Bristol-Myers' Melanoma Study Misses Goal, Closes Celgene Deal

Bristol-Myers Squibb Company (NYSE:BMY) announced that the phase III study evaluating a combination of Opdivo plus Yervoy in patients with resected high-risk melanoma missed one of the co-primary endpoints.

The double-blind, randomized CheckMate-915 study evaluated the Opdivo-Yervoy combination versus Opdivo as a monotherapy for the adjuvant treatment of patients, who have had a complete surgical removal of stage IIIb/c/d or stage IV (no evidence of disease) melanoma.

The study did not meet one of the co-primary endpoints of recurrence-free survival (RFS) as statistically significant benefit was not reached in patients whose tumors expressed PD-L1

The Data Monitoring Committee recommended to continue the study unchanged.

Shares of Bristol-Myers have rallied 8.5% so far this year, outperforming the industry’s rise of 4.9%.

We note that Opdivo is currently approved in several countries including the United States, the EU and Japan for several cancer indications.

The company continues to evaluate Opdivo alone or in combination therapies with Yervoy and other anti-cancer agents. The drug generated sales of $5.4 billion in the first nine months of 2019, reflecting an increase of 10% year over year.

Label expansion of Opdivo into additional indications would lend the product access to a higher patient population and increase its commercial potential significantly. However, a key study failure like CheckMate-915 can hurt the growth prospects of Opdivo.

In a separate press release, Bristol-Myers announced that it has closed the long impending acquisition of Celgene Corp. (NASDAQ:CELG) for a whopping $74 billion. Last week, the U.S. Federal Trade Commission ("FTC") permitted to close the merger of Bristol-Myers with Celgene after the latter agreed to divest its blockbuster psoriasis drug Otezla to Amgen (NASDAQ:AMGN) in August.

As a result, Bristol-Myers met all the regulatory requirements under the merger agreement to complete the buyout of Celgene and completed the transaction.

The acquisition is likely to boost Bristol-Myers’ oncology portfolio, given the stiff competition for Opdivo from the likes of Merck’s (NYSE:MRK) PD-L1 inhibitor Keytruda.

We remind investors that in January 2019, Bristol-Myers announced that it will acquire Celgene. Following several roadblocks, the acquisition was finally given a green signal in April. In July, the merger was granted unconditional approval by the European Commission.

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