Bristol-Myers' BLA For Opdivo Label Expansion Accepted By FDA

Bristol-Myers Squibb Company (NYSE:BMY) announced that the FDA accepted its supplemental Biologics License Application (sBLA) for the label expansion of its blockbuster immuno-oncology drug Opdivo for the indication first-line advanced non-small cell lung cancer (NSCLC) in patients with tumor mutational burden (TMB) ≥10 mutations per megabase (mut/Mb). The FDA set an action date of Feb 20, 2019.

The filing was based on the phase III CheckMate -227 study, evaluating Opdivo-based regimens versus platinum-doublet chemotherapy in patients with first-line advanced non-small cell lung cancer across squamous and non-squamous tumor histologies. There are two co-primary endpoints in Part 1 for Opdivo plus low-dose Yervoy versus chemotherapy: overall survival (OS) in patients whose tumors express PD-L1 and progression-free survival (PFS) in patients with TMB ≥10 mut/Mb across the PD-L1 spectrum. The primary endpoint in Part 2 is OS, and the study is ongoing.

Shares of the company declined 11.9% year to date compared with the industry’s decline of 5.0%.

We note that Opdivo became the first PD-1 immune checkpoint inhibitor to gain regulatory approval. It is currently approved in several countries including the United States, the EU and Japan, for several cancer indications.

Opdivo became the first PD-1 inhibitor to be approved for a hematological malignancy — classical Hodgkin's lymphoma — in both the United States (May 2016) and the EU (November 2016). The drug has been performing impressively, due to demand resulting from the rapid commercial acceptance for several indications, including melanoma, renal cell carcinoma and second-line NSCLC.

Non-small cell lung cancer occurs in 85% of patients with a lung cancer condition, the leading cause of cancer deaths worldwide. Notably, About 25% to 30% of all lung cancers are squamous cell carcinomas, and non-squamous NSCLC accounts for approximately 50% to 65% of all lung cancer diagnoses.

Moreover, despite a significant progress made in this space, the disease is associated with low survival rates. Hence, the label expansion into additional indications would give the product access to a higher patient population and increase the commercial potential of the drug significantly.

We remind investors that, Opdivo faces stiff competition from Merck’s (NYSE:MRK) anti-PD-1 therapy, Keytruda, which is approved in the first-line lung cancer setting. We also note that in March 2018, Roche (OTC:RHHBY) presented data on Tecentriq in novel combinations across a broad range of tumors including lung cancer.

Zacks Rank & Stocks to Consider

Bristol-Myers has a Zacks Rank #3 (Hold).

A better-ranked stock from the same space is Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aeglea’s loss per share estimates have narrowed from $1.93 to $1.67 for 2018 and from $3.86 to $3.57 for 2019 over the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 19.32%. The stock has rallied 101.3% so far this year.

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