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Bristol Myers Loses 20.7% in 3 Months: Buy, Sell or Hold the Stock?
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Shares of Bristol Myers (BMY - Free Report) have lost 20.7% in the past three months compared with the industry’s decline of 9.6%. The stock has also underperformed the sector and the S&P 500 during this period.
While the year started on a positive note and BMY was faring well (outperforming the market), the stock has been on the downslide for the past couple of months.
BMY Underperforms Industry, Sector & S&P 500 Index
Image Source: Zacks Investment Research
Even though the first-quarter performance was better-than-expected and BMY raised its annual revenue guidance, the stock declined thereafter, probably reflecting broader market concerns and investors’ skepticism on BMY’s growth prospects.
Let us analyze Bristol Myers’ fundamentals in such a scenario to help you deal with the stock going forward:
Generic Competition for BMY’s Top Drugs: A Headwind
Legacy Portfolio is being adversely impacted due to continued generic impact on Revlimid, Pomalyst, Sprycel and Abraxane, as well as the U.S. Medicare Part D redesign effect.
Among these, blood thinner medicine Eliquis, for which BMY has a worldwide co-development and co-commercialization agreement with pharma giant Pfizer (PFE - Free Report) , is the biggest contributor to the top line.
Eliquis sales were down 4% in the first quarter due to the impact of Medicare Part D redesign in the United States. The company expects sales to steadily increase in the second half of 2025 due to the elimination of the coverage gap.
BMY is Banking on Newer Drugs to Stabilize Revenue Base
BMY is depending on newer drugs like Opdualag, Reblozyl and Breyanzi to stabilize its revenue base as its legacy drugs face generic competition. Thalassemia drug Reblozyl, for which BMY has a collaboration agreement with Merck (MRK - Free Report) , has put up a stellar performance since its approval, driven by strong growth in the first and second-line treatment of myelodysplastic syndromes (MDS)- associated anemia. The drug should contribute significantly in the coming decade.
Revenue growth has been solid for the leading immuno-oncology drug Opdivo, driven primarily by volume growth.
The FDA had earlier granted approval to Opdivo Qvantig (nivolumab and hyaluronidase-nvhy) injection for subcutaneous use. The European Commission (EC) recently approved the perioperative regimen of neoadjuvant Opdivo and chemotherapy followed by surgery and adjuvant Opdivo for the treatment of resectable non-small cell lung cancer at high risk of recurrence in adult patients whose tumors have PD-L1 expression ≥1%. The company recently received EC approval for the subcutaneous formulation of Opdivo across multiple solid tumor indications.
Sales of CAR T cell therapy, Breyanzi, also continue to gain traction from the approval of new indications and expanded manufacturing capacity. Camzyos has also witnessed strong global uptake in obstructive HCM.
BMY earlier won FDA approval for xanomeline and trospium chloride (formerly KarXT), an oral medication for the treatment of schizophrenia, in adults, under the brand name Cobenfy.
The approval broadens BMY’s portfolio. Cobenfy represents the first new pharmacological approach to treating schizophrenia in decades. This drug is expected to contribute meaningfully to BMY’s top line in the coming years.
Recent Pipeline Setbacks Weigh on BMY’s Shares
BMY has experienced a few pipeline setbacks in recent months, which negatively impacted its share price.
The late-stage ODYSSEY-HCM study evaluating cardiovascular drug Camzyos for the treatment of adult patients with symptomatic New York Heart Association (“NYHA”) class II-III non-obstructive hypertrophic cardiomyopathy did not meet its dual primary endpoints.
The top-line results from the phase III ARISE study on schizophrenia drug Cobenfy were also disappointing. The study is evaluating the efficacy and safety of the drug as an adjunctive treatment to atypical antipsychotics in adults with inadequately controlled symptoms of schizophrenia. Treatment with Cobenfy as an adjunctive demonstrated a 2.0-point reduction in the Positive and Negative Syndrome Scale total score compared to placebo with an atypical antipsychotic at week six. However, this data did not reach the threshold for statistical significance for the primary endpoint.
BMY’s High Debt Ratio Worrisome
While BMY’s strategy of acquiring companies with promising drugs/candidates is encouraging, it has resulted in colossal debt to finance these acquisitions.
As of March 31, 2025, the company had cash and equivalents of $12.1 billion and a long-term debt of $46.1 billion.
BMY’s Valuation and Estimate Revision
Going by the price/earnings ratio, BMY’s shares currently trade at 7.16x forward earnings, lower than its mean of 8.56x and the large-cap pharma industry’s 14.70x.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 EPS has moved up to $6.89 from $6.75 in the 60 days, while that for 2026 has remained unchanged at $6.08.
BMY’s Estimate Movement
Image Source: Zacks Investment Research
Stay Invested in BMY Stock
Large biotech companies are generally considered safe havens for investors interested in this sector. Drugs like Reblozyl, Breyanzi, Camzyos and Opdualag have enabled BMY to stabilize its revenue base amid generic competition for its legacy drugs. Approval of additional new drugs and label expansion of top drugs should further diversify its pipeline.
However, generic competition is a major headwind for the company and the new drugs will take some time to offset this steep decline. The recent pipeline setbacks weigh on the stock. We recommend prospective investors to wait and watch for the time being.
For investors already owning the stock, staying invested would be a prudent move. The company’s attractive dividend yield (5.29%) is a strong reason for existing investors to stay invested.
