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Will Bristol Myers' (BMY) Efforts to Boost Portfolio be Enough?
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Bristol Myers (BMY - Free Report) has put up a dismal performance in 2023, combating generic competition for some of its key drugs and pipeline setbacks.
In a bid to boost shareholder sentiment, BMY recently announced that its board of directors authorized the repurchase of an additional $3 billion of the company’s common stock under its multi-year share repurchase program.
Consequently, the company’s total outstanding share repurchase authorization is now approximately $5 billion.
We remind investors that in August, BMY entered accelerated share repurchase agreements to repurchase, in aggregate, $4 billion of its common stock.
The company’s board also declared a quarterly dividend of 60 cents per share, up 5.3% from last year’s quarterly rate of 57 cents per share.
BMY had cash, equivalents and marketable debt securities of $8 billion at the end of the third quarter and hence, a buyback was on the cards.
Earlier, in October 2023, Bristol Myers acquired commercial-stage oncology company Mirati Therapeutics, Inc. for $58.00 per share in cash, amounting to a total equity value of $4.8 billion. The total equity value corresponds to an enterprise value of approximately $3.7 billion, which accounts for approximately $1.1 billion of cash held by Mirati.
The acquisition will add Mirati’s lung cancer drug Krazati (adagrasib) to BMY’s strong oncology portfolio. The FDA approved Krazati in December 2022 for the treatment of adult patients with KRAS-mutated locally advanced or metastatic non-small cell lung cancer (“NSCLC”) who have received at least one prior systemic therapy.
Bristol Myers is looking to offset its declining revenues from the blockbuster multiple myeloma drug Revlimid and the blood thinner medicine Eliquis due to generic competition. Pharma/biotech bigwigs are constantly on the lookout to bolster portfolios through mergers & acquisitions (“M&A”) to diversify revenue bases in the face of dwindling sales of high-profile drugs. M&A is back in the spotlight in 2023 after a lull and hence, investors were expecting an acquisition announcement.
The company recently announced that the FDA has approved repotrectinib, a tyrosine kinase inhibitor targeting ROS1 oncogenic fusions, for the treatment of adult patients with locally advanced or metastatic ROS1-positive NSCLC under the brand name Augtyro.
Bristol Myers has also decided to expand its collaboration with Avidity Biosciences, Inc. (RNA - Free Report) . The company announced an upfront cash payment of $60 million to Avidity. BMY will also purchase approximately $40 million of Avidity’s common stock at a price of $7.88 per share.
Despite these efforts, BMY shares have lost 30.3% year to date compared with the industry's decline of 20%.
Image Source: Zacks Investment Research
Bristol Myers and partner 2seventy bio, Inc. recently faced a setback when the FDA informed the companies that the regulatory body would not be able to give a decision on the supplemental Biologics License Application (“sBLA”) for Abecma (idecabtagene vicleucel) by the original target date of Dec 16, 2023.
The sBLA is seeking approval of Abecma for earlier lines of triple-class exposed relapsed or refractory multiple myeloma based on results from the phase III KarMMa-3 study.
The FDA also recently announced that it is investigating the identified risk of T-cell malignancy in patients who received treatment with chimeric antigen receptor (“CAR”) T-cell immunotherapies. These malignancies have been reported in patients treated with almost all products in this class. The investigation comes on the heels of reports received by the FDA of T-cell malignancies in patients who received treatment with BCMA- or CD19-directed autologous CAR T-cell immunotherapies. The malignancy resulted in not just the hospitalization of patients but, in certain cases, death. These reports came from ongoing clinical trials and/or post-marketing adverse event data sources.
The FDA has approved six CAR T cell immunotherapies so far, which include Bristol Myers’ Abecma and Breyanzi (lisocabtagene maraleucel).
Shares were also hit recently due to Bayer’s announcement of the late-stage study, OCEANIC-AF, investigating asundexian compared with direct oral anticoagulant Eliquis (apixaban) in patients with atrial fibrillation (“AF”), being stopped early due to the lack of efficacy. These patients were at a risk of a stroke.
BMY and partner Janssen Pharmaceuticals, Inc. are evaluating milvexian, an investigational oral factor XIa inhibitor, for ischemic stroke, acute coronary syndrome and AF. The failure of Bayer’s cardiovascular study has raised concerns for milvexian.
While the recent efforts by the company to boost its portfolio are encouraging, BMY needs to keep making efforts to offset the decline in Revlimid and Eliquis revenues.
Opdivo maintains momentum for the company and new drugs fare well, too, but the loss of Revlimid revenues will weigh on the top line.
Entrada’s loss per share estimate for 2023 narrowed from $2.07 to 9 cents in the past 60 days. The same for 2024 narrowed from $2.35 to $2.04 during the same time frame.
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Will Bristol Myers' (BMY) Efforts to Boost Portfolio be Enough?
