UPDATE: Goldman Sachs Removes Bristol-Myers Squibb Co. (BMY) from Conviction Buy List
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(Updated - October 13, 2016 9:13 AM EDT)
Goldman Sachs downgraded Bristol-Myers Squibb Co. (NYSE: BMY) from Conviction Buy to Buy with a price target of $67.00 (from $75.00). Analyst Jami Rubin said disappointing CM-26 data adds uncertainty.
"We still believe Opdivo will remain the standard of care in multiple tumor types and has potential to take meaningful share in the large 1L lung market, assuming Checkmate-012, CM-568, and most importantly, CM-227 hold up in clinical trials. However, we acknowledge that disappointing CM-26 data adds a greater level of uncertainty to future trials. We think BMY is well positioned for 2017, and view the shares as very attractive over the long run, but recognize the near-term catalyst path is less clear," said Rubin.
We remain believers in the IO-IO strategy based on the numerous positive Opdivo + Yervoy studies across a multitude of tumor types and impressive early data in 1L lung. However, CM-26 data at ESMO was confounding and disappointing," continued the analyst. "Unfortunately, BMY’s (and the discussant’s) explanation that significant patient imbalances and low PDL-1 cutoff in CM26 led to the poor outcome has not put an end to the controversy. Conversely, KN24 was impressive, but MRK’s trial included strict patient criteria, leading to great data but ultimately limiting its patient population."
Rubin added, "We believe there is no difference between Opdivo and Keytruda, a view widely shared by KOLS at ESMO and supported by numerous clinical trials. However, investors were left with more questions than answers and concerns around the introduction of patient bias into trial design. That said, we remain confident in BMY as a leader in IO and continue to believe that IO-IO regimens will ultimately show better long-term outcomes than IO chemo, establishing a new standard of care in multiple tumor types and 1L lung, but this thesis will take time to play out. While BMY shares appear to be washed out (no sales in the stock for lung, a major overreaction, in our view), we believe it will probably take positive results from next year’s 1L combo studies to change perception."
Shares of Bristol-Myers Squibb Co. closed at $50.01 yesterday.
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