Bristol-Myers Squibb (BMY) Stock Taking A Dive On Failed Study

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Bristol-Myers Squibb Co (NYSE: BMY)

Bristol-Myers Squibb is having a tremendously rough day in the market today, and for good reason. The company reported that an immune-based therapy it has been working on for the treatment of lung cancer has failed for the second time. Today, we’ll talk about the news, what we’re seeing from the stock as a result, and what we can expect to see from BMY ahead. So, let’s get right to it…

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BMY Announces Clinical Failure

As mentioned above, Bristol-Myers Squibb is having an incredibly rough day in the market today after announcing that a clinical trial has failed. For some time now, the company has been working on a drug known as Opdivo. The goal was that this immune-based therapy would be a strong treatment for lung cancer. The study, known as the Checkmate-26 study proved that the treatment was less effective than chemotherapy, the current standard of care.

During the study, BMY expected that it would at least prove that Opdivo was clinically superior in patients with high levels of a protein known as PD-L1. After all, it is expected that the levels of this protein in patients are a great indicator of how well immune-based therapies would work. However, in the trial, even those with elevated PD-L1 levels didn’t see a clinically superior result over chemotherapy. Ultimately, while the immunotherapy has worked in other cancers, the lung cancer indication simply doesn’t seem to be a fitting one.

Following the release of the results, Fouad Namouni, Head of Oncology Development at BMY, had the following statement to offer, and it summed things up perfectly:

We thought Opdivo could beat chemotherapy, and we have answered the question – for the broad population it is not enough…”

How The Stock Reacted To The News

At the end of the day, we know that the news moves the market. While positive news will generally lead to gains, the news surrounding Bristol-Myers Squibb simply wasn’t positive. Unfortunately, a treatment the company has invested tons of time and money into has proven ineffective, and that’s going to weigh heavy on the stock. Currently (11:20), BMY is trading at $50.10 per share after a loss of $5.33 per share (9.62%) thus far today.

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What We Can Expect To See Moving Forward

While today’s news was far from positive for Bristol-Myers Squibb, my view on the stock remains relatively bullish. At the end of the day, the stock took a dive as punishment for their failure today. However, the company has built an incredible name for itself and has several approved treatments on the market. Not to mention, they also have a very strong pipeline. At the end of the day, you can’t hit a home run with every swing. In the world of biotechnology, there are going to be points at which companies strike out. Nonetheless, while BMY did strike out on Opdivo, the company has done an incredible job building its brand and becoming one of the larger contenders in the industry. All in all, I’m expecting to see gains ahead.

What Do You Think?

Where do you think BMY is headed? Join the discussion at StockTwits, Twitter, Facebook, or Google+!

[Image Courtesy of Flickr]

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