CM-9LA hits in 1L NSCLC ahead of expected; filing likely 1H20
We look for strength in BMY shares today given a major win for its Opdivo franchise with a positive interim top-line readout from its high-profile phase 3 CheckMate-9LA study (Opdivo + Yervoy + chemotherapy) in 1L NSCLC, which comes ahead of the expected early 2020 timeframe. While we view the company’s recent data from CM-227 (Opdivo + Yervoy) at ESMO as an important step for Opdivo, the CM-9LA study represents a potentially much larger opportunity for its overall I/O positioning in the lung market—which represents by far the largest indication across solid tumors. While questions over the trial will remain until we get detailed results at a meeting (likely AACR in April, or ASCO in June at the latest), we’d highlight today’s announcement as a much needed win for the company on the back of the controversial Celgene pending acquisition, and an important catalyst that in our view represents the start to a re-rating of shares. Reiterate Buy and $60 PO.
We had the opportunity to speak with management, who noted that while 9LA will be an important registrational dataset for the Opdivo franchise, the plan is to go ahead with the CM-227 filing imminently (rather than wait for CM-9LA) given that they only have top-line 9LA data in-house. That said, we’d expect a quick regulatory turnaround for 9LA, with a likely submission in 1H20 (assuming data presented at AACR or ASCO).
Lingering questions over safety profile and subgroup analysis
While today’s data will likely prompt upside to current Opdivo/Yervoy expectations, we recognize that several questions are likely to remain before the Street fully warms up to Opdivo as a player in 1L lung. Top of mind questions include: 1) how will the safety profile look given the three regimen combo, 2) strength of data in subgroups given the primary analysis was in all-comers (PD-L1 high, low, and negative expressers), and 3) durability profile (though we note that the follow up will be much shorter than CM-227).