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BMY Focuses on Label Expansion of Drugs: Will This Revive Growth?
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Key Takeaways
BMY's Sotyktu met its primary endpoint in a late-stage trial for active psoriatic arthritis in adults.
The drug is already approved for moderate-to-severe plaque psoriasis in several global markets.
BMY relies on Opdivo expansion and Sotyktu trials to offset losses from legacy drugs facing generics.
Bristol Myers (BMY - Free Report) is focused on developing drugs with presence in oncology, hematology, immunology, cardiovascular, neuroscience and other therapeutic areas. BMY depends on label expansion of approved drugs and approval of new drugs to stabilize its revenue base as its legacy drugs (Revlimid, Pomalyst, Sprycel and Abraxane) face generic competition.
The company recently announced that the late-stage study on Sotyktu (deucravacitinib), an oral, selective tyrosine kinase 2 (TYK2) inhibitor, in adults with active psoriatic arthritis met its primary endpoint.
The drug is already approved in numerous countries around the world for the treatment of adults with moderate-to-severe plaque psoriasis. BMY is also evaluating Sotyktu in late-stage studies for the treatment of Sjögren's syndrome and systemic lupus erythematosus.
However, Sotyktu faces stiff competition from Amgen’s (AMGN - Free Report) Otezla in the psoriasis space. Notably, Amgen acquired global commercial rights to Otezla from erstwhile Celgene (now part of Bristol-Myers). Amgen is also evaluating Otezla in additional indications.
Last month, the European Commission (“EC”) approved the subcutaneous formulation of Opdivo (nivolumab) across multiple solid tumor indications. The EC had earlier approved a perioperative regimen of neoadjuvant Opdivo and chemotherapy followed by adjuvant Opdivo for resectable, high-risk non-small cell lung cancer with PD-L1 Expression ≥1%.
Opdivo is a key drug in BMY’s Growth Portfolio. The FDA had earlier approved Opdivo plus Yervoy as a first-line treatment for adult patients with unresectable or metastatic hepatocellular carcinoma.
While the label expansion of Opdivo is positive, the immuno-oncology space is dominated by pharma giant Merck’s (MRK - Free Report) blockbuster drug Keytruda (pembrolizumab).
Keytruda is approved for several types of cancer and alone accounts for around 50% of its MRK’s pharmaceutical sales. Merck is currently working on different strategies to drive long-term growth of Keytruda.
BMY’s Price Performance, Valuation and Estimates
Shares of Bristol Myers have lost 8.4% year to date against the industry’s growth of 1.2%.
Image Source: Zacks Investment Research
From a valuation standpoint, BMY is trading at a discount to the large-cap pharma industry. Going by the price/earnings ratio, BMY’s shares currently trade at 7.80x forward earnings, lower than its mean of 8.55x and the large-cap pharma industry’s 15.71X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings per share has moved up to $6.85 from $6.78 in the past 60 days, while that for 2026 has moved south.
Image: Shutterstock
BMY Focuses on Label Expansion of Drugs: Will This Revive Growth?
Key Takeaways
Bristol Myers (BMY - Free Report) is focused on developing drugs with presence in oncology, hematology, immunology, cardiovascular, neuroscience and other therapeutic areas. BMY depends on label expansion of approved drugs and approval of new drugs to stabilize its revenue base as its legacy drugs (Revlimid, Pomalyst, Sprycel and Abraxane) face generic competition.
The company recently announced that the late-stage study on Sotyktu (deucravacitinib), an oral, selective tyrosine kinase 2 (TYK2) inhibitor, in adults with active psoriatic arthritis met its primary endpoint.
The drug is already approved in numerous countries around the world for the treatment of adults with moderate-to-severe plaque psoriasis. BMY is also evaluating Sotyktu in late-stage studies for the treatment of Sjögren's syndrome and systemic lupus erythematosus.
However, Sotyktu faces stiff competition from Amgen’s (AMGN - Free Report) Otezla in the psoriasis space. Notably, Amgen acquired global commercial rights to Otezla from erstwhile Celgene (now part of Bristol-Myers). Amgen is also evaluating Otezla in additional indications.
Last month, the European Commission (“EC”) approved the subcutaneous formulation of Opdivo (nivolumab) across multiple solid tumor indications. The EC had earlier approved a perioperative regimen of neoadjuvant Opdivo and chemotherapy followed by adjuvant Opdivo for resectable, high-risk non-small cell lung cancer with PD-L1 Expression ≥1%.
Opdivo is a key drug in BMY’s Growth Portfolio. The FDA had earlier approved Opdivo plus Yervoy as a first-line treatment for adult patients with unresectable or metastatic hepatocellular carcinoma.
While the label expansion of Opdivo is positive, the immuno-oncology space is dominated by pharma giant Merck’s (MRK - Free Report) blockbuster drug Keytruda (pembrolizumab).
Keytruda is approved for several types of cancer and alone accounts for around 50% of its MRK’s pharmaceutical sales. Merck is currently working on different strategies to drive long-term growth of Keytruda.
BMY’s Price Performance, Valuation and Estimates
Shares of Bristol Myers have lost 8.4% year to date against the industry’s growth of 1.2%.
Image Source: Zacks Investment Research
From a valuation standpoint, BMY is trading at a discount to the large-cap pharma industry. Going by the price/earnings ratio, BMY’s shares currently trade at 7.80x forward earnings, lower than its mean of 8.55x and the large-cap pharma industry’s 15.71X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings per share has moved up to $6.85 from $6.78 in the past 60 days, while that for 2026 has moved south.
Image Source: Zacks Investment Research
BMY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.