Why Oncology Accounts For 65% Of Bristol-Myers Squibb’s Value

by Trefis Team
Bristol-Myers Squibb
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Bristol-Myers Squibb’s (NYSE:BMY) Oncology business accounted for 35% of the company’s overall revenues in 2016, but we estimate that the segment accounts for 65% of the company’s overall value. Take a look at our interactive dashboard of BMY’s  business, which shows how the oncology segment will perform in the coming years, compared to the company’s other segments.

Oncology Segment Will Account For Larger Percentage of Revenues Going Forward

We expect Oncology drugs to account for nearly 70% of BMY’s total revenue by the end of our forecast period in 2024, compared to 35% in 2016.

Other Segments Likely To See Sales Declines Amid Patent Expiry, Biosimilar Competition

Within Oncology, Opdivo Is The Key Growth Driver

We estimate Opdivo And Empliciti together will account for over 55% of the company’s revenues by the end of our forecast period. This can be attributed to Opdivo’s expansion in different therapeutic areas, ongoing phase 3 trials, and its timeline to patent expiry.

Opdivo Key FDA Approvals:

2014: Advanced Melanoma
2015: Lung Cancer, Metastatic Renal Cell Carcinoma
2016: Metastatic Melanoma, Hodgkin Lymphoma, Head and Neck Cancer
2017: Metastatic Urothelial Carcinoma

Looking Forward

We await for more clarity on the Checkmate – 227 trials, where Opdivo is being tested in combination with Yervoy for first-line non-small cell lung cancer treatment. The company’s management, during its Q3 2017 earnings conference call, stated that it expects to see the final results for the combination in the first half of 2018, but didn’t provide any more details on the trial. Earlier this year, the Checkmate – 214 trials showed encouraging results for the same combination for the treatment of kidney cancer. It should be noted that the drug’s patent is protected until 2026-2027 and it is unlikely to see any significant drop in sales until it approaches patent expiry.

Our current price estimate for Bristol-Myers Squibb stands at $54, implying a discount of over 10% to the current market price.

See our complete analysis for Bristol-Myers Squibb

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