Zacks_Analysts' Blog : Pipeline Setback at Bristol-Myers - Analyst Blog

Bristol-Myers Squibb Company (BMY) recently suffered a pipeline setback with its oncology candidate, brivanib, performing disappointingly in a late-stage study (BRISK-PS). The study evaluated brivanib as a combination therapy in liver cancer patients who had either failed or were intolerant to Onyx Pharmaceuticals, Inc. / Bayer’s (ONXX/BAYRY) Nexavar.

Results from the multicenter, double-blind, randomized study revealed that there was no improvement in the overall survival rate for patients treated with brivanib and the best supportive care (BSC) versus those in the placebo plus BSC arm. Bristol-Myers intends to present detailed data from the study at an upcoming scientific conference.

The disappointing results of the BRISK-PS study notwithstanding, Bristol-Myers intends to continue evaluating the liver cancer candidate in three other late-stage studies. Bristol-Myers stated that it has conducted 29 studies till date involving brivanib whereby, more than 4,000 patients have been evaluated globally.

Bristol-Myers further noted that the study evaluating brivanib as a first-line therapy for liver cancer patients is expected to be completed next year. The successful development of brivanib would boost the top line significantly as the liver cancer market offers significant commercial potential.

We believe that investor focus will be more on the fate of diabetes candidate dapagliflozin (target date: January 28, 2012) and blood thinner Eliquis (target date: March 28, 2012) in the US rather than brivanib as we welcome 2012.

The robust pipeline notwithstanding, we remain concerned about the generic threat to many of Bristol-Myers’ leading drugs. Most importantly, blockbuster blood thinner Plavix, co-developed with Sanofi (SNY), is scheduled to go off patent in the US early next year. This will lead to a significant loss in revenues. Bristol-Myers is also looking to combat the generic threat by introducing new products and entering new deals.

Our Recommendation

Currently, we have a long-term Neutral recommendation on Bristol-Myers, which carries a Zacks #3 Rank (short-term Hold rating).