Is Bristol-Myers Squibb a Good Investment?



Bristol-Myers Squibb stock has gained more than 3.0 percent since it announced a deal to acquire heart drugs maker MyoKardia for $13 billion last month. The MyoKardia deal comes about a year after Bristol-Myers Squibb purchased Celgene in what stands as the largest pharma deal ever. Bristol-Myers Squibb stock trades on the NYSE under the ticker symbol "BMY." 

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Is the MyoKardia deal good for Bristol-Myers Squibb stock?

MyoKardia is a public company that develops treatments for cardiovascular disease. The stock trades on the Nasdaq exchange under the ticker symbol "MYOK." MyoKardia's lead experimental drug is mavacamten, which is being developed as a treatment for obstructive hypertrophic cardiomyopathy. 

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Bristol-Myers Squibb aims to close the MyoKardia acquisition this month or next month. The company plans to submit MyoKardia’s mavacamten for FDA approval in early 2021 and hopes that the drug will enter the market in late 2021. 

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Bristol-Myers Squibb CEO Giovanni Caforio has described MyoKardia’s mavacamten as a potentially revolutionary drug. In addition to obstructive hypertrophic cardiomyopathy, Bristol-Myers Squibb plans to explore using mavacamten for other diseases. The company plans to continue developing MyoKardia’s pipeline.

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Bristol-Myers Squibb is leveraging acquisitions to bolster its position in key treatment markets. While the MyoKardia deal boosts Bristol-Myers Squibb’s portfolio of heart drugs, the Celgene deal bolstered its cancer drugs portfolio.

Is Bristol-Myers Squibb working on a COVID-19 vaccine?

Bristol-Myers Squibb is watching the COVID-19 vaccine race from the sidelines. As its peers work on COVID-19 vaccines, Bristol-Myers Squibb has been working on integrating Celgene. Even though Bristol-Myers Squibb isn't actively involved in the search for a COVID-19 vaccine, several of its drugs are being assessed as a potential treatment for COVID-19. 

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For example, Bristol-Myers Squibb’s Orencia is being evaluated as a treatment for hospitalized COVID-19 patients. The company's blood thinner Eliquis is being used to prevent strokes in severely ill COVID-19 patients. 

Is Bristol-Myers Squibb a good investment?

The Celgene and MyoKardia deals promise to be long-term growth drivers for Bristol-Myers Squibb. Is the stock right for your portfolio? The most bullish analyst sees nearly a 50 percent upside in Bristol-Myers Squibb stock from the current level to $88. Even the most bearish target price of $64 implies nearly an 8.0 percent upside for Bristol-Myers Squibb stock. 

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At nearly $60 per share currently, Bristol-Myers Squibb stock trades at about 13 percent discount to its 52-week high. The stock is down by nearly 8.0 percent in 2020.

Investors seeking a stock with the best dividends in the pharma space may also find Bristol-Myers Squibb appealing. The company has a long dividend history. Bristol-Myers Squibb has boosted its dividend every year. Currently, the stock sports a dividend yield of more than 3.0 percent.


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