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Abbvie/Bristol-Myers Inks Deal to Develop Therapeutic Cancer

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AbbVie (ABBV - Free Report) and Bristol-Myers Squibb Company (BMY - Free Report) entered into a deal to evaluate the combination of AbbVie's investigational antibody drug conjugate, ABBV-399, and Bristol-Myers Squibb's immune-oncology drug, Opdivo (nivolumab), in c-Met overexpressing non-small cell lung cancer (NSCLC).

Currently, the combination is in a phase I study that evaluates the patients for second line treatment who have failed one prior line of chemotherapy. But the specific terms of the deal were not disclosed. Notably, AbbVie is the sponsor conducting the trial.

AbbVie’s shares have outperformed the industry year to date. The stock has been up 39.7% compared with the industry’s gain of 17% in the same time frame.

We remind investors that Opdivo is approved for varied indications in the EU and the United States. The drug has also received approvals for several indications including melanoma, head and neck, lung, kidney and blood cancer.

ABBV-399 is an anti-c-Met antibody drug conjugate that targets both MET-amplified and c-Met-overexpressing tumors. It is currently being developed to treat advanced solid tumors.

In fact, Opdivo continues to be launched globally on approvals and label expansions. Label expansion into additional indications would give the product access to a higher patient population and increase the commercial potential of the drug, significantly.  

Markedly, Opdivo is being studied in combination with Bristol-Myers’ other drug Yevroy.  In the melanoma indication, the Opdivo+Yervoy regimen is contributing to growth in both Opdivo and Yervoy. Also, the drug became the first PD-1 inhibitor to be approved for a hematological malignancy – classical Hodgkin lymphoma in the United States (May 2016) and the EU (November 2016).

In the second quarter of 2017, Opdivo generated revenues of $1.19 billion, up 42% from the year-ago period.

Zacks Rank & Stocks to Consider

AbbVie currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in health care sector include Alexion Pharmaceuticals, Inc. and Regeneron Pharmaceuticals, Inc. (REGN - Free Report) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alexion Pharmaceuticals’ earnings per share estimates have moved up from $5.49 to $5.60 for 2017 and from $6.82 to $7.06 for 2018 over the last 60 days. The company delivered positive earnings surprises in all the trailing four quarters, with an average beat of 11.12%. The share price of the company has increased 16.8% year to date.

Regeneron’s earnings per share estimates have increased from $12.84 to $14.99 for 2017 and from $15.32 to $16.65 for 2018 over the last 60 days. The company pulled off positive earnings surprises in two of the trailing four quarters, with an average beat of 10.11%. The share price of the company has increased 17.9% year to date.

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