Bristol-Myers Squibb Co.'s drug pipeline is looking stronger than expected and it's unlikely that its psychiatric drug Abilify will face generic competition before 2015, a Jefferies analyst said Tuesday in upgrading the stock.
THE OPINION: Analyst Jeffrey Holford said in a research note that his confidence has grown in the New York-based drugmaker's ability to deliver new products that will help it stave off a looming patent cliff.
Plavix, the world's second-best selling prescription drug, loses U.S. patent protection in November 2011. Bristol-Myers markets the drug in this country, while its partner Sanofi-Aventis SA sells it in other countries. Bristol-Myers got almost a third of its 2009 revenue from Plavix — $6.15 billion out of a total of $18.81 billion — and is racing to find new drugs to fill the gap.
Holford said new data shows Bristol-Myers' blood thinner apixaban exceeded expectations in both safety and effectiveness in preventing strokes when compared to aspirin. He called the drug one of the biggest opportunities in Bristol-Myers' late-stage pipeline.
"We see these data as placing apixaban clearly ahead of its potential competitors in the largest commercial potential market for these products," Holford wrote. He also has increased expectations for the experimental cancer drug ipilimumab.
The Food and Drug Administration is giving that drug a priority review as a treatment for advanced melanoma in adults who have received at least one previous therapy. That means the FDA will make a decision in six months of receiving the company's application instead of the usual 10 months. That could lead to a decision on approval by Dec. 25.
Finally, Holford said that looking at the patent challenge to Abilify, he believes Bristol-Myers faces a "low, if any, risk" of losing U.S. patent protection early. Previously he had discounted a 20 percent probability that Abilify could start to face competition in the first half of next year.
THE STOCK: Holford upgraded the stock to "Buy" from "Hold" and raised his price target to $30 from $28.80.
Bristol-Myers shares rose 33 cents to $26.18 in midday trading.