Replies to post #154695 on Biotech Values

[DewDiligence]

The two companies aren’t comparable on an apples-to-apples basis: BMY is a “pure” branded-drug company that derives a small proportion of sales from emerging markets, while PFE is a major player in branded generics and one of the premiere beneficiaries of The Global Demographic Tailwind.

[Rocky3]

From Barron's (in part, in article about BMY):

Another positive, Gordon says, is that Eliquis is now a viable option for warfarin-intolerant patients, whose only previous alternative was aspirin. "Eliquis [causes] a little bit, but not much more bleeding than aspirin, and the benefit to the patient is huge; no one else can directly make that claim."

This potential expansion of the market is one way that Eliquis can meet investors' high expectations; but the pool of candidates for the drug is already extensive, as it's estimated that more than three million people in the U.S. and eight million world-wide suffer from atrial fibrillation.

Moreover, the horizon for Eliquis is encouraging, as patients who do take anticoagulant prescriptions to prevent stroke often must do so for life.

Bristol has other attractive drugs as well. Earlier this month, Morgan Stanley's David Risinger wrote that panelists speaking at the firm's physician day in Boston saw brighter sales ahead for the company's Bydureon, a diabetes drug produced with AstraZeneca, thanks to increased marketing: "The two experts believe that the launch of Bydureon was 'underwhelming' and should benefit from new Bristol/AstraZeneca support."

Barrons.com highlighted Eliquis's potential earlier this year, and sales of blood-clot prevention drugs are now expected to reach $4.5 billion by the end of the decade. (See Weekday Trader, "5 Big Drugs for 2012," Jan. 25.)

The stock is about flat since that article's publication, however, trailing the S&P 500's high single-digit gain. And at around 17 times forward earnings, Bristol isn't a bargain.

Yet for long-term investors, the stock may be attractive as it climbs back from its 52-week low last month, given its robust 4.3% yield and the growth prospects for Eliquis over time.