Bristol Myers (BMY - Free Report) has put up a dismal performance in 2023, combating generic competition for some of its key drugs and pipeline setbacks.
In a bid to boost shareholder sentiment, BMY recently announced that its board of directors authorized the repurchase of an additional $3 billion of the company’s common stock under its multi-year share repurchase program.
Consequently, the company’s total outstanding share repurchase authorization is now approximately $5 billion.
We remind investors that in August, BMY entered accelerated share repurchase agreements to repurchase, in aggregate, $4 billion of its common stock.
The company’s board also declared a quarterly dividend of 60 cents per share, up 5.3% from last year’s quarterly rate of 57 cents per share.
BMY had cash, equivalents and marketable debt securities of $8 billion at the end of the third quarter and hence, a buyback was on the cards.
Earlier, in October 2023, Bristol Myers acquired commercial-stage oncology company Mirati Therapeutics, Inc. for $58.00 per share in cash, amounting to a total equity value of $4.8 billion. The total equity value corresponds to an enterprise value of approximately $3.7 billion, which accounts for approximately $1.1 billion of cash held by Mirati.
The acquisition will add Mirati’s lung cancer drug Krazati (adagrasib) to BMY’s strong oncology portfolio. The FDA approved Krazati in December 2022 for the treatment of adult patients with KRAS-mutated locally advanced or metastatic non-small cell lung cancer (“NSCLC”) who have received at least one prior systemic therapy.
Bristol Myers is looking to offset its declining revenues from the blockbuster multiple myeloma drug Revlimid and the blood thinner medicine Eliquis due to generic competition. Pharma/biotech bigwigs are constantly on the lookout to bolster portfolios through mergers & acquisitions (“M&A”) to diversify revenue bases in the face of dwindling sales of high-profile drugs. M&A is back in the spotlight in 2023 after a lull and hence, investors were expecting an acquisition announcement.
The company recently announced that the FDA has approved repotrectinib, a tyrosine kinase inhibitor targeting ROS1 oncogenic fusions, for the treatment of adult patients with locally advanced or metastatic ROS1-positive NSCLC under the brand name Augtyro.
Bristol Myers has also decided to expand its collaboration with Avidity Biosciences, Inc. (RNA - Free Report) . The company announced an upfront cash payment of $60 million to Avidity. BMY will also purchase approximately $40 million of Avidity’s common stock at a price of $7.88 per share.
Despite these efforts, BMY shares have lost 30.3% year to date compared with the industry's decline of 20%.
Image Source: Zacks Investment Research
Bristol Myers and partner 2seventy bio, Inc. recently faced a setback when the FDA informed the companies that the regulatory body would not be able to give a decision on the supplemental Biologics License Application (“sBLA”) for Abecma (idecabtagene vicleucel) by the original target date of Dec 16, 2023.
The sBLA is seeking approval of Abecma for earlier lines of triple-class exposed relapsed or refractory multiple myeloma based on results from the phase III KarMMa-3 study.
The FDA also recently announced that it is investigating the identified risk of T-cell malignancy in patients who received treatment with chimeric antigen receptor (“CAR”) T-cell immunotherapies. These malignancies have been reported in patients treated with almost all products in this class. The investigation comes on the heels of reports received by the FDA of T-cell malignancies in patients who received treatment with BCMA- or CD19-directed autologous CAR T-cell immunotherapies. The malignancy resulted in not just the hospitalization of patients but, in certain cases, death. These reports came from ongoing clinical trials and/or post-marketing adverse event data sources.
The FDA has approved six CAR T cell immunotherapies so far, which include Bristol Myers’ Abecma and Breyanzi (lisocabtagene maraleucel).
Shares were also hit recently due to Bayer’s announcement of the late-stage study, OCEANIC-AF, investigating asundexian compared with direct oral anticoagulant Eliquis (apixaban) in patients with atrial fibrillation (“AF”), being stopped early due to the lack of efficacy. These patients were at a risk of a stroke.
BMY and partner Janssen Pharmaceuticals, Inc. are evaluating milvexian, an investigational oral factor XIa inhibitor, for ischemic stroke, acute coronary syndrome and AF. The failure of Bayer’s cardiovascular study has raised concerns for milvexian.
While the recent efforts by the company to boost its portfolio are encouraging, BMY needs to keep making efforts to offset the decline in Revlimid and Eliquis revenues.
Opdivo maintains momentum for the company and new drugs fare well, too, but the loss of Revlimid revenues will weigh on the top line.
Zacks Rank and Stock to Consider
BMY currently has a Zacks Rank #3 (Hold).
A better-ranked stock in the overall healthcare sector is Entrada Therapeutics (TRDA - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Entrada’s loss per share estimate for 2023 narrowed from $2.07 to 9 cents in the past 60 days. The same for 2024 narrowed from $2.35 to $2.04 during the same time frame.