Key recent clinical pipeline developments have prompted an analyst at Truist Securities to turn bullish on pharma giant Bristol-Myers Squibb Company BMY.
The Bristol-Myers Squibb Analyst: Gregg Gilbert upgraded Bristol-Myers Squibb from Hold to Buy and increased the price target from $66 to $74.
The Bristol-Myers Squibb Takeaways: Since October, when Truist initiated coverage of Bristol-Myers Squibb with a Hold rating, the company has received approvals for Abecma, a cell therapy for multiple sclerosis; Breyanzi, a cell-based gene therapy for large B-cell lymphoma; and also reported positive late-stage results for a psoriasis drug and the cancer drug relatlimab, Gilbert said in the upgrade note.
"Our valuation construct yields a theoretical value of ~$30/share for the 150 programs, which represents the second highest value per share in the group," the analyst said.
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The company has sounded bullish on the data from the pivotal trial for its psoriasis drug deucravacitinib and said it is confident of establishing it as a first-line oral treatment of choice for moderate to severe plaque psoriasis, he said.
The investigational asset has been proved superior to Otezla, which is a $2.2-billion drug and is growing, Gilbert said.
The analyst now models sales of $2 billion for deucravacitinib by 2026 given Otezla's success and the potential for deucravacitinib to be a more effective oral option.
Bristol-Myers Squibb is developing deucravacitinib for additional indications that could significantly expand its market potential, including ulcerative colitis and Crohn's disease, he said.
The company's positive Phase 2/3 topline readout for Opdivo in combination with relatlimab, an anti-LAG-3 antibody, for the first-line treatment of melanoma represented the first Phase 3 data to be reported for a LAG-3 antibody, Gilbert said.
Truist added relatlimab sales to its model to give the company credit for this novel immuno-oncology asset, the analyst said.
The firm expects a 2022 launch schedule, with sales reaching $500 million by 2027.
The company is testing relatlimab in numerous additional solid tumor settings, Gilbert said.
BMY Price Action: Bristol-Myers Squibb shares were trading 0.64% higher to $63.09.
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