This Analyst Downgrades Bristol-Myers Squibb, Cautions Amid Product Launch And Revenue Concerns

BofA Securities downgraded Bristol-Myers Squibb & Co BMY, noting that initially, the analyst believed that Bristol's loss of exclusivity (LOEs) for drugs like Eliquis and Opdivo was widely understood and it was anticipated that new product lineup would compensate for these losses and boost market value. 

However, the actual sales outcomes of recent product launches have been varied. 

Despite an overall growth of approximately 87% in 2022 and an estimated 81% in 2023 for the new product portfolio, there hasn't been any standout product that significantly increased sales projections.

The analyst downgraded BMY shares to Neutral from Buy and lowered the price target to $60 from $68. 

Also Read: Upward Trajectory For Biotech/Pharma M&A: Sector Trends Towards Pre-Pandemic Levels, Forecasts Positive For 2024.

The product differentiation profile across the launch portfolio is compelling, but including an impact from announced new deals, launch portfolio growth appears steady, from $3.7 billion (8% of 2023e total revenues) to $18 billion (35% of 2027e total revenues) that may not be enough to get to a compelling LT revenue/ adjusted EPS growth profile. 

BofA analyst is impressed by Bristol's gene/cell therapy abilities, extending beyond Abecma and Breyanzi's commercial success. 

However, the analyst acknowledges that these fields are intensely competitive, with companies like Johnson & Johnson JNJ, Gilead Sciences Inc GILD, and other small to medium-sized biotech firms developing advanced next-generation products.

Price Action: BMY shares are down 0.59% at $52.46 on the last check Wednesday.