Bristol-Myers Squibb (NYSE: BMY ) has shown that it is serious about becoming a specialty biopharmaceutical company with an immuno-oncology focus. Although it has some promising compounds both on the market and in the pipeline, competition from Roche (NASDAQOTH: RHHBY ) and Merck (NYSE: MRK ) are likely to complicate matters.The commitmentIn November 2013, Bristol-Myers cut R&D staff, severing nearly all discovery work in diabetes, hepatitis C, and neuroscience. The cuts to the crowded and/or risky indications will largely benefit the company's immuno-oncology operations.Late last year, Bristol-Myers furthered its commitment. Shortly before diabetes treatment Farxiga won approval by the FDA, Bristol-Myers essentially cut its ties to the therapy. On December 19, 2013, AstraZeneca (NYSE: AZN ) announced that it would acquire Bristol-Myers' stake in their diabetes partnership . Clearly, Bristol-Myers isn't just paying lip-service to restructuring its operations around this promising field of cancer therapy.Oncology bets aside, the early sale could prove positive for Bristol-Myers. It received $2.7 billion upfront and another $1.4 billion in milestones along with additional sales royalties. Farxiga will face some tough competition with Johnson & Johnson's Invokana. In the near term, it may also compete with Eli Lilly's empagliflozin, another SGLT2 drug currently under FDA review.Reasons for the excitementThere is plenty of evidence that the immune system recognizes cancerous cells and is capable of eliminating them. In many types of cancer, malignant progression is coupled with severe immunosuppression. In other words, the growth and spreading of tumors usually occurs while the immune system is looking the other way. Investigators once believed tumor cells hid themselves. More recently, researchers understand that tumors effectively blind immune cells to their presence.Traditional cancer therapies assault normal healthy cells as well cancerous ones. Antibody-drug conjugates, or ADCs, are a more effective way of precision-bombing cancer cells with chemotherapy payloads. Even ADCs inflict some collateral damage to normal tissues.What makes drugs like Bristol-Myers's Yervoy and nivolumab so exciting, is that they lack toxic payloads. Although they represent no direct threat to cancer cells, they effectively suppress tumors by removing blindfolds, and allowing the immune system to do its job.
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