The firm’s big money-making drug, Revlimid (acquired when it bought Celgene a few years back), which treats a cancer of plasma cells called multiple myeloma, is facing increasing generic competition.
Given throttles on generics volume in the U.S. and various agreements in Europe, Revlimind sales should “only” gradually decline into 2026, when generic restrictions end. That’s actually good news, putting the company in the position of being able to roll out new drugs over time to make up lost Revlimid sales, which likely peaked last year at $12.8 billion.
For investors, it could be a chance to buy into Bristol-Myers at value, with shares trading hands around 10 times last year’s earnings, compared to the current pharma stock PE of 30.
Just being cheap doesn’t make a stock a buy, but Bristol-Myers believes it has two just-approved drugs that should be contributing more than $8 billion in sales by decade’s end: Opdualag, a fixed-dose combination drug to treat unresectable or metastatic melanoma in people 12 and older; and Camzyos, for treating symptomatic obstructive hypertrophic cardiomyopathy.
Management says there are another two drugs in its pipeline that will generate $4 billion in sales by 2030, including Opdivo, which may end up being the biggest — it treats a number of different cancers that may allow it to top $10 billion in annual sales down the road.
Bristol-Myers’ pipeline was refreshed by the aforementioned $74 billion buy of Celgene in 2019, which should continue to give it new medicines involving blood cancers for years to come. Earnings should advance at mid-single-digit rates this year and next, with the 2.9% dividend yield adding to the attractiveness.
Technically, BMY isn’t the fastest moving stock, but it could be entering a long-term leg higher. Shares broke over resistance in the highs 60s in February, cracking a ceiling that has blocked BMY since the 2018, and it’s now testing all-time highs from 2016.
Moreover, after the persistent rally since the November low, BMY has leveled off a bit, including a little shakeout after last week’s earnings report. We’re OK taking a swing at it here with a relatively tight stop.