Citi Reports On FDA Approval For BMY

Citi is maintaining its Buy rating and its $30 price target on Bristol-Myers Squibb BMY following the FDA's approval of the company's Nulogix. In its report, Citi writes, “The FDA approved Nulogix (belatacept) for the prevention of kidney transplant rejection as a result of the company resolving manufacturing issues at its manufacturing facility in Manati, Puerto Rico. We view the Nulogic opportunity as small, but highly profitable. We model $350M in worldwide 2015E sales, slightly higher than consensus of ~$300M. With a very small sales force detailing the product, we expect operating margins by 2015E for Nulogix of at least 60%, significantly higher than the company average of ~29%. We estimate that the product could contribute $0.09 to EPS (4% of total) in 2015E. The resolution of the manufacturing issues also increases the probability of a favorable FDA action on the Orencia subcutaneous injectable filing, which has an FDA action date of August 4th, 2011.” BMY closed yesterday at $27.42.