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Bristol-Myers Squibb’s Oncology Segment in 2Q15

Bristol-Myers Squibb Stock Falls after 2Q15 Earnings Release

(Continued from Prior Part)

The oncology segment

The oncology segment contributed ~24% of total revenues for Bristol-Myers Squibb (BMY) in 2Q15. Investors can refer to Bristol-Myers Squibb’s Oncology Franchise for more detail about the past performance of this segment. The key products for the oncology segment include Erbitux, Yervoy, Sprycel, and Opdivo.

Erbitux

Erbitux sales fell by ~9% in 2Q15 as compared to 2Q14. As discussed earlier, Bristol-Myers Squibb has entered into an agreement with Eli Lilly (LLY) to transfer the rights of manufacturing and marketing Erbitux for North America to Eli Lilly’s wholly owned subsidiary ImClone. This transition will be completed by October 2015. Bristol-Myers Squibb will receive tiered royalties through September 2018 for net sales of Erbitux in North America.

Sprycel

Sprycel, an oral inhibitor, reported an increase of ~10% in 2Q15 revenues as compared to 2Q14, following an increased demand for the drug.

Yervoy

Yervoy is a monoclonal antibody used to treat melanoma. Yervoy revenues fell by ~8% in 2Q15 as compared to 2Q14. The sales in the US markets were 21% lower in 2Q15 as compared to 2Q14, following the approval of other drugs in US markets. This impact will continue in the short term until the company gets approval for the Opdivo and Yervoy combination, which is expected by the end of 2015.

Merck and Co’s (MRK) Keytruda (pembrolizumab), a PD-1 blocker (a compound that blocks the interaction between PD-1 protein and its ligands), received FDA approval in 2014 for the treatment of melanoma. Keytruda is a better first-line therapy as compared to Yervoy, thereby impacting the Yervoy sales.

Opdivo

Opdivo is a human PD-1 blocking antibody used in lung cancer and melanoma treatments. Opdivo is part of BMY’s alliance with Ono Pharmaceutical. It is the seventh drug to get FDA approval for the treatment of melanoma since 2011. Opdivo reported sales of $122 million in 2Q15. In the next article, we’ll discuss what Btristol-Myers Squibb expects from Opdivo.

Apart from Merck, Novartis (NVS), Celgene (CELG), and Johnson & Johnson (JNJ) compete with Bristol-Myers Squibb’s oncology segment. Investors can consider ETFs like the Health Care Select Sector SPDR ETF (XLV), which holds ~3.8% of its total investments in Bristol-Myers Squibb.

Continue to Next Part

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