We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Collaboration With Bain Capital Help BMY Advance Its Pipeline?
Read MoreHide Full Article
Key Takeaways
Bristol Myers and Bain Capital formed a new biotech focused on autoimmune disease therapies.
BMY will out-license five immunology candidates and retain a 20% equity stake in the new firm.
Bain will invest $300M while BMY earns milestones, royalties, and a board seat via its research chief.
Bristol Myers (BMY - Free Report) recently collaborated with Bain Capital to create a new independent biopharmaceutical company, which will be focused on developing new therapies for autoimmune diseases that address significant unmet needs of patients.
Bain Capital will make a $300 million funding in the new company, while BMY will out-license five immunology candidates.
Among these, three are clinical stage candidates and two are phase I-ready pipeline candidates. Each of these targets promising mechanisms in autoimmune diseases. Out of these, the most advanced assets are afimetoran, an oral, potential best-in-class TLR7/8 inhibitor that is currently being studied in a phase II study for systemic lupus erythematosus (SLE), and BMS-986322, an oral TYK2 inhibitor, which successfully established proof-of-concept in a positive plaque psoriasis phase II study.
Other licensed assets include BMS-986326, a novel, potential best-in-class, IL2 fusion protein that is currently being studied in phase I studies for SLE and atopic dermatitis, and BMS-986481 and BMS-986498, two phase I-ready biologics targeting the IL18 and IL10 pathways, respectively.
Per the terms, BMY will retain a nearly 20% equity stake in the new company and be entitled to royalties and milestones tied to the success of each asset.
In addition, Robert Plenge, MD, PhD, executive vice president and chief research officer at BMY, will be part of the new company’s board of directors.
BMY is currently transitioning its portfolio as its key drugs face generic competition, thereby impacting top-line growth.
In the immunology space, BMY’s Sotyktufaces 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.
This apart, oncology is a key focus area for BMY. space. However, BMY faces competition from large pharma companies like Merck (MRK - Free Report) in this space. The immuno-oncology space is dominated by Merck’s blockbuster drug Keytruda (pembrolizumab).
Keytruda is approved for several types of cancer and alone accounts for around 50% of 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 17.2% year to date against the industry’s growth of 0.6%.
BMY Underperforms Industry
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 7.59x forward earnings, lower than its mean of 8.51x and the large-cap pharma industry’s 15.11X.
Image Source: Zacks Investment Research
The bottom-line estimate for 2025 has moved down to $6.33 from $6.76 in the past 30 days and that for 2026 has declined 2 cents.
Image: Shutterstock
Will Collaboration With Bain Capital Help BMY Advance Its Pipeline?
Key Takeaways
Bristol Myers (BMY - Free Report) recently collaborated with Bain Capital to create a new independent biopharmaceutical company, which will be focused on developing new therapies for autoimmune diseases that address significant unmet needs of patients.
Bain Capital will make a $300 million funding in the new company, while BMY will out-license five immunology candidates.
Among these, three are clinical stage candidates and two are phase I-ready pipeline candidates. Each of these targets promising mechanisms in autoimmune diseases. Out of these, the most advanced assets are afimetoran, an oral, potential best-in-class TLR7/8 inhibitor that is currently being studied in a phase II study for systemic lupus erythematosus (SLE), and BMS-986322, an oral TYK2 inhibitor, which successfully established proof-of-concept in a positive plaque psoriasis phase II study.
Other licensed assets include BMS-986326, a novel, potential best-in-class, IL2 fusion protein that is currently being studied in phase I studies for SLE and atopic dermatitis, and BMS-986481 and BMS-986498, two phase I-ready biologics targeting the IL18 and IL10 pathways, respectively.
Per the terms, BMY will retain a nearly 20% equity stake in the new company and be entitled to royalties and milestones tied to the success of each asset.
In addition, Robert Plenge, MD, PhD, executive vice president and chief research officer at BMY, will be part of the new company’s board of directors.
BMY is currently transitioning its portfolio as its key drugs face generic competition, thereby impacting top-line growth.
Competition for BMY’s Key Therapeutic Areas
BMY’s growth portfolio primarily comprises Opdivo, Orencia, Yervoy, Reblozyl, Opdualag, Abecma, Zeposia, Breyanzi, Camzyos, Sotyku, Krazatiand others.
In the immunology space, BMY’s Sotyktufaces 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.
This apart, oncology is a key focus area for BMY. space. However, BMY faces competition from large pharma companies like Merck (MRK - Free Report) in this space. The immuno-oncology space is dominated by Merck’s blockbuster drug Keytruda (pembrolizumab).
Keytruda is approved for several types of cancer and alone accounts for around 50% of 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 17.2% year to date against the industry’s growth of 0.6%.
BMY Underperforms Industry
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 7.59x forward earnings, lower than its mean of 8.51x and the large-cap pharma industry’s 15.11X.
Image Source: Zacks Investment Research
The bottom-line estimate for 2025 has moved down to $6.33 from $6.76 in the past 30 days and that for 2026 has declined 2 cents.
Image Source: Zacks Investment Research
BMY currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.