Bristol-Myers Squibb Company (BMY): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


Bristol-Myers' first quarter 2014 adjusted earnings of $0.46 per share beat the Zacks Consensus Estimate by 2 cents. Adjusted earnings were 12% above the year-ago figure driven by lower costs. Net sales (including the diabetes business) slipped 1% to $3.8 billion. Key oncology drugs performed very well in the quarter. Bristol-Myers has been trying to offset the declining sales of some of its important products by bringing in new products through in-licensing deals. We are positive on Bristol-Myers decision to sell its underperforming diabetes portfolio. We are also impressed by the company's efforts to develop its pipeline. We believe that the stock is fairly valued at current levels with limited scope for appreciation and hence retain our Neutral recommendation.


N.Y.-based Bristol-Myers Squibb Company is a major producer and distributor of pharmaceuticals and other healthcare related products. The company manufactures and sells branded pharmaceutical drugs such as Baraclude, for hepatitis B virus (HBV), Sustiva for HIV and Erbitux for cancer. In Feb 2014, Bristol Myers sold its global diabetes business to AstraZeneca in its bid to evolve as a specialty care-oriented company. With the global diabetes business sold off, the company's primary focus will be on its existing portfolio of oncology, neurosciences, immunology, cardiovascular and virology.

In late 2009, Bristol-Myers sold its interest (83.1% stake) in infant formula maker Mead Johnson. The divestiture has enabled Bristol-Myers to operate as a fully independent biopharmaceutical company, focusing exclusively on its Pharmaceuticals segment.

Apart from the spin-off, Bristol-Myers acquired Medarex Inc. for $2.1 billion in 2009. The acquisition has helped strengthen its product portfolio since the company has acquired the UltiMAb Human Antibody Development System, which produces high-affinity, fully human antibodies for use in a broad range of therapeutic areas, including immunology and oncology. Bristol-Myers has also gained access to Medarex's next-generation Antibody-Drug Conjugate (ADC) technology, which is a novel and proprietary platform that could open new fields in oncology drug development. Furthermore, Bristol-Myers acquired full ownership rights to Yervoy (ipilimumab), which was launched in the U.S. in Apr 2011.

Bristol-Myers, which has entered into a challenging phase following the genericization of Plavix, reported revenues of $16.4 billion in 2013, down 7% from 2012 levels.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: ADC , BMY

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