For almost four years, Bristol-Myers Squibb Co investors have profited handsomely thanks to the company’s sharp focus on cancer. On Friday, they felt the other side of that concentrated bet.
The drop in the shares on Friday — the worst in more than 16 years — had as much to do with the failure of Bristol-Myers’s drug Opdivo in a clinical trial for lung cancer as it did with investors’ now-shaken confidence in the New York-based company’s ability to be the breakaway leader in the field. It was also a stark reminder of the risks of drug development.
No other large pharmaceutical company has recently focused on one disease area like Bristol-Myers has, in this case by targeting drugs that leverage the immune system to attack tumors. The trial results, which showed that Opdivo failed to do better than chemotherapy at keeping previously untreated patients’ cancer from progressing, have left the door open for competitors like Merck & Co, AstraZeneca PLC and Roche Holding AG.
Bristol-Myers shares were down 16 percent to US$63.28 at the close in New York. Merck gained 10 percent to US$63.86.
Immunotherapy is a market potentially worth billions of dollars a year — Opdivo is predicted by analysts to bring in US$10.7 billion in 2020, and the immune-system drugs are projected to make up almost half of Bristol-Myers’ sales by that time.
Lung cancer is the biggest killer in oncology, according to the American Cancer Society, and the drugs have thus far been largely approved for cancers that affect fewer patients.
Bristol-Myers does not have any plans to alter its focus just yet or diversify away from cancer.
“It is clear, because of our track record of success, the expectations are high,” chief executive officer Giovanni Caforio said in a telephone interview on Friday. “It does really not change our focus and it does not change the long-term potential of Opdivo; it does not impact our commitment to making immuno-oncology the central pillar of our strategy.”
Friday’s results also expose the difference between the development strategies at Bristol-Myers and Merck, which has a competing drug in the same class, called Keytruda.
Merck designed its study to exclude patients with lower levels of a key biomarker thought to predict response to the drug. While that meant a smaller market, it meant a higher probability of success — and the trial reported positive results in June. Bristol-Myers’ trial included patients with lower levels of the biomarker.
Caforio said Bristol-Myers is still pushing ahead in studying previously untreated patients, but with combination drugs that could help more patients respond to the treatments, rather than just the ones with the highest levels of biomarkers in their tumors. Those results might not be ready until 2018.
“Our strategy continues to be the best strategy,” Caforio said.
The expectation is “not that every single trial will work, and it’s not about who wins every time one trial is completed,” he said.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to