Bristol Myers Squibb
could be on track to break out.
The drugmaker said Monday that its current pipeline of drugs could generate $25 billion in annual revenue, enough to replace lost revenue from expired patents by 2030.
Bristol (ticker: BMY) also boosted its share-buying program by $2 billion.
The company spent the last year in acquisition mode, with a $74 billion deal for Celgene in 2019 and a $13 billion deal for MyoKardia more recently. With $22 billion of cash on hand, there’s room for more of that, according to Bristol CEO Giovanni Caforio.
“We will continue to look for midsize bolt-on deals that further strengthen our object to grow the company into the second half of the decade,” Caforio said at JPMorgan’s healthcare conference on Monday.
The shares have barely budged over the last year, rising just 0.26% while the
index has gained more than 16%. But they have rallied 51% since a low in March.
The stock also trades at a discount to its peers, with a forward multiple of 8.7 compared to
(PFE) 12.8, and
(MRK) 13.6, according to FactSet.
Commenting on the drug pipeline at JPMorgan’s virtual conference, management cited three drugs and a group of treatments that could generate $4 billion each in sales. They include the anemia drug Reblozyl, experimental heart medicine mavacamten, psoriasis treatment decravacitinib, and Bristol’s various cancer-cell treatments. Other drugs would make up the remaining $9 billion.
Raymond James, which rates the stock Overweight, said in a note that the company targets debt reduction of $4 billion this year, and forecast 2020 revenue meets expectations on the high end of the range.
This year revenue could be $41.5 billion to $42 billion, which meets Raymond James’ estimate for $42 billion, the note said. Compound annual growth could be in the low-to-single digits, against Raymond James’ estimated 4% to 8%.
The company guided on free cash flow for this year through 2023 of $45 billion to $50 billion, against Raymond James’ estimate of $52 billion.
The company’s psoriasis drug shows promise in treating a variety of auto-immune ailments, including psoriatic arthritis, ulcerative colitis, Crohn’s disease, and lupus, according to the presentation at JPMorgan’s conference.
Bristol also has an early pipeline of new oncology, immunology, and hematology treatments.
Bristol ended Tuesday’s session up 0.7%.
Write to Liz Moyer at [email protected]