Deutsche Analysts React To Bristol-Myers Clinical Trial Disappointment

Deutsche Bank has cut its estimates and price target on Bristol-Myers Squibb Co

shares following its clinical trial disappointment. Bristol-Myers said on Friday that its CheckMate-026 Study, which was investigating the use of Opdivo (nivolumab) as monotherapy, failed to meet its primary endpoint of progression-free survival in patients with previously untreated advanced non-small cell lung cancer (NSCLC) whose tumors expressed PD-L1 at ≥ 5%. As such, analyst Gregg Gilbert cut his estimates for Opdivo to $5 billion in 2017 (from $6 billion) growing to about $8 billion in 2020 (versus about $9 billion earlier). The brokerage had estimated the 1L monotherapy US market opportunity to be about $7 billion. The analyst also slashed his 2017 revenue forecast to $21.4 billion from $22.6 billion and EPS view to $3.23 from $3.70. In addition, despite maintaining Hold rating on the stock, Gilbert trimmed his price target to $62 from $68. That said, the analyst said BMY's broad based development strategy for Opdivo includes several tumor types. In 2017, Gilbert anticipates momentum from uptake in pre-treated renal cell carcinoma, classical Hodgkin's lymphoma, and head and neck cancer. "We also assume continued growth in 2017 in metastatic melanoma and 2L lung indications, although increasing usage of Keytruda in the 1L setting could affect growth in 2L for Opdivo," Gilbert noted. At the time of writing, shares of Bristol-Myers fell 4.60 percent to $60.35.