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Opdivo: Bristol-Myers Squibb’s Blockbuster Drug

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Mar. 31 2016, Published 5:26 p.m. ET

Opdivo: The immuno-oncology drug

Bristol-Myers Squibb’s (BMY) latest drug Opdivo was the seventh drug to be approved by FDA for the treatment of melanoma. Apart from melanoma, this drug is also approved for the treatment of lung cancer.

Opdivo is a part of Bristol-Myers Squibb’s (BMY) alliance with Ono Pharmaceutical, and it reported revenues of $942 million in 2015. Also, analysts estimate Opdivo revenues to increase to $2.92 billion in 2016.

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How Opdivo works

Opdivo is a human programmed death receptor protein-1 (PD-1) blocking antibody that reduces tumor growth by blocking the interaction between PD-1 and its ligands.

What Opdivo means to BMY

Opdivo is one of BMY’s most important developments. The company expects Opdivo to be one of the major revenue contributors in the next five years.

This drug is already approved for melanoma and forms of lung cancers. It is under Phase III clinical trials for its use in the treatment of renal cell carcinoma (or kidney cancer) as well as non-small cell lung cancer.

Opdivo in global markets

For US markets, lung cancer is an important opportunity for Bristol-Myers Squibb, as it is the first company to market drugs for squamous cell cancer. Opdivo is already added to non-squamous cell carcinoma.

The European Commission approved Opdivo in June 2015, making Opdivo the first and only PD-1 checkpoint inhibitor approved in Europe for first line as well as previously treated advanced melanoma patients.

Apart from Opdivo, Yervoy is also used for the treatment of melanoma. The FDA and European Commission have validated the Opdivo combination with Yervoy for metastatic melanoma.

Other drugs used for the treatment of melanoma are Merck’s (MRK) Intron A, Sylatron and Keytruda, Novartis’s (NVS) Proleukin, GlaxoSmithKline’s (GSK) Mekinist and Tafinlar, and Roche’s Zelboraf.

Investors can consider ETFs like the Health Care Select Sector SPDR ETF (XLV), which holds ~4.1% of its total assets in Bristol-Myers Squibb, or the iShares US Healthcare ETF (IHE), which holds 7.0% of its total assets in Bristol-Myers Squibb.

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