Why BMY News Is Not As Bad As Hysterical Investors Believed


This article was corrected after being posted. Read our apology at the end of the article.

Forecasting exaggerated impact of negative-looking news has stricken GlaxoSmithKline (GSK) shareholders today, while enchanting Merck’s (MRK) shareholders. GSK said that: “Used as a single therapy”, its checkpoint immunotherapy drug Opdivo has failed a trial for newly diagnosed lung cancer patients.

GSK said that the Checkmate-026 study has not met its primary endpoint of improvement in progression-free survival. The stock tumbled losing more than 13% before investors realized that the news is not as bad as it was presented to them by Internet bloggers.

What’s The story?

Prohost Comments

As we described in previous articles and in several Prohost Letters, both firms, have a checkpoint inhibitor immunotherapy drug that free the immune system T cells from the paralyzing effect induced by the checkpoint protein. Both MRK’s immunotherapy drug Keytruda and BMY’s immunotherapy drug Opdivo inhibit the PD-1 checkpoint, thus enabling the T cells to reenergize, find the cancer cells, target them and neutralize them.

Among the facts related to these two drugs’ efficacy, all the literature explained that these immunotherapy drugs act better and can even provide cures in various cancers when combined with other proper targeted drugs, vaccines, or other checkpoint inhibitors. Most current clinical studies with checkpoint inhibitors aim at testing these drugs in combination with other products in order to fall on the appropriate combinations to be used for various cancers, for same cancers’ various mutations and for patients’ genetic mutations.

This was not what BMY has done this time. The firm tried the drug alone on a difficult-to-treat cancer for the sake of knowledge and for gaining a larger lung cancer market in case it succeeded.

Whether we appreciate what the firm has done, or not, the truth is that the drug has failed in early lung cancer when it was used alone. Otherwise the drug has been tested with several combinations on various cancers and was approved for many already, including kidney cancer, skin cancer, lymphoma and for early lung cancer in combination with Yervoy, which is another approved immunotherapy drug. 

As for MRK, the firm’s stock deserved a rally without the need for bad news from a competitor. Both firms are picked as you see in the Prohost portfolio.

BMY price at the end of the day was $63.28 Down over $12.04, around 15%. In posting this same article today in the morning, we wrongly mention GSK instead of BMY. That’s why we wrote that the stock was trading at $44.59 down only $0.49, which was the price te performance of GSK rather than BMY. So, we apologize and deny that the hysterical selling of the stock has stopped in the morning. 

We still believe though that this news has no impact whatsoever on the value of the Opdivo, which is still the breakthrough, blockbuster checkpoint inhibitor.

It is important noting that although the three approved checkpoint inhibitors (the third is approved for Roche), are not all the existing checkpoint proteins that suppress the capability of the immune system to treat cancer. That’s why we believe that companies such as CompuGen (CGEN)which has discovered several of these checkpoint targets and Agenus (AGEN), which has several checkpoint targets in its inventory will sooner or later be used, and rewarded. In case  this prophesy materializes, the positive impact on these two firms would be huge.

Otherwise, we strictly believe that both MRK and BMY have made history and both stocks are undervalued based on the number of cancers they will be used for and the millions of patients who will be taking it.

The complete text titled, “Plummeted Firms That Offer Good Investment Opportunities Are Filling the Place”, will be the main subject of Prohost Letter #398 that we will post at the end of the week


When this article was posted in the morning, we unintentionally mentioned the GSK symbol instead of BMY – the correct symbol of Bristol-Myers Squibb, which is the main subject of the article. We corrected the mistakes and sincerely apologize for the error.