Bristol-Myers Squibb (BMY 0.48%) had a scintillating 2013, with shares delivering gains of more than 66%. This was considerably ahead of the S&P 500, which managed less than half those gains -- up 32% for the year.

The year 2014 has been slightly less dramatic for Bristol-Myers Squibb, with shares being up more than 5% year to date, ahead of the S&P 500's gains of 1.5%. I believe that the company has the potential to beat the index again this year due to potentially exciting developments surrounding one of its drugs. Indeed, this could act as a powerful catalyst through the rest of the year.

Nivolumab
The drug in question is nivolumab, a cancer immunotherapy that Bristol-Myers Squibb has arguably been a little slow in progressing to late-stage studies. A scientific research team from Dana-Farber Cancer Institute and Johns Hopkins has put together statistics regarding patients with melanoma who have taken nivolumab.

The results are impressive, and show that 62% of patients taking the drug were alive after one year, while 43% were still alive after two years. Furthermore, the durable response was also reflected in patients who had ceased taking the drug. The results compare impressively with the average life expectancy of the advanced melanoma patients in the Phase 1 trial, and highlight the potential benefits that nivolumab could deliver.

The competition
However, sector peer Merck (MRK 0.36%), is developing a competing drug to nivolumab and, unlike Bristol-Myers Squibb, is planning to finish a rolling submission to the FDA by the middle of 2014. In January, Merck announced a deal to partner with Pfizer, Amgen (AMGN -0.66%), and Incyte on the drug, called MK-3475, where the companies will trial the drug in combination with others. For instance, Amgen will see how it works alongside talimogene laherparepvec, which is an engineered cold virus previously touted as a strong potential cancer prospect. In addition, Merck will increase its in-house focus on the drug, and has announced the initiation of a Phase 1 study in 20 new cancer types.

The deal has been a main cause of the strong performance of shares in Merck and Amgen in 2014, with both companies well ahead of Bristol-Myers Squibb and the S&P 500. While the deal could be a potential catalyst through the rest of 2014 for both stocks, there is also promise elsewhere, with Amgen having multiple projected milestones for its late-stage pipeline in 2014. For instance, a U.S. filing for chronic heart failure drug, ivabradine, is expected prior to July 2014. Merck, meanwhile, is anticipating further news flow for vorapaxar and vintafolide (among others) during the year.

More positive news
The release of statistics regarding nivolumab caps a positive couple of weeks for Bristol-Myers Squibb, with the FDA also approving its drug Myalept for a rare body fat disorder. The drug has been approved as a replacement therapy to treat complications caused by leptin hormone deficiency in patients with acquired generalized lipodystrophy, and its approval is encouraging news for Bristol-Myers Squibb.

Looking Ahead
The statistics from the nivolumab study are impressive, and show that Bristol-Myers Squibb is continuing to make encouraging progress to counter the effects of patent expiries. The company is also making encouraging progress toward its goal of becoming a specialist, niche player rather than a producer of mass-market drugs. So, with Bristol-Myers Squibb's shares having made an encouraging start to 2014, potential positive catalysts, including nivolumab, could mean that shares end up having another great year, too.