate in the ATU Early Access Programs that the French government allows. We have in the neighborhood of 70% to 80% of the PD-1 market in France right now, after recognizing our revenues in the fourth quarter. And we continue to see shares of the PD-1 category across Europe in the neighborhood of 60% to 80% of PD-1 category. And in fact, we exited last year in the U.S. at 66% of PD-1.
So the uptake curves in Europe are very similar. There are some nuances. In Germany, there are different prescribing audiences that write for lung, and you have a community base of pulmonologists who are naive to immuno-oncology therapy. Similarly for urologists. So I would expect some tumor types to have slightly different shape curves on the basis of those unique groups of physicians that prescribe. But in general, the uptake curves have been very good, and I do think that the breadth of our indications continues to provide us some opportunity to defend in second-line lung going forward.
Francis M. Cuss - Bristol-Myers Squibb Co.
Geoff, I think while acknowledging that the competitive landscape does continue to evolve very quickly, I would just say that as far as our studies are concerned, we have a number of endpoints, including interim analyses, that will allow us, depending on where the regulatory bar gets raised, to play in this situation. I will just add that the FDA has been – we have a very good relation with the FDA, and certainly they've been very flexible across the board in terms of trying to understand the needs of patients and how to bring these drugs to patients as expeditiously as possible with robust data sets.
John E. Elicker - Bristol-Myers Squibb Co.
Can we go to the next question, Christine?
Operator
Your next question comes from the line of Vamil Divan from Credit Suisse. Your line is open.
Vamil K. Divan - Credit Suisse Securities (USA) LLC
Great, thanks so much for taking the questions. Hopefully you can hear me and I can hear your answers. So two quick ones if I could. One, I'm just curious on your confidence around KEYNOTE-021G. You mentioned that's part of what's driving the guidance change for 2017. Most of the lung cancer experts we spoke to actually don't think that should be approved on that data set in an accelerated manner, given it's a very small study and there was no real overall survival benefit seen. So I'm just curious why you seem very confident that that will be approved.
And then the second one, more just if we could shift to the expense side for a minute: you mentioned some of the drivers on the gross margin change that's expected in 2017. Can you maybe just quantify that a little bit more since there are several moving parts there? Maybe you can give us a little bit of a bridge to – it sounds like the improved growth of Eliquis, a little bit of growth with Opdivo, but then the decline in virology. If you could, just give us a sense of the impact of each of those. Thank you.
Giovanni Caforio - Bristol-Myers Squibb Co.
Thank you, Vamil. So this is Giovanni. Let me just say we have assumed based on the fact that the data was filed and accepted by the FDA and approval in May, as Murdo and Francis and Charlie mentioned, that is based in our assumptions. And as we've said before, should that not be the case, obviously we would see more favorable trends for our business in 2017. But I can only confirm that's the assumption we've made.
Charles A. Bancroft - Bristol-Myers Squibb Co.
Vamil, just on the gross margin, I think we've been relatively clear on this on how we think about the product mix, which is the primary driver, particularly in 2017 as we think about gross margin. Clearly, there are other elements like manufacturing variances and FX, but I will really just focus on product mix, which is the primary driver. Eliquis, because of our partnership agreement with Pfizer, we record that profit share in cost of goods, and that has a margin below 50%. So as the growth of Eliquis goes up, that has a significant drag. So Eliquis, as you know is doing particularly well.
As it relates to the virology business, both hep C and HIV, which is under a lot of competitive pressure, those are what I would characterize as very high-margin products. And so with the declining business there, that has again an impact on how we see our gross margin. And then Opdivo growth, which has a relatively good margin, helps offset some of that but not all of that.
John E. Elicker - Bristol-Myers Squibb Co.
Great, thanks. Christine, I think we have time for two more questions.
Operator
Thank you. Your next question comes from the line of Steve Scala from Cowen. Your line is open.
