Bristol Myers Jumps 4% on Alzheimer's Drug Trial Progress
An independent committee recommended the continuation of a late-stage study for a drug treating psychosis in Alzheimer's patients, boosting a key pipeline asset.
Shares of Bristol Myers Squibb (NYSE: BMY) climbed more than 4% on Tuesday after the pharmaceutical giant announced a positive development in its high-stakes pursuit of a treatment for psychosis associated with Alzheimer's disease.
The company's stock rose $2.05, or 4.25%, to close at $50.30 in Tuesday trading, a bright spot for investors in a stock that has trended toward the lower end of its 52-week range of $42.38 to $61.00.
The catalyst for the rally was an update on its ADEPT-2 Phase 3 study for the company's investigational drug aimed at treating psychosis in Alzheimer's patients. According to a company press release, an independent Data Monitoring Committee (DMC) recommended that the late-stage trial proceed without modification following a planned interim analysis.
Such recommendations are critical milestones in drug development. A DMC's role is to periodically review trial data to ensure patient safety and study integrity. A green light to continue suggests the trial has not raised any major safety concerns and is proceeding as planned, a significant hurdle cleared in the notoriously challenging field of neurological drug development.
Developing treatments for Alzheimer's and related conditions has been a difficult and costly endeavor for the pharmaceutical industry, littered with high-profile trial failures. A successful therapy for neuropsychiatric symptoms like psychosis, which are common and debilitating for Alzheimer's patients, would address a significant unmet medical need and represent a multi-billion dollar commercial opportunity.
For Bristol Myers, a company with a market capitalization of just over $100 billion, advancing a major central nervous system asset like this is crucial for its future growth trajectory as it navigates patent expirations on some of its blockbuster drugs. The positive signal from the ADEPT-2 study provides a much-needed boost to its late-stage pipeline.
The market's positive reception, as reported by The Wall Street Journal, reflects the potential upside if the drug ultimately proves successful. Wall Street analysts currently have a consensus price target of $53.05 on BMY, with the majority rating the stock a 'Hold'. Tuesday's news could prompt a re-evaluation of the company's long-term earnings potential.
The development comes on the same day the company highlighted its focus on innovation through other initiatives. Separately, Bristol Myers and Terray Therapeutics announced they had achieved a milestone in their collaboration focused on using artificial intelligence for drug discovery, further signaling the company's commitment to replenishing its R&D pipeline.
Investors will now be closely watching for future updates from the ADEPT-2 study, with the ultimate goal being the submission of the drug for regulatory approval to the FDA and other global health authorities. While the path forward is still long and carries inherent risk, the continuation of the Phase 3 trial marks a significant step forward for Bristol Myers and offers a glimmer of hope for patients and families affected by Alzheimer's disease.