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Bristol Myers (BMY) Up 20.4% YTD: Will the Momentum Continue?

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Shares of Bristol Myers (BMY - Free Report) have jumped 20.4% in the year so far against the industry’s decline of 27.4%. In fact, it is one of the few biotech companies which saw its share price grow amid increasing volatility.

The performance of Eliquis and Opdivo and encouraging pipeline progress have impressed investors.

Eliquis has delivered a stellar performance in the year so far, propelled by increases in share in the novel oral anticoagulant market. It is the leading oral anticoagulant drug, and the company continues to experience growth in both the Eliquis brand and the market.

The performance of the immuno-oncology drug Opdivo, approved for multiple cancer indications, has also revived after a slowdown. Opdivo is one of the top revenue generators for BMY, and the continued label expansion of the drug for additional indications should further boost its growth potential.

The FDA recently approved a new, first-in-class, fixed-dose combination of PD-1 inhibitor Opdivo (nivolumab) and relatlimab (novel LAG-3-blocking antibody) administered as a single intravenous infusion for the treatment of adult and pediatric patients 12 years of age or older with unresectable or metastatic melanoma (a kind of skin cancer) under the brand name Opdualag. 

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The FDA also approved Opdivo (injection for intravenous use) in combination with fluoropyrimidine- and platinum-containing chemotherapy as a first-line treatment for adult patients with unresectable advanced or metastatic esophageal squamous cell carcinoma (ESCC) regardless of PD-L1 status. Concurrently, Opdivo, in combination with Yervoy (ipilimumab), was approved for the same indication by the FDA.

The regulatory body also approved Camzyos (mavacamten, 2.5 mg, 5 mg, 10 mg, 15 mg capsules) for the treatment of adults with symptomatic New York Heart Association (NYHA) class II-III obstructive hypertrophic cardiomyopathy (obstructive HCM) to improve functional capacity and symptoms. Per the company, Camzyos is the first and only FDA-approved allosteric and reversible inhibitor selective for cardiac myosin that targets the underlying pathophysiology of obstructive HCM.

Last year, Bristol Myers obtained 20 approvals for new medicines and additional indications and formulations of currently marketed drugs in major markets, including regulatory approvals of Breyanzi and Abecma in hematology malignancies. Bristol Myers is also developing deucravacitinib, its TYK2 inhibitor, to treat psoriasis and other immune-mediated diseases. The successful development of the same will strengthen the company’s immunology portfolio.

The approval of these new drugs and label expansion of existing drugs will add an incremental revenue stream, which should boost growth in the coming quarters. The pipeline progress is steadily impressive, and strategic collaborations will further expand the portfolio.

Bristol Myers recently announced that it will acquire clinical-stage precision oncology company Turning Point Therapeutics for $76.00 per share, which equates to a total transaction value of $4.1 billion.

The acquisition will add Turning Point’s lead asset, repotrectinib, a next-generation, potential best-in-class tyrosine kinase inhibitor (TKI) targeting the ROS1 and NTRK oncogenic drivers of non-small cell lung cancer (NSCLC) and other advanced solid tumors.

The deal should strengthen Bristol Myers’ position in the oncology space, particularly in the lucrative lung cancer arena.

However, the company’s top revenue generator Revlimid is facing generic competition that will significantly impact the top line. Competition is also stiff for Opdivo from the likes of Merck’s (MRK - Free Report) Keytruda. The drug, approved for various oncology indications, is the key driver for Merck.

Bristol Myers currently carries a Zacks Rank #3 (Hold).  A better-ranked stock in the biotech space is Alkermes (ALKS - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ALKS’ loss estimates for 2022 have narrowed to 3 cents from a loss of 14 cents in the past 60 days. Alkermes surpassed earnings in all the trailing four quarters, the average being 350.48%.


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