Steve Scala - Cowen & Co. LLC
Thank you so much. I have three short questions. First, ClinicalTrials.gov still states that the primary completion of CheckMate-227 is January of 2018. Is that still the likely date, even post-adjustments to the study? So that's the first question.
The second question is why didn't FX lower GAAP EPS guidance for 2017 as well?
And then lastly, I think it was in 2013, but Bristol lowered its tax rate presumably due to moving IP overseas. Should U.S. tax law changes indeed pass, what are the implications for your tax rate given the OUS IP? My recollection is that the benefit was 4 to 6 percentage points several years ago. So is that what's at risk? Thank you.
Francis M. Cuss - Bristol-Myers Squibb Co.
Good morning, Steve. So we have said in the past that the CheckMate-227 study expresser part of it would be completed in the beginning of 2018. Obviously, with the addition of additional arms, there will in time be changes to ClinicalTrials.gov to reflect that.
Charles A. Bancroft - Bristol-Myers Squibb Co.
Steve, just on FX, FX had an impact on our GAAP and non-GAAP guidance equally, as did the KEYNOTE-021 assumption that Giovanni just spoke about. It was really, as I mentioned earlier, the assumptions around the upfront payment related to the Merck settlement on PD-1 that evolved between when we originally gave our GAAP guidance and the GAAP guidance you see today. So I think that should be clear.
In regard to the tax rate and our IP and domiciling some of our international IP overseas, that has helped our tax rate. I will admit to that. As it relates to how that plays in tax reform, it's way too early for me to comment on how that could play out and how much color I can provide at this point because there are a lot of different elements that will play into that, not just IP, but the legal entity structure, supply chain transfer pricing, and where the actual tax rate ends up. So until we see more clarity on that, it's a little bit premature for me to comment.
Giovanni Caforio - Bristol-Myers Squibb Co.
Steve, let me just clarify because, obviously, CheckMate-227 is a large program with multiple studies embedded in it. Your question I believe was specifically related to the expressers. There we don't see meaningful changes with respect to Q1. There are areas of CheckMate-227 where we've made a number of changes that add a new study, as you know, and those timelines are different. But if your question was related to the expressers and the Q1, we do not see meaningful changes there.
John E. Elicker - Bristol-Myers Squibb Co.
Thanks, and, Christine, can we go to the last question, please?
Operator
Your last question comes from the line of Mark Schoenebaum from Evercore ISI. Your line is open.
Mark J. Schoenebaum - Evercore ISI
Hey, guys. Thanks for taking the question. Thanks to John and Charlie and your teams for all the support of my team while I was out, maybe one for Charlie. I know maybe a year ago roughly you had said something to the effect that around the end of the decade you thought you could achieve operating margins in the ZIP Code of companies like Biogen, maybe not quite that high. Could you just reiterate or revise that statement as you see fit?
And then for Francis, at least my interactions with you, Francis, and just correct me if I'm wrong on this, is that you've used the word confident in the past quite a bit about the Yervoy/Opdivo combinations in IL-1. And on this call unless I misheard, I've heard the word committed, and I'm just wondering. Are you still confident? It's a little nitpicky, but it might be interesting to some of us out here. Thanks so much.
Giovanni Caforio - Bristol-Myers Squibb Co.
Mark, before Charlie and Francis answer, welcome back.
Mark J. Schoenebaum - Evercore ISI
Thank you.
Charles A. Bancroft - Bristol-Myers Squibb Co.
Yes, welcome back, Mark. I did watch your most recent video. What we've said about operating expenses is that based on the transformation, which was not just about cost, it was about efficiency, effectiveness, and focus. But as it relates specifically to cost, it was really to keep our operating expenses in total roughly flat to 2016 levels. So I think that's where we're at as far as we think about operating expenses. And then the margin component of that, or the operating margin component of that, will be related to how sales then flow out through the rest of this decade.
Francis M. Cuss - Bristol-Myers Squibb Co.
