Cancer remains one of the leading causes of death in the world. Thankfully, cancer rates have been declining for the better part of two decades. For instance, between 2001 and 2017, the cancer death rate decreased by an average of 1.5% per year in the U.S., according to the Centers for Disease Control and Prevention (CDC). Pharmaceutical companies that have developed life-changing cancer treatments have played a significant role in the fight against cancer. One such company is none other than Bristol Myers Squibb (BMY 0.96%).
Year to date, shares of this pharma giant are up by 1.1%, compared to a 12% drop for the S&P 500. Looking a bit further back, though, Bristol Myers' performance hasn't been stellar when compared to that of the broader market. For instance, over the past five years, the company's stock has slid by 3.6%, while the S&P 500 is up by 34.5%. There are good reasons to think Bristol Myers can reverse that trend during the next five years (more on that below), but is it reasonable to think this healthcare company could make you filthy rich?
Bristol Myers' portfolio of cancer treatments
Bristol Myers boasts several cancer drugs whose sales are growing at a good clip. First, there's Revlimid, a treatment for multiple myeloma. Bristol Myers got its hands on Revlimid thanks to its acquisition of Celgene in a cash and stock transaction valued at $74 billion; this acquisition closed in November of 2019. During the first quarter, Revlimid was Bristol Myers' best-selling product: The multiple myeloma treatment brought in $2.9 billion in revenue, a 13.1% year-over-year increase.
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Pomalyst is another cancer drug Bristol Myers acquired in the Celgene deal. This treatment for multiple myeloma racked up $713 million in revenue during the first quarter, compared to $557 million recorded during the first quarter of 2019. Next on the list of Bristol Myers' top cancer drugs is Opdivo, which treats several types of cancer, including non-small cell lung cancer and skin cancer. During the first quarter, revenue from Opdivo was $1.8 billion, a 2% year-over-year decrease.
However, it is worth mentioning that Opdivo is still being evaluated for use against many other types of cancer. This drug's sales could start growing again if it picks up more approvals. There are several more cancer drugs in Bristol Myers' lineup, including Sprycel, Yervoy, Abraxane, and Empliciti. And in addition to its rich lineup, the company's pipeline features exciting potential cancer treatments as well.
For instance, there are ide-cel and liso-cel, two potential blockbuster cancer drugs Bristol Myers picked up when it acquired Celgene. Thanks to its robust lineup of cancer drugs, and its exciting pipeline candidates, Bristol Myers looks well-positioned to continue being a leader in the oncology market.
Competitors
The oncology industry is highly competitive, and Bristol Myers has to contend with several pharma giants in this market. First, there is Johnson & Johnson, which also has an interesting lineup of cancer drugs. Most notably, there is Darzalex, a treatment for multiple myeloma. During the first quarter, Darzalex recorded $937 million in revenue, a 49% year-over-year increase.
Merck is another one of Bristol Myers' competitors in the market for cancer drugs. Merck's Keytruda is approved for an entire suite of cancers, including lung cancer, head cancer, neck cancer, and skin cancer. Keytruda's sales continue growing rapidly. During the first quarter, the cancer treatment recorded $3.3 billion in sales, a 45% increase compared to the year-ago period.
Furthermore, Keytruda is still being evaluated in many more clinical trials and will keep racking up approvals. Even with these challenges, Bristol Myers looks poised to continue growing its top line, thanks in large part to its oncology lineup. According to the research firm Evaluate Pharma, Opdivo and Revlimid will "compete for the top-selling products in the world in 2022," with Pomalyst also set to comfortably crack the top fifty.
Can Bristol Myers make you rich?
Bristol Myers is more than just its lineup of cancer treatments. The company boasts other products such as anticoagulant Eliquis, which will also be one of the best-selling drugs in the world in the next few years, according to Evaluate Pharma. All of these products should help Bristol Myers deliver consistently strong financial results, and I believe the company's stock is a strong buy.
Whether this pharma stock can make you filthy rich is another question, however. That all depends on how much you invest, and what your timeline is. I doubt Bristol Myers could turn a relatively modest sum -- say $1,000 -- into anything that could be considered a fortune within a few years. But investors who put $1,000 of their money in Bristol Myers today will still be glad they did so in five years.