Image: Shutterstock
Bristol Myers Loses 20.7% in 3 Months: Buy, Sell or Hold the Stock?
Shares of Bristol Myers (BMY - Free Report) have lost 20.7% in the past three months compared with the industry’s decline of 9.6%. The stock has also underperformed the sector and the S&P 500 during this period.
While the year started on a positive note and BMY was faring well (outperforming the market), the stock has been on the downslide for the past couple of months.
BMY Underperforms Industry, Sector & S&P 500 Index
Image Source: Zacks Investment Research
Even though the first-quarter performance was better-than-expected and BMY raised its annual revenue guidance, the stock declined thereafter, probably reflecting broader market concerns and investors’ skepticism on BMY’s growth prospects.
Let us analyze Bristol Myers’ fundamentals in such a scenario to help you deal with the stock going forward:
Generic Competition for BMY’s Top Drugs: A Headwind
Legacy Portfolio is being adversely impacted due to continued generic impact on Revlimid, Pomalyst, Sprycel and Abraxane, as well as the U.S. Medicare Part D redesign effect.
Among these, blood thinner medicine Eliquis, for which BMY has a worldwide co-development and co-commercialization agreement with pharma giant Pfizer (PFE - Free Report) , is the biggest contributor to the top line.
Eliquis sales were down 4% in the first quarter due to the impact of Medicare Part D redesign in the United States. The company expects sales to steadily increase in the second half of 2025 due to the elimination of the coverage gap.
BMY is Banking on Newer Drugs to Stabilize Revenue Base
BMY is depending on newer drugs like Opdualag, Reblozyl and Breyanzi to stabilize its revenue base as its legacy drugs face generic competition. Thalassemia drug Reblozyl, for which BMY has a collaboration agreement with Merck (MRK - Free Report) , has put up a stellar performance since its approval, driven by strong growth in the first and second-line treatment of myelodysplastic syndromes (MDS)- associated anemia. The drug should contribute significantly in the coming decade.
Revenue growth has been solid for the leading immuno-oncology drug Opdivo, driven primarily by volume growth.
The FDA had earlier granted approval to Opdivo Qvantig (nivolumab and hyaluronidase-nvhy) injection for subcutaneous use. The European Commission (EC) recently approved the perioperative regimen of neoadjuvant Opdivo and chemotherapy followed by surgery and adjuvant Opdivo for the treatment of resectable non-small cell lung cancer at high risk of recurrence in adult patients whose tumors have PD-L1 expression ≥1%. The company recently received EC approval for the subcutaneous formulation of Opdivo across multiple solid tumor indications.
Sales of CAR T cell therapy, Breyanzi, also continue to gain traction from the approval of new indications and expanded manufacturing capacity. Camzyos has also witnessed strong global uptake in obstructive HCM.
BMY earlier won FDA approval for xanomeline and trospium chloride (formerly KarXT), an oral medication for the treatment of schizophrenia, in adults, under the brand name Cobenfy.
The approval broadens BMY’s portfolio. Cobenfy represents the first new pharmacological approach to treating schizophrenia in decades. This drug is expected to contribute meaningfully to BMY’s top line in the coming years.
Recent Pipeline Setbacks Weigh on BMY’s Shares
BMY has experienced a few pipeline setbacks in recent months, which negatively impacted its share price.
The late-stage ODYSSEY-HCM study evaluating cardiovascular drug Camzyos for the treatment of adult patients with symptomatic New York Heart Association (“NYHA”) class II-III non-obstructive hypertrophic cardiomyopathy did not meet its dual primary endpoints.
The top-line results from the phase III ARISE study on schizophrenia drug Cobenfy were also disappointing. The study is evaluating the efficacy and safety of the drug as an adjunctive treatment to atypical antipsychotics in adults with inadequately controlled symptoms of schizophrenia. Treatment with Cobenfy as an adjunctive demonstrated a 2.0-point reduction in the Positive and Negative Syndrome Scale total score compared to placebo with an atypical antipsychotic at week six. However, this data did not reach the threshold for statistical significance for the primary endpoint.
BMY’s High Debt Ratio Worrisome
While BMY’s strategy of acquiring companies with promising drugs/candidates is encouraging, it has resulted in colossal debt to finance these acquisitions.
As of March 31, 2025, the company had cash and equivalents of $12.1 billion and a long-term debt of $46.1 billion.
BMY’s Valuation and Estimate Revision
Going by the price/earnings ratio, BMY’s shares currently trade at 7.16x forward earnings, lower than its mean of 8.56x and the large-cap pharma industry’s 14.70x.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 EPS has moved up to $6.89 from $6.75 in the 60 days, while that for 2026 has remained unchanged at $6.08.
BMY’s Estimate Movement
Image Source: Zacks Investment Research
Stay Invested in BMY Stock
Large biotech companies are generally considered safe havens for investors interested in this sector. Drugs like Reblozyl, Breyanzi, Camzyos and Opdualag have enabled BMY to stabilize its revenue base amid generic competition for its legacy drugs. Approval of additional new drugs and label expansion of top drugs should further diversify its pipeline.
However, generic competition is a major headwind for the company and the new drugs will take some time to offset this steep decline. The recent pipeline setbacks weigh on the stock. We recommend prospective investors to wait and watch for the time being.
For investors already owning the stock, staying invested would be a prudent move. The company’s attractive dividend yield (5.29%) is a strong reason for existing investors to stay invested.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.