Bristol-Myers Squibb has suffered a $21 billion self-inflicted wound. That's how much value investors wiped off the pharma firm on Friday morning after its trial to greatly broaden the use of one of its most promising cancer drugs failed. It was an unnecessarily risky move for Bristol, whose immunotherapy has been outselling Merck's. The stumble will allow its more cautious rival to clean up.
Bristol's Opdivo and Merck's Keytruda are shaping up to be the biggest blockbusters ever for the pharma industry. The drugs have proven to be effective against forms of lung, skin, kidney and other cancers by cutting the brakes on the immune system's response. In the second quarter, Bristol sold $840 million of Opdivo – almost seven times as much as the same period last year.