Bristol Myers Squibb (BMY) released promising data for several cancer drugs in late May, leading BMY stock into a breakout.
The company released the data ahead of the American Society of Clinical Oncology meeting in June. The studies deal primarily with Bristol’s immuno-oncology drugs Opdivo and Yervoy, and a new drug with Bluebird Bio (BLUE) called Abecma. In response, BMY stock surged to its highest point since February 2020.
That 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.
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 May 27, BMY stock had risen 6.6% 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 $46.2 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, according to MarketSmith.com. Shares spent two days flirting with their entry before definitively falling below their buy point. Still, on May 27, Bristol Myers stock was above both its 50-day moving average and 200-day moving average.
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 eighth among the 35 pharmaceutical companies in the Medical-Ethical Drugs industry group based on CR. The group itself is lowly ranked. It ranks No. 151 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.
In late May, the FDA approved Opdivo as a treatment for some esophageal or gastroesophageal patients. The company 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?
No, BMY stock is not a buy right now.
The pharmaceutical stock briefly topped its buy point, but shares were below their entry on May 27. 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.
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.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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