Bristol-Myers Squibb is one of Wall Street’s largest and most valuable biopharmaceutical company with a market cap of more than $80 billion.
Shares of Bristol-Myers hit a new 52-week low of $49.54 on Monday and lost more than 10 percent on the day. It’s stock is now lower by nearly 30 percent since the start of 2016 and nearly 20 percent over the past year.
Bristol-Myers’ cancer drug, Opdivo, was responsible for erasing $20 billion of the company’s market capitalization back in August. At that time the company’s drug didn’t live up to expectations when it failed to demonstrate that it was significantly better than chemotherapy in a study involving patients suffering from lung cancer.
The biopharmaceutical company is considered a leader in cancer research so its announcement in August shocked the market and investors who fled the stock.
Prior studies of Opdivo were encouraging as the drug resulted in the median survival rate of cancer patients standing at 25 months – five months longer than patients who were given an older drug.
Unfortunately, the drug suffered another setback on Monday when the company offered an update.
Bristol-Myers said that Opdivo failed in proving it is superior to chemotherapy in patients with high levels of a protein called PD-L1 which may have foreshadowed how effective a cancer victim’s immune-system will work.
The company did say that Opdivo shows “favorable overall health status compared to chemotherapy” and that its “data continue to inform the scientific community on the use of Opdivo in previously treated NSCLC, a difficult-to-treat cancer.”
Bristol-Myers’ investors nevertheless flocked the stock and some bought shares of its largest peer and rival.
The company’s disappointing results helped boost shares of Merck & Co. (NYSE: MRK) higher. In fact, the company’s stock hit a new 52-week high of $64.86 on Monday and is now higher by more than 20 percent since the start of 2016.
Both Bristol-Myers and Merck are permitted to sell their medicines to people suffering from advanced lung cancer.
“No one believes that Opdivo is dead in first line,” Sam Fazeli, a Bloomberg Intelligence analyst was quoted in a Bloomberg report as saying. “It’s a drug that has worked in many settings. It’s just that the trial had so many aspects that apparently worked against it.”
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