Investors panicked back in October when Bristol-Myers Squibb admitted that a request for additional data from a key lung cancer trial had pushed back an FDA decision. And perhaps rightly so.

Thursday, the company said it had voluntarily pulled its application for an Opdivo-Yervoy pairing in a subset of patients with previously untreated non-small cell lung cancer, citing a need for more data. The withdrawal pushes back the combo's potential arrival on the market, which archrival Merck is rapidly penetrating with its own combination of Keytruda and chemo.

While the move represents a setback for Bristol in its quest to win an approval in patients with high levels of biomarker TMB, or tumor mutational burden, it’s not an entirely unexpected one. Last fall, the company unveiled new analysis showing the survival benefit in patients with high TMB and low TMB appeared "quite similar (based on hazard ratios compared to chemotherapy)," as Credit Suisse analyst Vamil Divan put it.

"This leads us to wonder why regulators would approve the regimen strictly for patients with high TMB as per the current filing," he wrote at the time, adding that a "potential approval in first-line NSCLC may still be 12-plus months away."

Now, Bristol says it needs more evidence to assess the duo’s impact on survival, and that’ll come from final data from its Checkmate-227 trial, set to arrive in the first half of this year. "Since these data from Checkmate -227, Part 1a, will not be available within the review cycle of the current application the company decided to withdraw," BMS said in a statement.

On the New Jersey drugmaker’s fourth-quarter conference call, held shortly after the Opdivo news hit, analysts had plenty of questions about the development—including whether it was fair to surmise that the FDA wasn’t on board with the TMB biomarker. That suggestion, from Evercore ISI’s Umer Raffat, met with pushback from execs, though, who defended their push toward TMB.

"TMB will continue to be important … in the way we approach patients with cancer. I just think it’s early days in trying to understand that," company R&D chief Tom Lynch said on the call. While the pharma giant has yet to generate data establishing the relationship between TMB and survival, "much of that, I would argue, is around the way these studies have been designed," Lynch said, adding that "I think it remains a very important part of how we move forward."

Critics, though, aren’t so sure. As some have pointed out, even if Bristol can ultimately snag an indication in TMB-high patients, uptake would depend on doctors routinely testing for the biomarker—something they don’t currently do.

Meanwhile, analysts have long predicted that a Bristol failure in the first-line lung cancer market—considered immuno-oncology’s most important in terms of sales, thanks to its sheer size—could make the company vulnerable to a takeover. Accordingly, Wolfe Research’s Tim Anderson asked execs on the call whether the takeover possibility played into the company’s recent $74 billion decision to bag Big Biotech Celgene.

CEO Giovanni Caforio’s answer? "I hope that through many of the discussions we’ve had since the announcement … we’ve been able to communicate the strong strategic rationale of the combination and the value it generates for shareholders and patients," he said. "We are creating a great company with complementary franchises of marketed products, an opportunity to launch six new products in the next 24 months, and doubling the size of our early pipeline."

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