Citi Upgrades Bristol-Myers Squibb (BMY) to Buy

December 10, 2008 8:58 AM EST

Citi upgrades Bristol-Myers Squibb (NYSE: BMY) from Hold to Buy.

Citi analyst says, "We project three-year incremental pharmaceutical revenue of ~$3.4 billion in 2011. The largest contributors to incremental revenues are core in-line products Plavix and Abilify, which account for 25% and 32% of incremental pharma sales. We believe the street is under estimating the contribution from the approval of Abilify in the treatment of resistant depression, but could also be underestimating the competitive threat from LLY/Daiichi Sankyo's Effient (prasugrel)...We expect BMY's product mix to shift to faster growing, higher margin biologic/specialty products. Currently marketed drugs in this category would include Abilify for schizophrenia, Reyataz and Sustiva for HIV, Orencia for rheumatoid arthritis, Sprycel for CML, Ixempra for breast cancer, etc. Drugs in the pipeline for BMY in this division include ipilimumab for metastatic melanoma, belatacept for organ transplant, saxagliptin for diabetes and apixaban for ACS/atrial fibrillation. In total, we expect the contribution of this segment to total sales to increase from 33% in 2008 to 67% in 2015."

Bristol-Myers Squibb Company (BMS) is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of pharmaceuticals and other healthcare-related products. During the year ended December 31, 2007, the Company had three segments: Pharmaceuticals, Nutritionals and ConvaTec. [SM]

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