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Bristol-Myers Squibb Company (BMY - Analyst Report) entered into a collaboration with Celgene Corporation (CELG - Analyst Report) to asses the safety, tolerability and preliminary efficacy of a cocktail therapy including its high potential immuno-oncology drug Opdivo (nivolumab, a PD-1 immune checkpoint inhibitor) and Celgene’s oncology treatment Abraxane in a phase I study. The study, which will commence in the final quarter of the year, will evaluate multiple cancer forms. Celgene will be responsible for conducting the study.

Bristol-Myers stated in its press release that while patients suffering from HER-2 negative breast cancer will be treated with a combination of Abraxane and Opdivo, Eli Lilly’ and Company's (LLY - Analyst Report) Gemzar will also be added to the above combination in patients with pancreatic adenocarcinoma. Meanwhile, patients suffering from non-small cell lung cancer will be treated with a combination of Opdivo, Abraxane and chemotherapy drug carboplatin.

Financial details pertaining to the pact were not revealed. We expect investor focus to remain on this oncology deal involving two major players in the biopharmaceutical space.

We note that Opdivo holds immense potential in the lucrative as well as highly sought after immuno-oncology space. The treatment was approved in Japan in July this year for treating patients with unresectable melanoma.

Following the Japanese approval, Opdivo became the first PD-1 immune checkpoint inhibitor to gain approval. Ono Pharmaceutical has the rights to commercialize the treatment in Japan, as per a 2011 agreement with Bristol-Myers. Bristol-Myers intends to seek U.S. approval for its immuno-oncology drug by Sep 30, 2014.

Bristol-Myers is already seeking FDA approval for Opdivo in the third-line squamous cell non-small cell lung cancer indication. The company initiated a rolling submission to the FDA for a Biologics License Application for Opdivo. The rolling submission will allow Bristol-Myers to complete portions of the application which needs to be submitted and reviewed by the FDA on an ongoing basis. Bristol-Myers expects to complete the application by Dec 31, 2014.

Opdivo is also being studied in other oncology indications as well, such as renal cell carcinoma, head and neck cancer, glioblastoma and non-Hodgkin lymphoma.

While Bristol-Myers carries a Zacks Rank #3 (Hold), Celgene is a Zacks Ranked #2 (Buy) stock. Gilead Sciences (GILD - Analyst Report) is better-ranked in the biopharma space, sporting a Zacks Rank #1 (Strong Buy).

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