Morningstar | BMY Updated Forecasts and Estimates from 27 Jul 2018
We are leaving our fair value estimate for Bristol unchanged after the firm reported strong second-quarter results that exceeded both our and consensus expectations, but the firm also announced a surprising rejection for a first-line renal cancer label expansion for Opdivo in Europe. The mixed quarterly update was buoyed by strong drug sales growth from both cardiovascular drug Eliquis and Opdivo, offset by declines in older drugs, and hepatitis C drugs facing increased competition. Overall, the continued progress with strong sales of currently marketed drugs combined with advancements in the pipeline reinforce our wide moat rating for the firm.We believe the strong sales for Eliquis (up 40% in the quarter) will continue at a slightly slower pace as the drug takes more share from the older atrial fibrillation drug warfarin. Based on improved efficacy and side effects over warfarin, we expect Eliquis to take close to 10% more share from warfarin and post annual sales over $10 billion by 2023.
On the immuno oncology front, Opdivo posted strong gains in the quarter, up 36% year over year and 10% sequentially. We model decelerating growth for the drug, as we expect Merck's Keytruda will take lung cancer patients away from Opdivo given the strong positioning Keytruda has in the first-line setting while Opdivo is relegated to the second-line setting. However, the recent approval in first-line renal cancer (in combination with Yervoy) in the U.S., as well as strong entrenchment in melanoma should help mitigate the competitive pressures facing Opdivo in lung cancer. In a surprising move, Europe rejected Opdivo in combination with Yervoy for first-line renal cancer despite strong clinical data supporting an overall survival benefit of almost 37% over Sutent. The European regulators wanted an additional monotherapy arm of Opdivo to make sure the combination was needed. We slightly reduced our projections for the drugs based on this announcement.
For a deeper dive into the outlook for Opdivo and competitive immuno oncology drugs, please see our report titled "Overall Immuno-oncology Market Underappreciated, Supporting Undervalued Wide-Moat Firms Roche, Merck and Bristol-Myers."
Bristol-Myers Squibb is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of biopharmaceutical products. The company's products are sold worldwide, primarily to wholesalers, specialty distributors, retail pharmacies, hospitals, government entities and the medical profession. The company manufactures products in the United States and Puerto Rico and has manufacturing operations in two foreign countries. The company has products in the following therapeutic classes: hematology, oncology, cardiovascular and immunology. The company's pharmaceutical products include chemically-synthesized or small molecule drugs and products produced from biological processes, called biologics.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.