(BMY) Bristol-Myers Squibb Compan Gets Good News

Bristol-Myers Squibb Company (BMY) received a boost when its blood-thinner Eliquis (apixaban) was cleared by the European Commission (EC) in 27 nations of the European Union (EU) for preventing venous thromboembolic events (VTE) in adults who have undergone elective hip or knee replacement surgery.

The approval by the EC is the first approval for Eliquis, a new oral direct factor Xa inhibitor. Bristol-Myers has co-developed the drug with Pfizer (PFE). The approval was based on ADVANCE-2 and ADVANCE-3 studies which revealed that the drug was statistically superior to 40 mg once-daily Lovenox (enoxaparin) of Sanofi-Aventis (SNY) without increase in bleeding rates.

The decision of the EC to approve Eliquis does not surprise us since the drug had won a positive recommendation from the Committee for Medicinal Products for Human Use (CHMP) in March 2011.

Yervoy Recommended for EU Approval

Good news continued to flow at Bristol-Myers when the CHMP recommended the approval of cancer candidate Yervoy (ipilimumab) in the EU. Approval has been recommended for treating patients suffering from metastatic melanoma, the most severe form of skin-cancer.

CHMP recommended approval of the drug for patients suffering from advanced melanoma who has been treated at least once before for the disease. If the drug is cleared by the regulatory authorities in Europe then it would be a huge boost for Bristol-Myers since the market for metastatic melanoma has a huge unmet need.

We note that the drug was cleared in the US in March 2011 and launched in April 2011. (Please refer to BMY’s Cancer Drug Cleared in the US for the detailed coverage of the event).

Our Take & Recommendation

We currently have a Neutral recommendation on Bristol-Myers in the long-run. The stock carries a Zacks #3 Rank (Hold rating) in the short-run.

Even though we are concerned about the generic risk on many of Bristol-Myers’ leading drugs including the blockbuster Plavix, we are encouraged by the steps taken by the company like the extension of the Abilify agreement with Otsuka, the acquisition of ZymoGenetics and Medarex to combat the threat of generics hanging over it.

The US approval of  Yervoy is a big boost to the company and will bolster its top line. If Yervoy and Eliquis are cleared in the EU then the top line of the pharma major would be bolstered further. Bristol-Myers intends to launch four more compounds – apixaban, belatacept, brivanib and dapagliflozin – by 2012.

The new launches are expected to drive growth in 2013 and beyond. We also expect Bristol-Myers to look to grow revenue through partnering deals and acquisitions.

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