Bristol-Myers reshapes operations in wake of Opdivo miss
- After some devastating clinical news for blockbuster checkpoint inhibitor Opdivo, Bristol-Myers Squibb CEO Giovanni Caforio, speaking on a third quarter earnings call Thursday said the company will be "evolving our operating model to more effectively focus resources on key priorities and simplify execution."
- Sales of Opdivo (nivolumab) grew more than 200% year-over-year, pulling in $920 million in worldwide revenue during the third quarter. By way of comparison, Merck & Co's rival drug Keytruda (pembrolizumab) brought in only $356 million during the same three-month period.
- On August 5, Bristol announced Opdivo failed in the CheckMate-026 trial testing the PD-1 inhibitor in first-line non-small lung cancer. Merck's Keytruda was approved in that same first-line indication earlier this week — setting it up for a major advantage in that market.
"We had disappointing results from CheckMate-026. The results of these trials do not, however, change our strategy. We've applied learnings from the trial to our entire development program and we are advancing a broad set of opportunities for Opdivo," said Caforio during the Thursday morning call with analysts.
The company noted it currently has 60% to 70% of the second-line lung cancer population and expects ramp-up for Keytruda to be slow in first-line lung cancer since only about 50% of patients are tested for the PD-L1 biomarker. Keytruda is approved only for patients who express high levels of this key protein.
"We remain fully confident in our Opdivo development program which is both broad and promising with data expected from eight potentially registrational trials over the next 12 months and, based on our current assumptions for 2017, we expect Opdivo sales to grow globally as well as in the U.S. The trends are good and we feel optimistic about Opdivo in the short and the long term," he added.
Caforio revealed Bristol has been streamlining its operating model since early 2016 and said resources would be channeled in a more focused way to several key areas.
To start, Bristol plans to invest heavily in a "set of key brands and key markets," which the company considers critical — there are currently 20 such markets.
Secondly, Bristol will spend more heavily in R&D and expects its spend to increase in 2017 compared to this year. The company spent 22% of its $4.9 billion in third quarter revenues on R&D during the period ended September 30.
Lastly, the company will streamline manufacturing to focus more on biologics. Three quarters of its portfolio is currently dedicated to that space.
- Bristol-Myers Squibb Earnings release
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