Bristol-Myers Squibb Co. posted strong results owing to its immuno-oncology franchise during the quarter, even as European regulators gave pause over using the drug in combination as an initial treatment for renal cancer.
During the second-quarter earnings call, New York-based Bristol-Myers touted its main revenue booster, cancer immunotherapy Opdivo. The drug managed to deliver 36% sales growth year over year in the second quarter, or $1.63 billion, despite a highly competitive market.
But Bristol-Myers CEO Giovanni Caforio said during the company's July 26 second-quarter earnings call that European regulators had announced they would recommend against the approval of a combination of the company's two immunotherapy drugs Opdivo and Yervoy to treat first-line renal cancer. Caforio said the company had just been informed that the European Medicines Agency's Committee for Medicinal Products for Human Use is going to adopt a negative opinion for the treatment.
Bristol-Myers Chief Scientific Officer Thomas Lynch said the agency felt the company had not adequately demonstrated the contribution components and did not want to set a precedent for future approvals. Lynch said the company nevertheless believes the combination of Opdivo and Yervoy is "something doctors are going to want to be able to treat their patients with," and that the negative opinion does not foreshadow possible problems with the drug combination's use for other types of tumors.
"We strongly disagree with this opinion, and in the interest of patients, we will pursue a re-examination," Caforio said.
Positive results for Opdivo
The CEO, however, stressed that the drug combination has received a number of approvals from other regulators including the U.S. Food and Drug Administration to treat renal, colorectal and melanoma tumors, and certain types of lung and colon cancers. Opdivo also picked up a couple of nods from U.S. and European regulators and recorded positive results in multiple studies at the 2018 American Society of Clinical Oncology meeting.
Earlier in July, U.K.'s National Institute for Health and Care Excellence, or NICE, rejected Opdivo for routine use in the National Health Service to treat bladder cancer. Opdivo's fiercest competitor, Merck & Co. Inc.'s Keytruda, received backing from NICE to treat bladder cancer in March 2018.
In June, Opdivo became the first and only PD-1 inhibitor as well as immuno-oncology agent approved in China to treat a certain type of lung cancer. Bristol-Myers executives declined to comment specifically on pricing opportunities, but said the company is in the process of submitting pricing materials for the drug. Christopher Boerner, head of international markets for Bristol-Myers, said lung cancer is a significant public health issue in China, but he nevertheless sees some challenges for the drug's roll out there due to the realities of the country's healthcare system.
"This is a very large and highly fragmented market in China, where basic availability to care is still somewhat of an issue," said Boerner. "Opdivo will launch into a cash pay market before we secure ultimately national reimbursement."
Bristol-Myers continues to explore new tumor therapies for Opdivo, and is expecting data in the next six to 18 months for non-small cell lung cancer, hepatocellular carcinoma, small cell lung cancer, gastric and head and neck cancers, according to Caforio.
As for other products, Bristol-Myers reported that blood clot drug Eliquis recorded second quarter sales growth of $1.65 billion — a 40% increase year-over-year. Caforio said the drug "is poised to overtake warfarin in the broader oral anticoagulant class, and I'm confident Eliquis will continue to be an important driver of growth for the company."
Overall, Bristol-Myers booked second-quarter net earnings of $1.65 billion, or $1.01 per share, up from $1.22 billion, or 74 cents per share, a year earlier. The S&P Capital IQ consensus normalized EPS estimate for the second quarter is 87 cents.