After beating expectations in its Q4 earnings report and announcing data from its Phase 3 CheckMate -227 study with Opdivo plus Yervoy, shares of pharmaceutical giant Bristol-Myers (BMY 62.21, -1.27 -2.0%) are under modest pressure after some likely profit taking.
Of note, Bristol reported its Phase 3 CheckMate -227 study met its co-primary endpoint of progression-free survival (PFS) with the Opdivo (nivolumab) plus Yervoy (ipilimumab) combination versus chemotherapy in first-line advanced non-small cell lung cancer (NSCLC) patients whose tumors have high (=10 mutations/megabase, mut/mb) tumor mutation burden (TMB), regardless of PD-L1 expression.
However, despite this undeniably positive update and recommendation from an independent committee that the trial continue, some on the Street were left wanting. Evidently investors and patients will have to keep waiting, as BMY only stated that results would be shared with regulatory authorities and presented at a future congress.
Data was highly anticipated behind peers Roche Hldg’s (RHHBY 29.59, -0.41) Tecentriq and Merck’s (MRK 58.51, -0.05) Keytruda have established as leaders in the cancer treatment space.
The next dates for the Opdivo/Yervoy milestones are for RCC PDUFA of April, 2018. The HCC for Opdivo is expected in the second half of 2018 and the SCLC tumor trial for Opdivo +/- Yervoy is scheduled for the second half of 2019.
As to earnings, BMY reported better than expected Q4 earnings per share of $0.68 on revenues which rose about 4% year-over-year to about $5.45 billion. Revenues increased 2% when adjusted for the impact of foreign exchange. Additionally, gross margin as a percentage of revenue decreased from 73.6% to 69.3% in the quarter primarily due to product mix.
Breaking it down by product, MY’s Eliquis drove strength in the quarter reporting a 44% revenue increase compared to last year. The company’s Opdivo, Orencia, Sprycel and Yervoy treatments reported growth of 4%, 6%, 7% and 2%, respectively.
Guidance was just in-line for BMY’s introduction to FY18. The company sees EPS at $3.15-3.30 on worldwide revenue growth in the low- to mid-single digits. Further, gross margin as a percentage of revenue to be about 70% for both GAAP and non-GAAP. Lastly, BMY sees an effective tax rate between 20% to 21% for both GAAP and non-GAAP.
So, even though the cancer trial met its co-primary endpoint and the company reported strong Q4 earnings, investors still seemed to have employed some scaling back early Monday. Shares of peers AZN -2.91% RHHBY -1.33% MRK -0.05% trade weaker into the afternoon.