This has been a year of major changes for Big Pharma. As the so-called patent cliff has started to peak, we've seen a number of companies make huge acquisitions, push promising new drugs into regulatory review, and even move to change locales to lower their tax burden. 

Bristol-Myers Squibb (NYSE:BMY) is perhaps the poster child of the patent problems sweeping over the industry. After recently losing patent protection for its former blockbuster blood thinner Plavix and a host of other important products, the company decided to focus on immuno-oncology and hepatitis therapies to drive top-line growth. 

Wall Street, however, doesn't appear impressed by Bristol's plan, with shares drastically underperforming the broader markets. 

BMY Chart

Although there is no way to know for sure how any stock will perform over the a given time frame, I think it's generally a good idea to consider the risks associated with every investment. With that in mind, here are three reasons why Bristol's stock could fall moving forward. 

Reason No. 1
Bristol hopes to break into the hepatitis C game soon with its dual regimen of Daklinza and Sunvepra, indicated for genotype 1b patients. Although the combo's clinical data looks strong, and Food and Drug Administration approval should be forthcoming on Nov. 30, its commercial prospects are less certain. 

Gilead Sciences (NASDAQ:GILD) already dominates the hepatitis C market with Sovaldi, and its combo therapy of Sovaldi and ledipasvir should create yet another barrier to entry for newer products. 

Another reason Bristol's drug might fall short of expectations is that Johnson & Johnson's (NYSE:JNJ) Olysio appears to have become a favorite among specialists, being frequently co-prescribed with Sovaldi for genotype 1 patients. So Bristol will probably have to compete on pricing to gain market share.

AbbVie (NYSE:ABBV) and Enanta Pharmaceuticals (NASDAQ:ENTA) are also aiming at this market via a triple therapy offering for genotype 1 patients, which is widely expected to gain approval later this year. All told, I think Bristol is going to have a tough time finding a profitable niche in this increasingly crowded space. 

Reason No. 2
The commercial opportunity in the immuno-oncology space is expected to be huge. Even so, Bristol's top candidate, dubbed Opdivo, hasn't exactly shined as a front-line treatment for non-small cell lung cancer.

We learned earlier this year that an interim analysis of an early stage study showed that only 22% of patients showed signs of anti-tumor activity, and nearly half of all study participants experienced a serious adverse event, when receiving Opdivo in combination with Yervoy.

In the monotherapy trial expected to be used as the basis for the ongoing regulatory filing, Opdivo performed better in increasing overall survival as a third-line treatment, but it still produced a fairly high rate (14%) of Grade 3-4 adverse events.

While Opdivo's prospects for advanced melanoma look stronger on the clinical front, the data collected so far suggests the therapy's commercial prospects for lung cancer will be limited. 

Reason No. 3
Wall Street isn't optimistic about the ability of Bristol's late-stage candidates to replace lost revenue in the short term. The company is expected to see another 4% dip in diluted earnings per share in the coming year, as former top-selling products continue to lose market share to generic rivals. If this holds true, Bristol's shares are thus trading at a forward price-to-earnings ratio of 29, exceeding the sector average of 25. 

In sum, experts remain unconvinced that Bristol's hepatitis C therapy and immuno-oncology candidates can bridge the revenue gap anytime soon. 

Foolish wrap-up
Bristol's strategy to shift into immuno-oncology and other novel markets is certainly not free of risk. However, management has clearly staked the company's future on this path by inking new research and collaboration deals with promising players in this developing field.

On the bright side, Bristol does have a solid balance sheet, which should give it the time needed to make the transition. That said, there is no guarantee that these experimental products in immuno-oncology will ultimately bear fruit. Indeed, we've seen a host of promising immuno-therapies flame out in the clinical testing process over the years. As such, I am willing to watch Bristol's efforts safely from the sidelines for now. 

George Budwell owns shares of Enanta Pharmaceuticals and Johnson & Johnson. The Motley Fool recommends Gilead Sciences and Johnson & Johnson. The Motley Fool owns shares of Gilead Sciences and Johnson & Johnson. 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.