Can Bristol-Myers Squibb Keep Its Bull Run Going in 2014?

The year 2013 was a great one for Bristol-Myers Squibb (NYSE: BMY); 2014 could also be a strong year due to a potential catalyst.

Mar 7, 2014 at 9:30AM

Bristol-Myers Squibb (NYSE:BMY) had a scintillating 2013, with shares delivering gains of more than 66%. This was considerably ahead of the S&P 500, which managed less than half those gains -- up 32% for the year.

The year 2014 has been slightly less dramatic for Bristol-Myers Squibb, with shares being up more than 5% year to date, ahead of the S&P 500's gains of 1.5%. I believe that the company has the potential to beat the index again this year due to potentially exciting developments surrounding one of its drugs. Indeed, this could act as a powerful catalyst through the rest of the year.

Nivolumab
The drug in question is nivolumab, a cancer immunotherapy that Bristol-Myers Squibb has arguably been a little slow in progressing to late-stage studies. A scientific research team from Dana-Farber Cancer Institute and Johns Hopkins has put together statistics regarding patients with melanoma who have taken nivolumab.

The results are impressive, and show that 62% of patients taking the drug were alive after one year, while 43% were still alive after two years. Furthermore, the durable response was also reflected in patients who had ceased taking the drug. The results compare impressively with the average life expectancy of the advanced melanoma patients in the Phase 1 trial, and highlight the potential benefits that nivolumab could deliver.

The competition
However, sector peer Merck (NYSE:MRK), is developing a competing drug to nivolumab and, unlike Bristol-Myers Squibb, is planning to finish a rolling submission to the FDA by the middle of 2014. In January, Merck announced a deal to partner with Pfizer, Amgen (NASDAQ:AMGN), and Incyte on the drug, called MK-3475, where the companies will trial the drug in combination with others. For instance, Amgen will see how it works alongside talimogene laherparepvec, which is an engineered cold virus previously touted as a strong potential cancer prospect. In addition, Merck will increase its in-house focus on the drug, and has announced the initiation of a Phase 1 study in 20 new cancer types.

The deal has been a main cause of the strong performance of shares in Merck and Amgen in 2014, with both companies well ahead of Bristol-Myers Squibb and the S&P 500. While the deal could be a potential catalyst through the rest of 2014 for both stocks, there is also promise elsewhere, with Amgen having multiple projected milestones for its late-stage pipeline in 2014. For instance, a U.S. filing for chronic heart failure drug, ivabradine, is expected prior to July 2014. Merck, meanwhile, is anticipating further news flow for vorapaxar and vintafolide (among others) during the year.

More positive news
The release of statistics regarding nivolumab caps a positive couple of weeks for Bristol-Myers Squibb, with the FDA also approving its drug Myalept for a rare body fat disorder. The drug has been approved as a replacement therapy to treat complications caused by leptin hormone deficiency in patients with acquired generalized lipodystrophy, and its approval is encouraging news for Bristol-Myers Squibb.

Looking Ahead
The statistics from the nivolumab study are impressive, and show that Bristol-Myers Squibb is continuing to make encouraging progress to counter the effects of patent expiries. The company is also making encouraging progress toward its goal of becoming a specialist, niche player rather than a producer of mass-market drugs. So, with Bristol-Myers Squibb's shares having made an encouraging start to 2014, potential positive catalysts, including nivolumab, could mean that shares end up having another great year, too.

Here's another stock that could also have a great 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Peter Stephens has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers