Why Bristol Meyers Share Price Has Outperformed its Competitors?
The share price of Bristol-Myers Squibb (NYSE:BMY) in recent years has significantly outperformed those of its peers, included Merck (NYSE:MRK), Pfizer (NYSE:PFE), and Roche (NYSE:RHHBY). As the industry has faced challenges from the makers and generics and biologics, Bristol-Myers Squibb has adeptly managed business units, investing in the mos promising therapies where it is the strongest and backing away from their weaker counterparts. Here are some of the things it has done.
Increased Focus on Cancer And Hepatitis C Drugs
- Bristol-Myers Squibb has shifted its focus from diversified pharmaceuticals to immuno-oncology, and has divested cardiovascular assets
- Immuno-oncology is one of the key growth segments for the pharmaceutical industry. Global immuno-oncology sales are currently meagre but are expected to be $34 B by 2024 [1]. Global Oncology market is expected to grow at a CAGR of 7% from 2014 to 2020 [2].
- Immuno-Oncology drugs are better than traditional cancer therapies as they activate the immune system of the body to fight against cancer cells. Traditional oncology drugs typically are small molecules that cause toxicity to dividing mitotic cells. Traditional oncology drugs have long term side effects as they destroy a lot of healthy cells in the process.
- Bristol-Myers Squibb has also established its presence in Hepatitis C market, which has seen a quantum jump following launch of Gilead Sciences’ drug Sovaldi. The company’s Hepatitis C Franchise revenue grew by 626% in 2015 as compared to 2014 and is expected to grow at a CAGR of 15% by 2020.
Successful Drug Launches During The Period
- Positive Clinical Trial results and successful product launches fueled growth expectations for Bristol-Myers Squibb
What Next?
- Our price estimate for Bristol-Myers Squibb stands at $77, implying a slight 5% premium to the market. We expect revenues to grow at a CAGR of 7% through 2020, with EPS growing 16% annually. The oncology drug Prostvac could be launched by 2017 with an estimated peak sales of $1.3 billion.
- Existing flagship drug Opdivo could reach peak sales of $5.4 B by 2020.
- Should You Pick Bristol Myers Squibb Stock After A 30% Fall Last Year And Q4 Beat?
- Is Bristol Myers Squibb Stock Undervalued At $50?
- Will Bristol Myers Squibb Stock Rebound To Its Pre-Inflation Shock Level of $80?
- Which Stock Is A Better Healthcare Pick – Bristol Myers Squibb Or HCA?
- Will Bristol Myers Squibb Stock Rise Post Q1?
- Is Bristol Myers Squibb Stock A Better Pick Over Its Industry Peer?
Sources
[1] Immuno-Oncology Strategic Insight: Multi-Indication and Market Size Analysis, Global Data, May, 2016
[2] World Oncology/Cancer Drugs Market – Opportunities and Forecasts, 2013 – 2020, Allied Market Research, Feb 2015
Have more questions about Bristol-Myers Squibb? See the links below.
- Three Things To Watch Out For Bristol-Myers Squibb This Year
- What’s Bristol-Myers Squibb’s Revenue And Earnings Breakdown?
- What’s Bristol-Myers Squibb’s Fundamental Value Based On Expected 2015 Results?
- How Has Bristol-Myers Squibb’s Revenue Composition Changed Over The Last 5 Years
- By What Percentage Can Bristol-Myers Squibb’s Revenue & EBITDA Grow In The Next 3 Years?
- How Much Revenues Can Bristol-Myers Squibb’s Phase 3 Pipeline Add By 2020?
- Why We Are Bullish On Bristol-Myers Squibb
- Bristol-Myers Squibb Did Well In 2015, And New Drugs Could Keep The Momentum Going
Notes:
See More at Trefis | View Interactive Institutional Research (Powered by Trefis)