Immuno-Oncology Is Still a Key Growth Driver for BMY in 2017


Feb. 28 2017, Updated 7:38 a.m. ET

Immuno-oncology portfolio

Despite stiff competition from oncology players such as Roche Holdings (RHHBY), Merck & Co. (MRK), and Johnson & Johnson (JNJ), Bristol-Myers Squibb’s (BMY) immuno-oncology (or IO) portfolio has continued to be a key growth driver for the company in 2017.

In 2016, Opdivo managed to report revenue close to $3.8 billion, which is indicative of the strong commercial performance of the drug across the world. The company also managed to secure favorable reimbursement for Opdivo in France and Germany, which could further boost the drug’s revenue in 2017.

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Projections for 2017

The above diagram shows weekly sales trends for Bristol-Myers Squibb’s IO drugs, Opdivo and Yervoy, compared to Keytruda and Tecentriq.

While Bristol-Myers Squibb anticipates flat demand for the drug in the U.S. market mainly due to entry of Tecentriq in the second-line non-small cell lung cancer (or NSCLC) space, the company expects Opdivo to witness solid demand trends in international markets in 2017.

Following successful reimbursement negotiations, the company expects uptake curves in these international markets to be as strong as witnessed by the drug in the US market. In France and Germany, Bristol-Myers Squibb is anticipating growth for Opdivo in the lung cancer and melanoma segments. The company is also witnessing the rapid uptake of Opdivo in the renal cell carcinoma (or RCC) segment in Germany.

In the US market, Bristol-Myers Squibb believes that Opdivo’s revenue growth will be dependent on its adoption of the drug in other indications such as melanoma, RCC, head and neck cancer, and small cell lung cancer.

If non-lung indications and international market performance enable Bristol-Myers Squibb to offset the loss of Opdivo’s lung cancer revenue from the US market, it could have a positive impact on the company’s share price along with the price of the Vanguard Total Stock Market ETF (VTI). Bristol-Myers Squibb makes up ~0.39% of VTI’s total portfolio holdings.

In the next article, we’ll discuss how Bristol-Myers Squibb plans to create shareholder value in 2017.


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