Bristol-Myers Squibb’s Opdivo: Why Is It Important?
Taking Bristol-Myers Squibb's Pulse: What Drives Its Valuation?
Opdivo: The immuno-oncology drug
Bristol-Myers Squibb’s (BMY) latest drug, Opdivo, was the seventh drug to be approved by the FDA for the treatment of melanoma. Apart from melanoma, this drug is also approved for the treatment of lung cancer. Opdivo reported revenues of $942 million in 2015.
How does Opdivo work?
Opdivo is a PD-1 (programmed cell death receptor-1) blocking antibody that reduces tumor growth by blocking the interaction between PD-1 and its ligands.
What does Opdivo mean to BMY?
Opdivo is one of BMY’s most important developments. The company expects Opdivo to be one of its major revenue contributors in the next five years. This drug is already approved for melanoma and forms of lung cancer and is under Phase III clinical trials for its use in the treatment of renal cell carcinoma (or kidney cancer) as well as non-small cell lung cancer.
Opdivo in global markets
For US markets, lung cancer is an important focus for Bristol-Myers Squibb, as it is the first company to market drugs for squamous cell cancer. Opdivo is already used for non-squamous cell carcinoma. Opdivo has seen several key developments:
the FDA approved the Opdivo-Yervoy combination for the treatment of BRAF v600 wild-type melanoma in January 2016
Bristol-Myers Squibb stopped its Phase 3 study on the use of Opdivo in platinum-refractory squamous cell carcinoma of the head and neck in January 2016 due to an advantage in overall survival
Bristol-Myers Squibb and its partner Ono Pharmaceutical received manufacturing and marketing approvals for Opdivo in Japan in December 2015 for the treatment of unresectable, advanced, or recurrent non-small cell lung cancer.
the FDA approved Opdivo injections for the treatment of advanced renal cell carcinoma and for the treatment of patients with BRAF v600 wild type melanoma in November 2015
The European Commission approved Opdivo in June 2015, making Opdivo the first and only PD-1 checkpoint inhibitor approved in Europe for the treatment of melanoma, both as a first-line treatment and for previously treated cases.
Yervoy is also used for the treatment of melanoma. The FDA and the European Commission have validated the Opdivo-Yervoy combination for the treatment of metastatic melanoma.
Other drugs used for the treatment of melanoma are Merck’s (MRK) Intron A, Sylatron, and Keytruda, Novartis’s (NVS) Proleukin, GlaxoSmithKline’s (GSK) Mekinist and Tafinlar, and Roche’s Zelboraf. Investors could consider ETFs such as the Health Care Select Sector SPDR ETF (XLV), which holds ~3.8% of its total investments in Bristol-Myers Squibb, or the iShares US Healthcare ETF (IHE), which holds 6.8% of its total investments in Bristol-Myers Squibb.
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