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Can Bristol-Myers Squibb Beat the S&P in 2014?

Peter Stephens
February 21, 2014

Shareholders in Bristol-Myers Squibb (NYSE: BMY) have had a great year, with shares in the company gaining 46% -- comfortably beating the S&P 500, which has gained 21%.

Furthermore, Bristol-Myers Squibb has made an encouraging start to 2014, with shares up 0.5% -- 1% ahead of the S&P 500, which is currently down 0.5% in 2014. Can Bristol-Myers Squibb extend its outperformance through 2014, and comfortably beat the wider index, as it did last year? Or will the S&P 500 overturn Bristol-Myers Squibb's narrow lead?

Patent expiries
As all Foolish investors know, the pharmaceutical sector is going through a period of change, with many key, blockbuster drugs going off-patent this year, next year, and through the end of the decade. Therefore, the onus is on companies such as Bristol-Myers Squibb to counter these challenges through the development of new blockbuster drugs to replace them. Indeed, the news flow concerning such developments has a major impact on the share prices of pharmaceutical stocks over the short run, so it's worth highlighting some key developments that have occurred recently for Bristol-Myers Squibb that could have a major impact on its future share price.

Potential catalysts In 2014
In its most recent fourth-quarter results, Bristol-Myers Squibb reported key updates surrounding drugs such as Eliquis and Nivolumab. The former had a Supplemental New Drug Application accepted for review by the FDA for the treatment of deep vein thrombosis (DVT) and pulmonary embolism (PE), with the goal date for a decision being August of this year. Furthermore, the European Medicines Agency (EMA) also accepted for review an application for Eliquis for the treatment of DVT and PE.

Meanwhile, cancer prospect Nivolumab continues to be the subject of ongoing studies, with Bristol-Myers Squibb awaiting further data before advancing it to trials in combination with the long-established drug, ipilimumab. Further news on both drugs is anticipated throughout 2014 and, as mentioned, is likely to have a major impact on shares.

A sector-wide challenge
Of course, Bristol-Myers Squibb isn't the only pharmaceutical stock that is set to report highly relevant news flow in 2014 regarding its pipeline. For instance, Pfizer (NYSE: PFE), which partners Bristol-Myers Squibb on the aforementioned Eliquis drug, has experienced positive news fl