Opdivo: The Hard Way to Birth (B)

Eric Bouteiller, Luis Liu, Wu Pei

Research output: Other contributionCase Studies


This case tells the saga of the famous anticancer drugs Opdivo and Yervoy and their contribution to creating a new treatment category of immuno-oncology. In 1987, the French immunologist Pierre Golstain discovered and cloned the CTLA-4 gene. In 1992, Tasuku Honjo, a professor at Kyoto University in Japan, found a protein called PD-1 on the surface of T cells in mice. These two findings laid the initial foundation for immune checkpoint theory and checkpoint blockade therapy. Many pharmaceutical companies and scientists have invested much time, money, and energy to develop a new generation of tumor immunotherapy on these two cornerstones. However, developing a new drug is fraught with uncertainty, and any progress is a matter of trial and error. Opdivo and Yervoy's "predecessors" have endured many such fates; luckily, they survived through scientists' best efforts each time. Since 2007, the multinational pharmaceutical company BMS has launched a "String of Pearls" M&A strategy. This strategy seeks to gradually integrate external innovation and expand its own capabilities through small and medium acquisitions, avoiding large acquisitions. BMS has cast a wide net over small and medium-sized research and development (R&D) biopharmaceutical firms. They don't care that most of the beads they catch are small or even worthless as long as there are one or two large beads with commercial value. In 2009 BMS launched a takeover bid for Medarex, a mid-sized pharmaceutical company. BMS was interested in the CTLA-4 antibody project ipilimumab (the "predecessor" of Yervoy) in the Medarex R&D pipeline. A Medarex scientist (Nils Lonberg) was more bullish on the PD-1 antibody project Nivolumab (the "predecessor" of Opdivo), which was in phase I clinical trials. He reminded Medarex's management to allocate more value to this project in negotiations. However, Nivolumab, which needed to be taken more seriously, was almost half bought and given to BMS. Because of the considerable uncertainty in the R&D of new drugs, the acquisition is often like a game of guessing beads. Everything is in a blind box waiting to be opened. What kind of pearls will BMS get after opening the blind box?
Original languageEnglish
Number of pages3
Publication statusPublished - 1 Jun 2023

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Field Case

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Published by

China Europe International Business School


  • uncertainty in pharmaceutical R&D
  • risk management in R&D
  • M&A strategy
  • portfolio management
  • valuation in technology purchases

Case studies discipline

  • Strategy
  • Others

Case studies industry

  • Health Care Services


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