So, Mark, just let me be and welcome back. Let me just say that we are across the Opdivo/Yervoy program, which I spoke earlier, I hope you heard it. We are confident of the role for Opdivo and Yervoy in a number of different tumors. So I think rather than parse for you, I think it's just important to reiterate that we've got more than a dozen registration studies, late indications but also early indications. And as Giovanni said, we'll be seeing readouts of that in renal cell probably midyear. So we remain committed and confident to the broad Opdivo/Yervoy program. Thanks.
Giovanni Caforio - Bristol-Myers Squibb Co.
Thank you, Francis, and thanks, everyone. I do again acknowledge the technical challenges here. I hope that we were able to answer many of your questions. And obviously, John and his team will be, as always, available.
So let me just close by saying we are very focused on executing in the three areas we discussed today. The first one is continuing to drive strong commercial performance for our business. We've discussed many of the dynamics in our business during this call. The second one is to continue to advance a very promising and broad set of late-stage potentially registrational programs. We gave you our perspective on the breadth and depth of the program in lung cancer but also everything else that we expect to happen in the next 12 to 24 months. And obviously, one important part is advancing an extraordinary and promising early pipeline across four areas. And we will be working through these priorities during the course of 2017.
As I said in my remarks, I remain confident in our significant long-term opportunity in immuno-oncology, and we will be looking forward to continuing to have dialogue with all of you as our programs continue to progress. Thank you.
Operator
This concludes today's conference call. You may now disconnect.
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BMY
China reminds Trump that supercomputing is a race
China to produce exascale prototype by year end
Patrick Thibodeau By Patrick Thibodeau | Follow
Senior Editor, Computerworld | JAN 19, 2017 1:41 PM PT
China intends to develop a prototype of an exascale supercomputer by the end of 2017, tweaking an exascale delivery date that's already well ahead of the U.S. The timing of the announcement, reported by an official government news service, raised the possibility it was a message to President-elect Donald Trump.
China's announcement comes the same week Trump takes office. The Trump administration is bringing a lot of uncertainty to supercomputing research, which is heavily dependent on government funding.
[ Further reading: The march toward exascale computers ]
"The exascale race is also a publicity and mindshare race," said Steve Conway, a high-performance computing analyst at IDC. "The Chinese are putting a stake in the ground and saying we're going to have a prototype computer soon, maybe a year or so sooner than people expected," he said.
The Hill reported Thursday that the Trump administration is planning deep cuts at the U.S. Department of Energy, which funds the development of the America's largest supercomputers.
This report, which didn't name sources, said the Trump administration was considering cutting advanced scientific computing research to 2008 levels, a position advocated by conservative think tank The Heritage Foundation.
China's exascale prototype update, a system previously expected in 2018, arrived at the same time a U.S. Senate committee held a confirmation hearing of Rick Perry, the former Texas governor and Trump's nominee for Secretary of Energy.
Perry once called for the elimination of the department, but at today's confirmation hearing he said he regretted that earlier statement.
"I am a major proponent of maintaining American leadership in the area of scientific inquiry," said Perry, in prepared remarks to the Senate Energy and Natural Resources Committee. "I support the academic and government mission of basic research, even when it will not yield benefits for a generation."
[To comment on this story, visit Reddit, where discussion has been lively.]
China is building a supercomputing program not only to advance its scientific research capabilities, but to help it develop an IT industry independent of U.S. technology. Its TaihuLight system was built entirely with Chinese-produced microprocessors.
"A complete computing system of the exascale supercomputer and its applications can only be expected in 2020, and will be 200 times more powerful than the country's first petaflop computer Tianhe-1, recognized as the world's fastest in 2010," said Zhang Ting, application engineer with the Tianjin-based National Supercomputer Center, according to the report in the China Daily.
China had previously set 2020 as its delivery date for an exascale system, so the prototype plan does not change the broader deadline.
