Lost internet on last message, but friend thinks it takes into account manufacturing and sales...Some have Eliquis hitting 7 bil or more in sales. There are always new indications..
Guggenheim raised price to $75. Friday. Very interesting as they have been known to broker sales for PFE. Most likely means nothing but an upgrade,,
Bristol-Myers Squibb (BMY: NYSE) Guggenheim Securities ($65.11, Oct. 12, 2017)
We are raising our price target for Bristol-Myers Squibb to $75 from $68.
[We rate Bristol-Myers (ticker: BMY) at Buy.]
Our rationale for the increase stems from our conviction in the readout of the Checkmate-227 trial evaluating non-small cell lung cancer (NSCLC). Despite the failure of AstraZeneca's (AZN) MYSTIC trial, we believe Bristol-Myers's PD-1 and CTLA-4 inhibitors combo have a high probability of achieving success in first-line (1L) NSCLC. In the near-term, the high expressors cohort of CM-227 is likely to read out in the fourth quarter or first-quarter 2018, which we believe will be positive. With Keytruda + Chemo holding 1L treatment for NSCLC, there is still an opportunity for a less toxic therapy that doesn't involve chemo to take Merck's (MRK) lucrative spot.
On our conviction that Bristol-Myers's CM-227 will read out positively (in expressors cohort and possibly all-comers), we have raised our Opdivo revenue estimates in 2018 and onward, reaching $9 billion-plus by 2020. Accordingly, we have also raised our estimates for Yervoy in 2018 and onward (reaching about $2.1 billion by 2020).
There is also the optionality in which the Opdivo + Chemo combo arm will succeed in all-comers, which primes Bristol-Myers to take 1L market share from Merck with its own PD-1/Chemo combo. Our new 12-month price target of $75 is based on a DCF analysis using a weighted average cost of capital (WACC) of 7.5% and 2% LT growth rate (both unchanged). With an important CheckMate-227 trial readout on the horizon that offers multiple optionality to take share in 1L NSCLC setting, we remain Buy-rated and raise our price target.
Our third-quarter earnings-per-share estimate moves to 78 cents from 79 cents. Our revenue estimate has decreased to $5.22 billion from $5.27 billion based on U.S. script trends. Consensus estimates are currently at 76 cents for the quarter on revenue of $5.16 billion. Daklinza scripts continue to be significantly impacted by the launch of Epclusa, sequentially declining 32% this quarter compared to a 7.5% decline last quarter. Our fiscal 2017 EPS estimate remains at $3.00 while our revenue estimate decreases to $20.63 billion from $20.74 billion. The modest shifts in earnings result from revenue changes based on scripts trends and adjustments to expenses.
Bristol-Myers narrowed and raised the lower end of its non-GAAP 2017 EPS range from $2.85-$3.00 to $2.90-$3.00. Guidance assumes current exchange rates, 21% non-GAAP (23% GAAP) tax rate, and excludes impact of any potential future acquisitions and divestitures as well as any specified items that haven't been identified.
CheckMate-227, a Phase 3 trial investigating Opdivo, Opdivo plus Yervoy, and Opdivo plus chemotherapy in 1L NSCLC in both PD-L1 expressors and non-expressors, has been a large focus of investors since the failure of nivolumab monotherapy in CheckMate-026 last year and the recent failure of AstraZeneca's MYSTIC trial. '227 is scheduled to read out in 1H18 with a possible interim analysis before then. It is likely that not all of the data is mature in 1H18. It has been our view that combination therapy will be the mainstay of NSCLC therapy. However, the first line lung cancer market in patients expressing PD-L1 at 50% or higher has currently been captured by Merck based on the Keynote-024 trial. We expect this share to expand after the approval in May of the Keytruda plus chemo combination in 1L setting (pending outcome for Keynote-189). Furthermore, Opdivo sales may see pressure if AstraZeneca's MYSTIC trial is positive. We have previously explained why we believe the MYSTIC failure has no read-through to '227.
