Bristol-Myers Oncology Growth Potential Remains High

Bristol-Myers Squibb Co BMY “has named three independent directors to its board amid reports that JANA Partners and Carl Icahn have taken stakes in BMY,” said Argus’ David Toung in a note, while reiterating a Buy rating on the company, with a price target of $75.

Board Changes

The analyst mentioned that Bristol Myers Squibb has also raised speculation that the company would be more open to increasing shareholder value with the addition of three independent board members, following discussions with activist investor, JANA Partners.

JANA Partners had disclosed in a filing in mid-February that it owned Bristol-Myers Squibb stock worth $226 million, representing 0.2 percent interest.

“Bristol-Myers has also attracted interest from Carl Icahn, according to reports in Bloomberg and other news outlets, who took a stake in BMY after the announcement of the new board appointments and a $2 billion accelerated stock repurchase program,” Toung stated.

The size of Icahn’s stake in the company is as yet undisclosed.

Related Link: Wall Street's M&A Chatter From February 21

Oncology Drug

The analyst expects the company’s oncology drug, Opdivo, to face heightened competition in 2017, although the drug is also expected to gain additional approvals over the next 22 months, adding to its 10 indications at present.

“BMY also expects data readouts from Phase 2 and 3 clinical trials that could lead to FDA filings for expanded indications, including first-line positioning in non-small-cell lung cancer, melanoma, renal cell carcinoma, and hepatocellular carcinoma,” Toung explained.

“We continue to like the company’s long-term prospects and the growth potential of its oncology portfolio,” the analyst added.