Opdivo: The King of Combinations?

In 1901, J.S. Pughe published an illustration depicting John D. Rockefeller wearing a huge crown, standing on an oil storage tank labeled "Standard Oil" and glaring out at the world. The crown is decked with railroad cars, the names of railroad companies, oil tanks and wells, all topped by the mighty dollar sign. The piece is entitled: "The King of Combinations."

In 2009, Bristol-Myers Squibb (BMS) paid $2.4 billion to acquire Medarex, a biotechnology company developing a promising treatment for melanoma. Four years earlier, Japanese pharmaceutical company Ono and Medarex had partnered to research and develop an antibody against the PD-1 receptor as a potential treatment for cancer. The compound they developed was named nivolumab and later branded as Opdivo.

In 2011, BMS obtained exclusive worldwide rights to Opdivo except in Japan, Korea, and Taiwan, where Ono retained rights. And in 2014, the FDA granted accelerated approval to Opdivo to treat patients with unresectable or metastatic (advanced) melanoma who no longer respond to other drugs.

Opdivo became highly regarded as one of the most promising checkpoint inhibitors, and sales quadrupled from $942 million in 2015 to $3.77 billion in 2016. Analysts predicted that Opdivo sales could reach $12 billion in 2021, largely driven by achieving first-line approval for the treatment of lung cancer.

Then came the August 2016 shocker. BMS reported that Opdivo had not slowed the progression of advanced lung cancer in a clinical trial any better than conventional chemotherapy. Shares of Bristol-Myers plummeted some 16%.

Even before the 2016 nightmare, BMS had been running trials that combined Opdivo with other compounds, developed both inside and outside of the company. But now this combinatorial strategy moved into much higher gear as more than ten clinical studies would be launched that coupled Opdivo with other compounds.

Last month The Economist published a piece entitled "Pharma frenemies: A rush for immunotherapy cancer drugs means new bedfellows." The piece suggested that biopharma could create more shareholder value through collaborations around combinations than from the often expensive use of M&A.

There are no guarantees that biopharma will be able to successfully execute this complex form of corporate development. But, if so, is it possible that Opdivo might become a new king of combinations?