Bristol Myers Loses 19.2% in Six Months: Buy, Sell or Hold?

The going remains rough for Bristol Myers (BMY). Shares of this biotech giant have lost 19.2% in the past six months against the industry’s growth of 0.6%. The stock has also underperformed the sector and the S&P 500 Index during this period.

BMY Underperforms Industry, Sector & S&P 500 Index

While the year started on a positive note and the stock touched a 52-week high of $63.33 on March 11, it has been on a downward trend thereafter and touched a 52-week low of $42.96 on July 31.

Although the recent pipeline updates and collaborations have been encouraging, BMY’s legacy drugs face generic challenges, thereby pulling down the top line. The outlook for 2025 has also disappointed investors.

Let us analyze BMY’s fundamentals in such a scenario to help make a prudent investment choice:

BMY’s Legacy Portfolio Faces Generic Competition

The Legacy Portfolio is being adversely impacted by the continued generic erosion of Revlimid, Pomalyst, Sprycel, and Abraxane, as well as the effect of the U.S. Medicare Part D redesign. Revenues from this portfolio were down 17% in the first half of 2025.

Among these, blood thinner medicine Eliquis, for which BMY has a worldwide co-development and co-commercialization agreement with pharma giant Pfizer (PFE), is the biggest contributor to the top line. Eliquis sales were up 1.5% in the first half.

Nonetheless, BMY now expects the legacy portfolio to decline approximately 15% to 17% in 2025, a more moderate rate than previously anticipated, primarily due to Revlimid's strong year-to-date performance.

BMY’s Growth Portfolio Maintains Momentum

BMY’s Growth Portfolio comprises drugs like Opdivo, Opdivo Qvantig, Orencia, Yervoy, Reblozyl, Camzyos, Breyanzi, Opdualag, Zeposia, Abecma, Sotyku, Krazati and Cobenfy.

Opdivo sales in the United States are being driven by a strong launch in MSI-high colorectal cancer and continued growth in first-line non-small cell lung cancer, while sales outside the country are being driven by volume growth.

The FDA had earlier granted approval to Opdivo Qvantig (nivolumab and hyaluronidase-nvhy) injection for subcutaneous use. The initial uptake has been strong and the launch is going well in the United States across all indicated tumor types.

BMY now expects global Opdivo sales, together with Qvantig, to deliver stronger growth in the mid to high-single-digit range for the full year, driven by strong first-half performance.

Thalassemia drug Reblozyl, for which BMY has a collaboration agreement with Merck (MRK), has put up a stellar performance since its approval. Reblozyl global sales have clocked in over $1 billion year to date, reflecting continued strength across MDS-associated anemia.

Breyanzi sales skyrocketed more than 200% to $607 million in the first half, reflecting strong demand across all indications and higher-than-expected infusions that benefited the second quarter.

Cardiovascular drug Camzyos is also gaining more traction.

BMY had earlier won FDA approval for xanomeline and trospium chloride (formerly KarXT), an oral medication for the treatment of schizophrenia, in adults. The drug was approved under the brand name Cobenfy.

The approval of Cobenfy for schizophrenia broadens BMY’s portfolio and validates the acquisition of Karuna Therapeutics.

Cobenfy represents the first new pharmacological approach to treating schizophrenia in decades. The initial uptake is encouraging, with sales of $62 million year to date. Cobenfy is expected to contribute meaningfully to BMY’s top line in the coming years as the company looks to expand the drug’s label into other indications.

These drugs should maintain top-line momentum in the coming quarters.

BMY’s High Debt Ratio Worrisome

While BMY’s strategy of acquiring companies with promising drugs/candidates is encouraging, it has resulted in colossal debt to finance these acquisitions.

As of June 30, 2025, the company had cash and equivalents of $12.6 billion and a long-term debt of $44.5 billion.

Bristol Myers recently collaborated with BioNTech (BNTX). Both companies have entered into an agreement for the global co-development and co-commercialization of BioNTech’s investigational bispecific antibody BNT327 across numerous solid tumor types.

As a result of this deal, the company now expects adjusted earnings per share (EPS) to be in the range of $6.35-$6.65 (previous guidance: $6.70-$7). The decline in annual earnings guidance is attributed to an unfavorable (57 cents per share) impact of the acquired IPRD charge due to the BNTX deal.

BMY’s Valuation and Estimate Revision

From a valuation standpoint, BMY is trading at a discount to the large-cap pharma industry. Going by the price/earnings ratio, BMY’s shares currently trade at 7.60X forward earnings, lower than its mean of 8.47X and the large-cap pharma industry’s 14.77X.

The bottom-line estimate for 2025 has moved south to $6.50 from $6.56 in the past 30 days, while that for 2026 has moved north to $6.07 from $6.03 in the same timeframe.

Stay Invested in BMY Stock

BMY is one of the largest biotech companies, and organizations of this size or magnitude are generally considered safe havens for investors in the sector. BMY has delivered a better-than-expected performance in the first half of 2025 as drugs like Opdivo, Reblozyl, Breyanzi and Camzyos have stabilized its revenue base amid generic competition for its legacy drugs. Approval of additional new drugs and label expansion of top drugs should further diversify its pipeline.

However, generic competition is a major headwind for the company as of now, and the new drugs will take some time to offset this steep decline. Considering the recent pipeline setbacks and cut in earnings guidance, we recommend prospective investors to wait and watch for the time being.

For investors already owning the stock, staying invested would be a prudent move. The company’s attractive dividend yield (5.25%) is a strong reason for existing investors to stay invested.

BMY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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