Laboratory. Picture: ISTOCK
Laboratory. Picture: ISTOCK

Bristol-Myers Squibb investors hope that a showdown involving new lung cancer studies on Monday will give the stock a long-awaited boost.

The shares have languished ahead of the upcoming American Association for Cancer Research’s annual meeting in Chicago, as Wall Street awaits the lung cancer clash between Bristol-Myers and rival Merck & Co.

Bristol-Myers could rise as much as 8% if it can show a response rate that is 10% to 15% better than Merck’s product, according to Credit Suisse analyst Vamil Divan. Disappointing results combined with strong Merck data could send Bristol-Myers down as much as 6%, Divan said.

BMO Capital Markets analyst Alex Arfaei expects that the Bristol-Myers data will be disappointing. The drug maker is focusing on a narrower group of patients that would require doctors to conduct additional screening that isn’t currently driving their decision-making.

Merck’s patient group is broader, plus the drug maker is already in the lead in lung cancer. A successful study plus disappointment for Bristol-Myers could send Merck shares up 3% to 5%, while the potential downside is only 2% to 3%, Divan said in a telephone interview.

Merck

Merck will present data from its KeyNote-189 trial at 10.35am in Chicago on Monday. The study looked at Keytruda plus chemotherapy compared to chemotherapy alone in patients with lung cancer, regardless of their PD-L1 expression. Recent success from the Keynote-042 monotherapy trial "undoubtedly cemented" Merck’s position in lung cancer and helps to move the goal post for the lung-cancer race, Bloomberg Intelligence analyst Sam Fazeli wrote.

Credit Suisse expects "clearly positive data" that should be the "cleanest and easiest to interpret out of the group of studies."

Bristol-Myers

At 11.35am on Monday, investors will get a first look at results from Bristol-Myers’s Phase 3 CheckMate-227 study of Opdivo and Yervoy in patients newly diagnosed with advanced lung cancer with high tumour mutational burden. The stock reaction will depend on the combination’s performance against Opdivo by itself, though comparisons will be made to Merck’s KeyNote-189, according to Divan. Bristol-Myers could be up 6% to 8% in the best-case scenario or down about 6% in the worst case, Divan says.

Bristol-Myers is "already about one-and-a-half years behind" and "combined with Merck’s monotherapy setting a higher benchmark, they are likely to disappoint," BMO’s Arfaei said by phone.

Citi said on Thursday that Pfizer CEO Ian Read called Bristol-Myers "high risk" and said he had no interest in buying the company without "transformational data" or a de-rating of the shares.

Blueprint Medicines

Blueprint Medicines will present data from a Phase 1 study of its RET inhibitor, BLU-667, in solid tumours, on Sunday. Investor focus will be on the efficacy and safety of the drug dose that will be advanced into the next stage of clinical trials.

The data will also be compared with those from Loxo Oncology, which is developing RET inhibitor LOXO-292, Goldman Sachs analyst Terence Flynn writes. Loxo is likely to present additional data at the American Society of Clinical Oncology meeting in June, according to Flynn, which will help to determine the bar for success between the two drugs.

Fate Therapeutics

Fate Therapeutics will present results on Monday from its off-the-shelf CAR-T cancer therapy FT819. Piper has highlighted the company as a top pick.

ArQule

ArQule investors will be focused on Phase 1 data for ARQ 751 in patients with solid tumours on Sunday. The company will also have poster presentations for ARQ 531, which Leerink analyst Jonathan Chang said is ArQule’s most exciting product in development and presents upside for the stock.

The shares are up more than 50% since the company announced its presentations for the conference on March 15.

Dynavax Technologies

Dynavax Technologies will present Phase 1 results of SD-101 combined with Merck’s Keytruda in melanoma on Tuesday.

Bloomberg

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