Bristol Myers Squibb (BMY) said a cancer drug called Breyanzi outperformed the standard treatment in patients with a form of lymphoma. The news in June sent BMY stock soaring.
When compared with chemotherapy plus a stem cell transplant, Breyanzi led to several improvements for patients with previously treated large B-cell lymphoma, Bristol Myers said on June 10. Chemo followed by a stem cell transplant is the „gold standard treatment for these patients.“
Also this month, Bristol said regimens containing Opdivo helped improve overall survival in patients with a form of esophageal cancer. Those patients typically receive chemotherapy. The company also received European approval for an Opdivo/Yervoy combo in patients with a form of lung cancer.
The news helped reverse a downfall that began in late April after first-quarter measures lagged the Street’s forecast. Also in April, a panel of experts recommended the Food and Drug Administration revoke the accelerated approval for Opdivo as a second option for liver cancer patients.
This followed the committee’s recommendation to retain the approval for Keytruda, a cancer drug from Merck (MRK) for the same use.
Bristol also recently wrapped the $13.1 billion takeover of MyoKardia, a heart-disease biotech.
So, is now the right time to buy BMY stock?
Bristol Myers Expands Its Drugs Wheelhouse
After buying Celgene, the pharmaceutical company’s biggest products are cancer treatments known as Revlimid and Opdivo, and a blood thinner called Eliquis.
In the first quarter, Opdivo sales fell 3% to $1.72 billion. Meanwhile, Keytruda sales surged 19% to nearly $3.9 billion. So, Keytruda sales aren’t just outpacing Opdivo in growth, they’re also bigger. Last year, Opdivo brought in $6.99 billion while Keytruda sales were $14.38 billion.
More bullishly for BMY stock, revenue from its two biggest drugs increased in the first quarter. Revlimid sales inched 1% higher to $2.94 billion. Sales of Eliquis jumped 9% to $2.89 billion.
Total revenue edged up 3% year over year to $11.07 billion. Adjusted earnings of $1.74 per share rose 1%. Both measures missed expectations.
After acquiring Celgene, Bristol Myers had five quarters of particularly bullish sales and profit growth. But now that Celgene is fully digested, the impact is more muted on financials, taking BMY stock out of CAN SLIM rules for investing. Investors are advised to seek companies with recent quarterly sales and earnings growth of 20%-25%.
For the second quarter, analysts polled by FactSet expect Bristol Myers earnings to rise 17% to $1.91 a share. They predict $11.35 billion in sales, up 12%.
What Do Annual Metrics Say About BMY Stock?
BMY stock ended 2020 with a 3.4% decline. As of midday trading on June 10, BMY stock had risen 8.7% this year.
Last year, sales soared 63% to $42.52 billion, benefitting from a year of Celgene drug sales.
For 2021, analysts call for Bristol Myers to earn $7.46 per share, up 16%, on $46.19 billion in sales, up 9%. In the future, however, analysts are watching for generic versions of cancer drug Revlimid. Teva Pharmaceutical (TEVA) is set to launch a generic in 2022.
BMY Stock Technical Analysis: Shares Break Out
BMY stock broke out of a flat base with a buy point at 67.26 on May 20, MarketSmith.com shows. But shares later tumbled as much as 6.2% below that entry. That nearly triggered a sell rule when a stock falls 7%-8% below its buy point. Shares also fell below their 50-day line, a sign of weakness.
Both factors reversed on June 10. BMY stock hopscotched over its 50-day moving average and landed back in a buy zone. The stock was also above its 200-day moving average on June 10.
BMY stock has a Composite Rating of 61 and a Relative Strength Rating of 35.
The CR measures a stock’s key technical and fundamental metrics. That CR puts BMY stock in the top one-half 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 seventh among the 35 pharmaceutical companies in the Medical-Ethical Drugs industry group based on CR. The group itself is lowly ranked. It ranks No. 136 out of 197 industry groups tracked by Investor’s Business Daily.
Recent News From The Pharma Company
As part of the Celgene buyout, Bristol Myers promised to pay $9 per Contingent Value Right owned by former Celgene shareholders. However, the FDA failed to approve cancer drug liso-cel by a year-end 2020 deadline. That killed the payout for Celgene shareholders.
Another ding on BMY stock: An independent panel recommended the FDA revoke the approval of Opdivo as a second option in liver cancer treatment. But the panel upheld the accelerated approval for Merck’s Keytruda for the same use.
Meanwhile, the panel suggested revoking the approval for Keytruda as a third option for patients with a type of stomach cancer. The panel upheld other accelerated approvals, however. That included bladder-cancer approvals for Keytruda and Roche’s (RHHBY) Tecentriq and approval for Tecentriq in triple-negative breast cancer.
But Bristol Myers remains sunny on other opportunities.
On June 2, the European Commission approved a combination of Opdivo and Yervoy for patients with a form of lung cancer. The FDA also approved Opdivo for some esophageal or gastroesophageal patients and Zeposia for moderately to severely active ulcerative colitis.
Bristol also unveiled promising test results for Opdivo plus Yervoy in patients with lung cancer and melanoma, and for Abecma in multiple myeloma.
Bristol and Bluebird’s Abecma gained approval on March 26. Formerly known as ide-cel, Abecma is the first CAR-T treatment to go after the B-cell maturation antigen, or BCMA.
This quarter, the company plans to ask for FDA approval of MyoKardia’s heart drug mavacamten. Bristol calls it a potential first-in-class cardiovascular medicine for the treatment of obstructive hypertrophic cardiomyopathy, a chronic and potentially fatal heart disease.
So, Is BMY Stock A Buy Right Now?
Yes, BMY stock is a buy right now.
Shares returned to a buy zone on June 10 and managed to break through their 50-day line — both signs of strength. It’s best to add shares after a stock has surpassed a buy point and is within the 5% chase zone. Investors are advised to sell when a stock falls 7%-8% below its entry.
But sales and earnings tacked on low single-digit percentage growth in the first quarter. That’s not enough to label BMY stock a CAN SLIM stock.
To find the best stocks to buy or watch, check out IBD Stock Lists and other IBD content. Make sure to also keep tabs on stocks to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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