UPDATE: Raymond James Downgrades Bristol-Myers Squibb Co. (BMY) to Market Perform

June 3, 2022 10:41 AM EDT
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Price: $75.01 +1.16%

Rating Summary:
    13 Buy, 14 Hold, 4 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 5 | Down: 15 | New: 12
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(Updated - June 3, 2022 10:59 AM EDT)

Raymond James analyst Dane Leone downgraded Bristol-Myers Squibb Co. (NYSE: BMY) from Outperform to Market Perform.

The analyst comments "On Friday before market-open, BMS announced the acquisition of Turning Point Therapeutics (TPTX) for $76 per share in an all cash transaction (a total consideration of $4.1 billion in equity value). BMS indicated that the TPTX acquisition could be up to $0.08 dilutive on non-GAAP EPS during 2022, but could be accretive to non-GAAP EPS beginning in 2025. The primary asset of the TPTX acquisition is repotrectinib, which is targeted to receive regulatory approval for the treatment of ROS1-positive First-Line Non-Small Cell Lung Cancer (NSCLC) during 2023. We recently hosted a deep dive on targeted therapy for lung cancer, and our discussion was positive on reprotrectinib becoming the front-line choice for treatment of ROS1+ NSCLC, but also highlighted the limited market opportunity – as existing agents (XALKORI + ROZYLTREK) collectively generate ~$500 – 600m annually (ROS1 is 1-2% of NSCLC cases. TPTX has built up a pipeline of ~3 currently clinical programs with a number of pre-clinical programs in development. BMS has limited to no pipeline overlap with the assets of TPTX, and therefor should be able to avoid any regulatory headache around closing the deal on target with 3Q22 expectations. We do think that the acquisition of TPTX is a positive signal that BMS is starting to take advantage of the currently depressed valuations within smid cap biopharma, but we do not find the transaction itself as reason to change our valuation outlook (we model $250-300M peak sales for repotrectinib), and with limited upside at the current trading range to our previous $78 price target – we are downgrading to Market Perform (previously Outperform)."

For an analyst ratings summary and ratings history on Bristol-Myers Squibb Co. click here. For more ratings news on Bristol-Myers Squibb Co. click here.

Shares of Bristol-Myers Squibb Co. closed at $75.07 yesterday.

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