Bristol-Myers Squibb (NYSE:BMY) investors might have been just a bit worried on Wednesday. After all, the U.S. Food and Drug Administration (FDA) had just placed a partial clinical hold on three clinical trials for Opdivo in combination with other drugs in treating multiple myeloma. Those worries melted away the next day, however.

On Thursday, Bristol-Myers Squibb (BMS) announced one of the best things that can happen with a late-stage study. The big drugmaker said the phase 3 CheckMate-214 study of Opdivo and Yervoy in treating renal cell carcinoma (RCC) was being stopped early. Why? The overall survival results were so positive, there was no reason to continue. 

For investors who had thought about throwing in the towel on BMS stock, the latest Opdivo news shows why that might not be a good idea. Here's why.

A scientist in a lab holds a dropper and test tube.

Image source: Getty Images.

More good than bad

When BMS reported top-line results from the CheckMate-214 study on Aug. 15, there was good news -- but there was also some bad news. The bad news was that the Opdivo/Yervoy combo didn't achieve statistically significant improvement in progression-free survival (PFS) compared with leading kidney cancer drug Sutent.

The latest update doesn't change that bad news. It did underscore, though, just how positive the good news from the study really was. BMS hasn't yet shared what the overall survival rate was for the combination of Opdivo and Yervoy, but the company stated that the combo achieved superior results over Sutent for intermediate- and poor-risk patients as well as for all randomized patients. 

It's also important to note that patients taking Opdivo and Yervoy achieved significantly higher objective response rates (the proportion of patients with tumor size reduction of a predefined amount and for a minimum time period) than patients taking Sutent did. The Opdivo/Yervoy combo also resulted in higher PFS rates than Sutent, but it wasn't quite enough to be statistically significant. 

Exelixis (NASDAQ:EXEL) still appears to be in the driver's seat in first-line treatment of RCC with its impressive phase 2 results for Cabometyx. The company recently completed its submission for the first-line indication to the FDA. However, BMS should still be a contender in the first-line market with the Opdivo/Yervoy combo. To put it in basketball terms, the company might not have gotten a slam dunk, but it should at least make a free throw or two.

The bigger picture

Perhaps the most important takeaway for investors from BMS's news about halting the phase 3 study early is just how important combination therapies will be in treating several types of cancer. It won't be a winner-take-all scenario in RCC or any of several other cancers.

For example, BMS and Exelixis are likely to compete against each other in RCC -- but they'll also possibly be partners as well. The two companies are collaborating on a late-stage study evaluating a combination of Opdivo and Cabometyx in treating RCC and a phase 1/2 study in treating liver cancer. 

Opdivo is also being paired up with Seattle Genetics' (NASDAQ:SGEN) Adcetris in a late-stage study targeting Hodgkin's disease. There's a phase 2 study in progress with Opdivo and Imbruvica in treating chronic lymphocytic leukemia and another for treating classical Hodgkin lymphoma. Celldex Therapeutics (NASDAQ:CLDX) is evaluating Opdivo combined with varlilumab in treating solid tumors. And that's just a few of the combination studies under way. 

Of course, the biggie is BMS's own much-anticipated CheckMate-227 study of Opdivo combined with chemotherapy in treating non-small-cell lung cancer. Results from that key study should be announced in a few months. 

What about those studies for multiple myeloma that the FDA placed on partial clinical hold? It's important to understand that the FDA didn't make the decision based on anything with Opdivo. Instead, the partial clinical hold was enacted because of issues in multiple myeloma trials involving Merck's (NYSE:MRK) Keytruda. Because both Opdivo and Keytruda are anti-PD-1 agents, the FDA took a cautious approach. 

Investing thesis

So why not sell Bristol-Myers Squibb stock? There's a good chance that Opdivo will succeed more than it fails in the remaining clinical studies. I wrote recently about the five cancer drugs that market research firm EvaluatePharma projects will be the biggest winners five years from now. Guess which drug ranked No. 2? If your answer contained six letters with an "O" at the beginning and end of the drug name, pat yourself on the back.

EvaluatePharma isn't the only optimist about Opdivo and BMS. The consensus among Wall Street analysts is that BMS will achieve faster growth over the next several years than quite a few of its peers, including Merck.

Bristol-Myers Squibb has a cash position and balance sheet strong enough to be in the hunt for smaller biotechs that could help it grow even more. One of the companies with which BMS is partnering on combo studies for Opdivo could be a potential acquisition target in the future. Along with the decent growth prospects, investors receive a solid dividend currently yielding north of 2.6% with room to grow.

I won't argue that BMS is the best stock on the market right now. There are certainly choices with even stronger growth prospects and even better dividends. But anyone who thought about selling the stock only because of earlier concerns about Opdivo are being short-sighted, in my view. Now isn't the time to throw in the towel on Bristol-Myers Squibb.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.