TaihuLight, can reach a peak of just over 125 petaflops. A petaflop system can perform one quadrillion arithmetic operations per second. An exascale system is 1,000 petaflops.
"It's not exactly clear what an exascale supercomputer prototype means," said IDC's Conway. The size of it is unknown, but he expects it will be a system with the same architecture of an exascale system, but a smaller version of it.
The U.S. has set a 2023 timeframe for development of an exascale system that is fully capable of running applications. The U.S. plans to order the systems in 2019, but the Trump administration may have different goals. Japan, Europe and maybe even Russia are in the race to build exascale systems.
The Department of Energy develops and safeguards the nation's nuclear weapons. It uses supercomputers to conduct simulations of nuclear weapons. But these systems are also used heavily for basic research by academic and industry researchers throughout the U.S.
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http://www.computerworld.com/article/3159589/high-performance-computing/china-reminds-trump-that-supercomputing-is-a-race.html
CRAY
Sure hope they do. Thought that they might hint at it at the CC, but apparently they didn't. Guess we wait until early March to hear:
https://www.marketbeat.com/stocks/NYSE/BMY/
Hope they are buying today! BIG!
BMY
zach ?@zbiotech 2m2 minutes ago
More
$BMY will now resume share repurchase, were precluded from doing so in part of H2'16 due to settlement talks w $MRK
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BMY
Thanks for the info. You have no great concerns about Asian exposure which "seems" higher than most major drug companies both in terms of products and footprint?
BMY
A lot of interesting info, obviously, but one puzzle is the great discrepancy in tax rates:
"The effective tax rate was 17.3% in the quarter, compared to a benefit of 54.1% in the fourth quarter last year. Income taxes in both periods include net tax benefits attributed to specified items."
I see they are projecting ~ 20% so the 17.3% makes sense. The 54.1%?
My concern is their very high Asian exposure and Trump trade policies.
BMY
From seeking Alpha:
Bristol-Myers Q4 top line up 22%; non-GAAP earnings up 65%; Opdivo sales up 176%; lower earnings guidance pressures shares, down 2% premarket
Jan. 26, 2017 8:42 AM ET|About: Bristol-Myers Squibb C... (BMY)|By: Douglas W. House, SA News Editor
Bristol-Myers Squibb (NYSE:BMY) Q4 results ($M): Total Revenues: 5,243 (+22.3%); Product Sales: 4,814 (+24.7%).
Net Income: 894 (+553.8%); Non-GAAP Net Income: 1,064 (+64.5%); EPS: 0.53 (+541.7%); Non-GAAP EPS: (+65.8%).
Key Product Sales: Opdivo: 1,310 (+175.8%); Eliquis: 948 (+57.5%); Orencia: 625 (+15.7%); Sprycel: 494 (+15.2%); Hep C Franchise: 226 (-50.7%); Baraclude: 296 (-4.2%); Sustiva Franchise: 246 (-21.2%); Reyataz Franchise: 206 (-24.3%).
2017 Guidance: EPS: $2.47 - 2.67 (unch); Non-GAAP EPS: $2.70 - 2.90 form $2.85 - 3.05.
Shares are down 2% premarket on robust volume.
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http://seekingalpha.com/news/3237837-bristol-myers-q4-top-line-22-percent-non-gaap-earnings-65-percent-opdivo-sales-176-percent
BMY
Shorts:
Short Float 36.07%
http://finviz.com/quote.ashx?t=ZOES&ty=c&ta=1&p=d
ZOES
Maybe a $heff bump?
$heff Member Level Tuesday, 01/24/17 03:36:32 PM
Re: $heff post# 96075
Post #
96169
of 96169 Go
New Economy Portfolio Update..Alert..bought three stocks that are moving today and have a chance to go higher in the short-term.
Alert..bought $IDRA..$1.42..7% position as the company has key data that is going to be presented in Feb at the SITC-ASCO symposium for IMO-2125.
IDRA