Yes, BMY stock is a buy right now."
I have a position in BMY by virtue of its acquisition of Celgene. I didn't know what to do with the stock so I held.
BMY is up for 2020 despite what's happened with the markets. It also has a 2.84% forward dividend. Zimbler should like that...
May 13, 2020
The No. 1 Pharma Stock Just Crushed Earnings Views — Is BMY Stock A Buy?
by ALLISON GATLIN,Investor's Business Daily
In mid-November, Bristol Myers Squibb (BMY) accomplished what many shareholders opposed: The pharmaceutical company wrapped its $74 billion acquisition of biotech giant Celgene. The bold move, however, comes with a number of caveats that will undoubtedly affect BMY stock.
Now that the Celgene takeover is complete, shareholders are watching to see if Bristol Myers can gain Food and Drug Administration approval for three key drugs. If successful, Celgene investors will receive $9 per Contingent Value Right, or CVR, a provision of the deal.
The timeline for those approvals is tight — the end of March 2021. In late March 2020, Bristol gained FDA approval for the first of those three drugs. The second will be considered in November, and the firm submitted its application for the final drug on March 31.
Meanwhile, investors will watch closely to see how Celgene's sale of psoriasis treatment Otezla to Amgen (AMGN) will impact sales. Pharmaceutical company Bristol Myers is still growing, and in the first quarter posted its best sales increase in years.
So, is now the right time to buy BMY stock?
Bristol Myers Expands Its Drugs Wheelhouse
After acquiring Celgene, the pharmaceutical company's biggest products are cancer treatments known as Revlimid and Opdivo, and a blood thinner called Eliquis. (Eliquis is prohibited for synthetic heart valve recipients. @#%! Unlike warfarin, eliquis has no dietary restrictions. - De)
But during the first quarter, Opdivo sales slipped 2% to $1.77 billion. In the year-earlier period, sales of Opdivo popped 19%. From there, Opdivo sales growth slowed until hitting 1% in the third quarter of 2019. This is the second straight quarter Bristol Myers has posted an Opdivo sales decline.
Meanwhile, sales of Merck's (MRK) Keytruda rocketed 46% in constant currency to $3.28 billion in the first quarter. Keytruda and Opdivo belong to the same class of immuno-oncology drugs. But Keytruda sales are both bigger and outgrowing Opdivo sales.
More promising, sales of Bristol Myers' Eliquis jumped 37% to $2.64 billion in the first quarter.
Overall, first-quarter sales rocketed 82% and earnings jumped 56%. Both measures handily beat the Street's projections. But that strong growth is due, in part, to the takeover of Celgene. Excluding the impact of its Celgene drugs, sales of Bristol Myers' legacy drugs grew almost 13% in the quarter.
Revlimid generated $2.92 billion in first-quarter sales for Bristol Myers. But a key patent protecting the cancer drug is soon to expire, leaving new owner Bristol Myers open to copycat competition.
BMY Stock Fundamentals: Overall Sales Bullish
CAN SLIM rules for investing advise you to seek companies with recent quarterly sales and earnings growth of 20%-25%. With the addition of Celgene's wheelhouse, Bristol Myers hit those metrics in the first quarter. But, excluding Celgene drugs, sales growth was more modest.
In the second quarter, analysts polled by Zacks Investment Research expect Bristol earnings to pop 28.8% to $1.52 per share. Analysts also project $10.13 billion in sales, rocketing 61.4%. The bullish increases are partially related to the acquisition of Celgene.
It will be important to watch fourth-quarter 2020 and first-quarter 2021 growth to make a more apples-to-apples comparison.
What Do Annual Metrics Say About BMY Stock?
Shares of BMY stock popped more than 23% in 2019, but slipped roughly 5% in the first four months of 2020 as coronavirus worries plagued the stock market.
In 2019, sales increased 16% to $26.15 billion — only benefiting from roughly a month of sales from Celgene products. That growth topped fellow pharmaceutical companies Merck and Pfizer (PFE). Last year, Merck's sales grew 11% and Pfizer's revenue slipped 4%.
Analysts expect 2020 to be a strong year of growth for Bristol Myers. They estimate $41.43 billion in sales, an increase of 58.5% following a full year of sales from Celgene products. Earnings are expected to pop 30.5% to $6.12 per share.
But future growth could depend on a notorious Celgene drug. Teva Pharmaceutical (TEVA) is set to launch a generic Revlimid beginning in 2022. Full generic entry is expected in 2026.
Revlimid is a moneymaking machine. In 2018, Revlimid generated $9.67 billion in sales, accounting for 63% of Celgene's revenue.
Revlimid was a sticking point for the BMY stock investors who opposed the Celgene merger. When Revlimid loses patent protection, Bristol Myers will face an onslaught of competition from pharma companies with biosimilars that hope to knock off the blockbuster drug.
