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Behind BMY’s Cardiovascular Performance in 1Q17

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BMY’s cardiovascular portfolio

Bristol-Myers Squibb’s (BMY) cardiovascular portfolio includes the blockbuster drug Eliquis. Eliquis is an oral inhibitor that targets stroke prevention in non-valvular atrial fibrillation and the prevention and treatment of venous thromboembolism disorders. Eliquis is part of BMY’s alliance with Pfizer (PFE).

Eliquis is also a new blockbuster drug in Bristol-Myers Squibb’s portfolio, and its sales rose ~50% to $1.1 billion in 1Q17, as compared to $734 million in 1Q16. However, Eliquis is less profitable and thus had a negative impact on the company’s overall gross margin.

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Key drivers

Overall, Eliquis sales were driven by its range of uses as well as increased prescriptions from medical practitioners. Its operating expenses increased due to increased investments for drugs including Eliquis, in order to support the continued growth of the drug.

Bristol-Myers Squibb is positive about the growth of Eliquis and expects Eliquis and the oncology drug Opdivo to be major growth drivers over the next five years. Notably, Eliquis competes with drugs like Xarelto from Johnson & Johnson (JNJ) and Pradaxa from Boehringer Ingelheim.

Other research and developments

The company’s cardiovascular research is focused on ongoing and significant unmet medical needs such as arrhythmia, atrial fibrillation, atherosclerosis, thrombosis, and heart failure. The company is also focused on the relationship between diabetes and heart disease, and it’s trying to develop a diabetes drug with cardiovascular benefits.

Remember, to divest risk, investors can consider the iShares US Healthcare ETF (IYH), which has 3.0% of its total assets in Bristol-Myers Squibb. IYH also has 6.2% of its total assets in Merck (MRK), 6.8% of its total assets in Pfizer (PFE), and 10.8% of its total assets in Johnson & Johnson (JNJ).

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