Biotech Values

[DewDiligence]

Where should BMY invest its free cash?

I think there would be better places [than ifn lambda] for bristol to invest over $1B.

Three mitigating considerations:

1. BMY is very active in the antiviral arena, so a newly approved antiviral would allow BMY to leverage its sales and marketing infrastructure (unlike, say, NVS).

2. Returns on safe* cash holdings are close to nil.

3. BMY has considerably more liquidity than its balance sheet indicates. I’ll make the reason for this a quiz :- )

The above is not to say that I think BMY struck a great deal for ifn-Lambda—I don’t. However, I don’t think it was an awful deal either.

*BMY lost hundreds of millions of dollars in auction-rate securities and is unlikely to do anything overly clever with its cash in the future.