Shares in Bristol-Myers Squibb dropped more than 20 percent on shock news that its flagship immunotherapy Opdivo failed to hit targets in a late-stage trial with lung cancer patients.

The Phase III CheckMate-026 trial, which involved 541 patients with previously-untreated advanced non-small cell lung cancer who either received Opdivo (nivolumab) or chemotherapy, failed to meet its primary endpoint of extending progression-free survival in those whose tumours expressed PD-L1 on at least five percent of cells.

BMS chief executive Giovanni Caforio said the firm is disappointed with the study findings, but remains committed to improving patient outcomes through its "comprehensive development programme", which includes the ongoing Phase III CheckMate-227 study, exploring the potential of the combination of Opdivo plus Yervoy for PD-L1 positive patients, and Opdivo plus Yervoy, or Opdivo plus chemotherapy in PD-L1 negative patients.

While there has been a stream of ground-breaking results in trials with cancer immunotherapies of late, only select groups of patients seem to benefit, with researchers finding it difficult to expand their reach.

"My take-home message is that in a minority of patients, immunotherapy is a great drug and it's better than chemotherapy…But that's not true for the majority of patients, so I still think we have some work cut out for us," said Mark Socinski, executive medical director of the Florida Hospital Cancer Institute in Orlando, who also served on the steering committee for the trial, reports the Wall Street Journal.

BMS' strategy was to include on a broad subset of patients in the trial, while that of Merck for its rival immunotherapy Keytruda () focused on a much narrower target group with higher levels of the PD-L1 biomarker. Earlier this year, data from the Keynote-024 study showed a progression-free survival benefit in patients with tumours expressing PD-L1 on at least 50 percent of cells taking Merck's drug.

BMS still has high hopes for its CheckMate-227 study, which is exploring the potential of combining Opdivo plus Yervoy for PDL-1 positive patients, and Opdivo plus Yervoy, or Opdivo plus chemotherapy in PD-L1 negative patients.

"We believe that combination therapy may provide an important opportunity to address the needs of every patient with first-line lung cancer," it said.

Opdivo is already approved in the US for melanoma, NSCLC, renal cell carcinoma and classical Hodgkin lymphoma, and pulled in sales of $840 million in the second quarter.