Amgen (AMGN -1.27%) owes a debt of thanks to Bristol Myers Squibb (BMY -1.88%). For BMS to completed its acquisition of Celgene last year, regulators required that Celgene first sell immunology drug Otezla. Amgen was more than happy to shell out $13.4 billion for the blockbuster drug.
After gobbling up Celgene, BMS' market cap jumped significantly and now rivals that of Amgen. The companies could also compete against each other in several indications if some of their pipeline candidates are successful in clinical testing.
Which of these stocks is the better pick for long-term investors now? Here's how Amgen and BMS compare in key categories.
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Current products
Probably the most glaring thing about Amgen's current lineup is that sales are either treading water or declining for its two top best-selling drugs, Enbrel and Neulasta, due to biosimilar competition. It's a similar story for several of the biotech's other older drugs that face generic rivals.
Amgen has only two blockbusters that are generating solid growth -- osteoporosis drug Prolia and Otezla. However, it does have quite a few rising stars, notably including osteoporosis drug Evenity, cholesterol drug Repatha, secondary hyperparathyroidism drug Parsabiv, and migraine drug Aimovig. Sales for the company's biosimilars are also gaining strong momentum.
BMS, on the other hand, claims several blockbuster drugs with rising sales in its lineup. These include blood cancer drugs Revlimid and Pomalyst, both of which were picked up with the acquisition of Celgene. But not all of BMS' winners came from the Celgene deal. Blood thinner Eliquis, immunology drug Orencia, and cancer drug Sprycel are blockbusters with strong sales growth.
Sales growth for BMS' cancer immunotherapies Opdivo and Yervoy wasn't impressive in the latest quarter. But that could be about to change as the drugs compete in more indications. BMS also has potential winners with newer products in its lineup resulting from its Celgene purchase, including multiple sclerosis drug Zeposia, anemia drug Reblozyl, and myelofibrosis drug Inrebic.
Advantage: Bristol Myers Squibb
Pipeline
Amgen's pipeline includes 20 late-stage programs. Fifteen of these programs focus on additional indications for already-approved drugs, with four late-stage studies for Otezla. Three of the biotech's late-stage programs are for biosimilars.
That leaves only two new drugs that aren't biosimilars in late-stage testing for Amgen. Omecamtiv mecarbil targets treatment of heart failure. Tezepelumab is being evaluated in a phase 3 study for treating asthma. It's also in phase 2 testing for treating atopic dermatitis and chronic obstructive pulmonary disease (COPD). Amgen's early stage pipeline is loaded with bispecific T cell engager (BiTE) drugs targeting cancer.
Bristol Myers Squibb has over 50 late-stage programs. Thirty-five of these programs feature Opdivo either as a monotherapy or in combination with Yervoy or another drug. Nine of BMS' other late-stage programs also target additional indications for drugs already on the market.
Two of the company's new candidates in late-stage testing especially stand out, both of which were added with the Celgene acquisition. Ide-cel is a CAR-T cell therapy targeting multiple myeloma. Liso-cel is also another CAR-T cell therapy targeting large B-cell lymphoma. BMS and its partner, bluebird bio, received an embarrassing refusal-to-file letter from the FDA for the latter cell therapy in May 2020, but the two companies plan to refile for approval with more complete information in the near future.
Advantage: Bristol Myers Squibb
Dividend
Amgen's dividend currently yields 2.7%. The company has increased its dividend by nearly 103% over the last five years.
Bristol Myers Squibb's dividend yield currently stands at nearly 3.1%. The big drugmaker has increased its dividend by almost 22% over the last five years.
Both companies should be able to keep the dividend hikes coming in future years. While Amgen has delivered bigger dividend increases in the past, BMS has greater cash flow and better prospects for earnings growth and therefore could retain a higher dividend yield than Amgen.
Advantage: Bristol Myers Squibb
Better buy
My view is that it's an easy choice between these two stocks. Bristol Myers Squibb has a stronger product lineup, pipeline, and dividend than Amgen does. I think that BMS ranks as one of the best big pharma stocks on the market.
