Dive Brief:

• Bristol-Myers Squibb, in selling its $74 billion buyout of Celgene to Wall Street, has touted the broad pipeline and near-term commercial opportunities it would gain through a deal. Yet the attention of investors and analysts remains laser focused on the future for what would be the combined company's top-selling drugs, Opdivo and Revlimid.
• Those concerns were apparent Thursday, when Bristol-Myers disclosed along with fourth quarter earnings its withdrawal of an application to the Food and Drug Administration that sought a key label expansion for Opdivo in previously untreated lung cancer. The pharma awaits fuller trial results this year, which will go a long way to determining whether Opdivo plays a role in the lucrative first-line market. 
• Bristol-Myers' executives also faced questions from analysts on how confident the company was in its assumptions of future earnings from Celgene's Revlimid. The multiple myeloma therapy will face limited generic competition in 2022, but early entry of knockoff rivals could threaten the sizable cash flow Bristol-Myers is counting on from the drug to help pay off the acquisition. 

Dive Insight:

Combined, Bristol-Myers and Celgene would own two of the highest-selling cancer drugs currently on the market, pairing the strength of Opdivo (nivolumab) in solid tumors with the hematological success of Revlimid (lenalidomide).

The two treatments would drive a substantial share of the nearly $50 billion in revenue Bristol-Myers predicts the combined company would earn in 2022.

But questions hang over both, and the reliance of each company on their respective top-seller had driven investors' recent demands for diversification.

With its plan to buy Celgene, Bristol-Myers argues it has accomplished that goal: outlining a combined pipeline that could deliver six new drug launches over the next two years.

Thursday's earnings release, though, brought with it fresh questions on Opdivo, underscoring how linked Bristol-Myers near-term fortunes are to the cancer immunotherapy.

Originally, Bristol-Myers had hoped to win approval by early 2019 for Opdivo in previously untreated patients with non-small cell lung cancer (NSCLC) who also expressed high levels of a biomarker known as tumor mutation burden (TMB).

But survival data submitted by the pharma was judged to be a major amendment by FDA, leading the regulator last October to delay its decision. Now, Bristol-Myers has withdrawn its application altogether. 

At issue is how Bristol-Myers' chosen biomarker, TMB, relates to the more commonly used PD-L1 marker and its correlation with survival. Data from the relevant trial are expected to become available in the first half of 2019, leaving Bristol-Myers with yet another delay to its frontline lung cancer hopes.

"I think we have been really clear since October that this was a complex file," said Bristol-Myers CEO Giovanni Caforio on a Jan. 24 conference call. 

"We believe we have a real opportunity to play a role in lung cancer, and that is part of a much broader set of opportunities," Caforio later added.

The first-line NSCLC market is one of the largest in oncology and the success of Merck & Co's rival Keytruda (pembrolizumab) there has been a major factor in its recent overtaking of Opdivo in commercial sales.

"We did not think an approval for that filing would have made much of a near-term commercial impact anyway, but it does raise new questions on the company's overall strategy and approach in 1L NSCLC," wrote Credit Suisse analyst Vamil Divan in a Jan. 24 note to investors.

Additionally, fourth quarter sales released Thursday by Bristol-Myers show Opdivo sales growth in the U.S. to have slowed quarter over quarter. Total sales of $1.8 billion from October through December came in $126 million below forecasts from Cowen & Co, and $46 million below Wall Street consensus figures cited by Credit Suisse. 

Bristol-Myers executives attributed the roughly 0% quarter-over-quarter growth to an inventory build-up in the third quarter that was subsequently run down in the three months from October through December. Higher sales within Medicaid also affected Bristol-Myers Opdivo net revenue.

Those factors offset a 3% growth in demand, company executives said. Bristol-Myers expects fresh growth in 2019. 

Outside of lung cancer, Opdivo has carved out a leading share in first-line metastatic melanoma and in second-line treatment of renal cell carcinoma. Eight late-stage trial readouts in 2019 across lung, liver, head and neck, and kidney cancers could also open up new opportunities for growth in the medium-term. 

Still, analysts' questions on Thursday's earnings call make clear that even amid an industry-shaking $74 billion buyout, Opdivo's near-term performance will remain first and foremost for Wall Street.