Bristol-Myers Squibb Company
) ended the trading session on Mar 12, 2013 by hitting its
52-week high of $38.22. The long-term expected earnings growth
rate for this stock is 5.3%.
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On Jan 24, 2013 Bristol-Myers reported higher-than-expected
earnings in the final quarter of 2012 on the back of lower costs.
However, adjusted earnings in the final quarter of 2012 were 11%
below the year-ago earnings.
The year-over-year decline in earnings was due to reduced sales
of hypertension treatment Avapro/Avalide and blood-thinner
Plavix, which went off-patent in the US in Mar 2012 and May 2012,
respectively. Bristol-Myers co-developed the drugs with
Bristol-Myers is looking to strengthen its product portfolio by
launching new drugs to make up for the loss of revenues following
the genericization of key drugs, especially Plavix. The company
met with a fair amount of success in this respect in 2012. Many
new products were approved in 2012. The approval of Eliquis for
reducing the risk of strokes and systemic embolism in patients
suffering from nonvalvular atrial fibrillation (NVAF) in the US,
EU and Japan has boosted the stock.
In Jul 2012, Erbitux' label was successfully expanded in the US
when the FDA cleared the drug as a first-line treatment in
combination with FOLFIRI in patients with wild-type KRAS,
epidermal growth factor receptor (EGFR)-expressing metastatic
colorectal cancer. The EU approval of Forxiga for treating type
II diabetes patients is another significant event for
Bristol-Myers in 2012. Many important products were approved in
2011 as well. We expect Bristol-Myers to continue launching new
products in 2013 as well. Given the strong product portfolio, we
expect Bristol-Myers to easily achieve its 2013 earnings guidance
of $1.78-$1.88 per share.
Moreover, Bristol-Myers is looking to combat the generic threat
hanging over its key drugs through partnering deals and
acquisitions. In Feb 2013, Bristol-Myers announced that it has
inked a deal with Reckitt Benckiser Group plc for three years. As
per the terms of the deal, Reckitt Benckiser will get exclusive
rights to commercialize several over-the-counter drugs in
Bristol-Myers' portfolio targeting Latin American markets
(primarily Mexico and Brazil). In Aug 2012, Bristol-Myers
acquired Amylin Pharmaceuticals, Inc. in a bid to diversify its
business to combat the generic threat and bolster its position in
the lucrative diabetes market. We believe that such strategic
deals/acquisitions will help Bristol-Myers augment its product
portfolio/pipeline, thereby driving the top line.
Other Stocks to Consider
Bristol-Myers, a large-cap pharma company, carries a Zacks Rank
#3 (Hold). Stocks such as
Eli Lilly and Company
) appear to be more attractive in the large-cap pharma space.
Both the stocks carry a Zacks Rank #2 (Buy).