Bristol-Myers Squibb's Blockbuster Immunotherapy Opportunity

Bristol-Myers Squibb (NYSE: BMY  ) won more attention for its anti-PD1 cancer immunotherapy program over some recently published long term survival data. An editorial in the Journal of Clinical Oncology compared nivolumab with the company's commercially successful Yervoy. It looks like Bristol-Myers may have a real winner on its hands.

Losing the race
Sadly for Bristol-Myers, nivolumab probably won't be the first PD-1 drug approved for the advanced melanoma indication. Merck (NYSE: MRK  ) is driving MK-3475 at full throttle. R&D Chief Roger Perlmutter is back at Merck for reasons that caused him to leave for Amgen (NASDAQ: AMGN  ) more than a decade ago. One of them is an ability to race toward approval of top-priority drugs. Although Bristol-Myers has accumulated far more data for nivolumab, Merck has already started a rolling submission of MK-3475 for advanced melanoma that should be complete in the first half of this year.

Merck is also charging forward with a combination study of MK-3475 and Amgen's talimogene laherparepvec, or T-Vec. Amgen's interesting therapy is a virus designed to infect tumor cells specifically. Once inside, it causes tumor cells to signal the immune system while replicating itself until the cell eventually bursts.

Winning in the clinic
Bristol-Myers might finish second in the race to win approval for a PD-1 drug, but it definitely has the most clinical data. The recently released, long-term survival figures that has the research community excited come from 107 advanced melanoma patients in a phase 1 nivolumab trial that ended in 2012. Most of them received at least two previous therapies. Median OS was 16.8 months, with a one-year survival rate of 62%, and a two-year survival rate of 43%.

To put that in perspective, let's compare it to a trial with similar patients receiving gp100 vaccine alone, Yervoy, or both. Among patients receiving Yervoy, an estimated 21.6% to 23.5% of patients were alive at 24 months versus 13.7% of patients receiving gp100 alone. The presence of the experimental vaccine clouds the comparison a bit, but it looks like nivolumab's two-year survival rate is almost twice as high as Yervoy's.

Beyond survival
Nivolumab's advantage doesn't stop at survival data. The anti-PD-1 therapy appears much more easily tolerated. Both Yervoy and nivolumab prevent tumor cells from shutting down a local immune attack, but they act on different targets. It seems that Yervoy's inhibition of the anti-CTLA-4 pathway has an effect on healthy tissues as well as tumors.

A third advantage for nivolumab is the durability of its response. Although the trial ended in 2012, some patients began dosing years earlier. Investigators have data on patients going back more than four years, the longest for melanoma patients treated with an anti-PD-1 therapy. Many had tumors that remained the same size, or continued to shrink after treatment ended.

Typically, when advanced melanoma patients experience new tumors after a period of remission, the disease returns at full strength. When patients previously treated with nivolumab experienced new growths, they remained small. It seems that the immune system may continue to keep the disease under control even after therapy has ended.

Combination or cannibalization?
2013 was Yervoy's third year on the market. It reached $960 million, and it's still growing. Unfortunately, nivolumab is under development for the treatment of advanced melanoma, Yervoy's territory. If the more effective, and better tolerated PD-1 is approved as a solo therapy, we can expect it to cut heavily into Yervoy sales.

Of course this problem would be solved if regulators approved a Yervoy and nivolumab combination therapy for advanced melanoma or other cancers. In late January, Bristol-Myers gave some fairly cool remarks regarding late stage combination studies, and the stock sank more than 10% over the next several days. When the company announced it would begin late stage combo studies on March 4, all was forgiven and shares returned to a 12-month high.

Foolish final take
Merck and Bristol-Myers are likely to compete heavily for advanced melanoma patients in the near term. So far, both therapies look like they are effective beyond skin cancers. Going forward several years, there should be plenty of room in other indications. In the meantime, analysts on Wall Street will likely keep making a fuss over who's first to bring a PD-1 to market, and whether or not nivolumab will cannibalize Yervoy. A savvy investor might view these trivial concerns as opportunities to buy a stock with serious long-term potential.

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  • Report this Comment On March 07, 2014, at 10:08 AM, snickerdoodle9 wrote:

    Happy to have owned Bristol-Myers ( BMY ) ( won more attention for its anti-PD1 cancer immunotherapy program over some recently published long term survival data. An editorial in the Journal of Clinical Oncology compared nivolumab with the company's commercially successful Yervoy. It looks like Bristol-Myers may have a real winner on its hands.) for many months . High yield ( paying 4% and more ) dividend stocks are the main attraction to me , but also having a combo of growth/dividend payers is essential to being a part of a diversified portfolio .

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