Ipilimumab: A Drug You Can Bet On

Bristol-Myers Squibb (BMS) is waiting for an important decision by the FDA and likely this will come by Mar 26, 2011, 2 weeks from now. We all know that BMS is facing a huge revenue gap due to significant patent losses of several billion dollar drugs. A success of an important drug will certainly provide some cushion to the losses. That's why the fate of ipilimumab is so important for BMS. Ipilimumab (Ipi) is a monoclonal antibody discovered by Medrex that was bought up by BMS. The initial indication for ipi waiting for the FDA's decision is advanced melanoma. This is the most deadly cancer, for which there has been no new drug approved in the past 50 years. Ipi may cause really serious side effects, which can be fatal such as GI perfection or serious autoimmune hepatitis etc. However, when a patient is facing a death that is guaranteed to come in about 6-9 months, will he or she really care about such potential side effects and give up the possibility of life-saving chance? Although ipi is not working for everyone, it is really amazing when it works. Per reports, some patients experienced something truly incredible such as disappearance of tumor mass on the skin or a total meltdown of the brain metastases (confirmed by the brain biopsy). I have always had a great faith on ipi and have no doubt that it will be approved some day. I think the day is coming finally. According to the published results, ipi has been shown to be able to prolong the survival of patients with end stage melanoma, which has never been demonstrated for any other drugs. I become more confident due to the fact that the FDA has canceled the scheduled ODAC, an expert advisory committee for oncology drugs when the FDA is unsure about something about a drug. To me this means the FDA is now sure about its approvability of ipilimumab. Can you imagine that the FDA will not approve a drug known to prolong the life of cancer patients?

I think there is a great chance to successfully bet the approval of ipilimumab in about 2 weeks. If approved, I think there will be some material upside of the BMS stock prices (BMY). Although it won't be  a 50% jump due to the size of BMS, I think something around 5-10% is still very likely. A profit of this magnitude in 2 weeks is very attractive to me. It would be much more profitable if you can buy its call options. This is what I have done: I'm now owning BMY Apr $26 call options and waiting for the announcement.