Why Bristol-Myers Failure Is a Huge Win for Merck

Shares of Bristol-Myers Squibb Co. (NYSE: BMY) took a nosedive in Friday’s session following an update in its late-stage Checkmate trial. Unfortunately the results did not reach the primary endpoint, and shareholders are consequently suffering. However, Bristol-Myer’s failure was a big win for Merck & Co. (NYSE: MRK) as shares climbed to close out the week.

Early on Friday, Bristol-Myers announced that CheckMate -026, a trial investigating the use of Opdivo (nivolumab) as monotherapy, did not meet its primary endpoint of progression-free survival in patients with previously untreated advanced non-small cell lung cancer (NSCLC).

The company will complete a full evaluation of the CheckMate -026 data and work with investigators on the future presentation of the results.

Overall, this is a huge blow to Bristol-Myers, while it is especially good for Merck, which has a competing drug that recently succeeded in its trial. Merck’s drug Keytruda also recently won the approval of the European Commission for patients with locally advanced or metastatic NSCLC.

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Giovanni Caforio, M.D., CEO of Bristol-Myers, commented:

Opdivo has become a foundational treatment that is transforming cancer care across multiple tumor types. While we are disappointed CheckMate -026 did not meet its primary endpoint in this broad patient population, we remain committed to improving patient outcomes through our comprehensive development program, including the ongoing Phase 3 CheckMate -227 study exploring the potential of the combination of Opdivo plus Yervoy for PD-L1 positive patients, and Opdivo plus Yervoy, or Opdivo plus chemotherapy in PD-L1 negative patients.

Shares of Bristol-Myers were last seen down 17% at $62.42, with a consensus analyst price target of $77.50 and a 52-week trading range of $51.82 to $77.12.

Merck traded up more than 7% at $62.10. The consensus price target is $62.15, and the 52-week range is $45.69 to $62.61.

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