Bristol Myers Squibb (BMY)

[chmcnfunds]

Goldman says Bristol-Myers' Opdivo/Yervoy in front-line lung cancer not dead yet; shares down 7% premarket

Jan. 20, 2017 7:55 AM ET|About: Bristol-Myers Squibb C... (BMY)|By: Douglas W. House, SA News Editor

Bristol-Myers Squibb (NYSE:BMY) is off 7% premarket on average volume in response to yesterday's announcement that it will not seek accelerated approval of the combination of Opdivo (nivolumab) and Yervoy (ipilimumab) for the first-line treatment of lung cancer [competitor Merck (NYSE:MRK) is up 4% premarket].

Goldman Sachs says Bristol's announcement doesn't necessarily mean the end of its effort to develop the combo for lung cancer. It says the company did not take an interim look at the data and the Data Monitoring Committee did not recommend to stop the trial (the company based its decision on a "review of currently available data").

Goldman believes the interim analysis will occur in later this year with a potential regulatory filing in Q4. Its valuation models assume the launch of the combo by 2018, with $1B in sales in first-line lung cancer by 2020 (with a 25% risk adjustment). It adds that Bristol's current price reflects no value for Opdivo in lung cancer and any weakness represents a buying opportunity.
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