BMY Stock Technical Analysis: Shares Top A Buy Point
In midday action on May 12, BMY stock topped a buy point at 63.28 out of a cup-with-handle base.
It's important to note that BMY stock has a Composite Rating of 99 and a Relative Strength Rating of 89.
The CR measures a stock's key technical and fundamental metrics. That CR puts BMY stock in the top 1% of all stocks. The RS Rating tracks the stock's 12-month performance vs. all other stocks on a 1-99 scale. Market-leading stocks have an RS Rating of 80 or higher.
BMY stock ranks first among pharmaceutical companies. It leads Novo Nordisk (NVO), which has a Composite Rating of 92.
Shares of Bristol Myers were above their 50-day and 200-day moving averages in intraday trading on May 12.
Can A Buyout Help The Pharmaceutical Company?
In January 2019, Bristol Myers unveiled its $74 billion plan to take over Celgene. That transaction came to fruition more than 11 months later — hurdling FTC concerns and shareholder opposition to do so.
Together, the drug companies say they have 10 drugs in late-stage testing and eight medicines that could soon launch. The companies say they have 50 drugs in early and midstage testing. Of those, many are in oncology — an important and growing field of research for pharma companies.
Bristol Myers expects the deal to be at least 40% accretive to stand-alone earnings per share in the first full year. The pharmaceutical company also calls for more than $45 billion in free cash flow by year three following the deal's close and a $2.5 billion run-rate in cost synergies by 2022.
In February 2019, several activist shareholders complained the Celgene merger undervalues BMY stock. One accused Bristol Myers of trying to "bet the company." Another said the merger asked holders of BMY stock to accept too much risk. Still, the deal gained shareholder approval in April.
Two months later, Bristol Myers said Celgene would have to divest Otezla before the FTC would bless the merger. Bristol Myers already sells a psoriatic arthritis drug, and owning both could have created a monopoly. In August, Amgen snapped up Otezla for $13.4 billion.
Bristol Myers Must Clinch 3 Approvals
Now, shareholders are watching to see if Bristol Myers can scoop up FDA approval for three key drugs. Under terms of the deal, Celgene shareholders received one share of BMY stock, $50 in cash and a Contingent Value Right, or CVR, for each share of Celgene stock.
The CVR is worth $9 per share if Bristol Myers gains approval of ozanimod in multiple sclerosis, liso-cel in lymphoma and bb2121 in multiple myeloma by March 2021. In late March 2020, the FDA approved ozanimod, now known as Zeposia.
Next, the FDA is slated to consider liso-cel under a priority review in November. That's delayed from a prior review date in August.
On March 31, the company asked for FDA approval of Bluebird Bio (BLUE)-partnered bb2121. That puts the potential approval date around the deadline of March 31, 2021. A speedy priority review would put the review date in late 2020.
Recent News From The Pharma Company
Studies of Opdivo in treating new forms of cancer have been mixed.
In mid-April, Bristol announced positive results from a study of Opdivo and Yervoy in patients with a lung disease known as mesothelioma. The double regimen topped chemotherapy in the Phase 3 test, showing an improvement in overall survival at an interim analysis.
On the same day, a study of Bristol's Opdivo combined with Exelixis's (EXEL) Cabometyx succeeded in a late-stage test of patients with previously untreated kidney cancer.
This month, the FDA approved a combination of Opdivo and Yervoy in patients with a form of liver cancer. But a study of three drugs — Empliciti, Revlimid and dexamethasone — failed to lengthen the amount of time before previously untreated multiple myeloma patients worsened.
In February, the pharmaceutical company unveiled bullish results for a five-year study of Opdivo in patients with advanced kidney cancer. Of those who received Opdivo, 26% were still alive after five years compared to 18% of patients who received another medicine.
In January, Bristol Myers pulled its application for Opdivo plus fellow immuno-oncology drug Yervoy as a first treatment for lung cancer in Europe. The pharma company cited new data from a clinical test. Meanwhile, U.S. officials could approve the combination in May.
So, Is BMY Stock A Buy Right Now?
Yes, BMY stock is a buy right now.
Shares are highly rated and just topped buy point out of a cup-with-handle base. It's best to add shares after a stock has surpassed an entry and is within the 5% chase zone.
Notably, sales and earnings grew in the first quarter, though that's partly due to the addition of Celgene products.
Investors should watch how divesting Otezla will impact Celgene sales. They should keep an ear tuned for the ongoing patent battles surrounding Revlimid. Both factors will now impact BMY stock. Further, updates on regulatory pathways for liso-cel and bb2121 will be important to watch.
http://www.investors.com/news/technology/bmy-stock-buy-now/?src=A00220&yptr=yahoo
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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