Zacks_Analysts' Blog : Bristol-Myers Inks Deal - Analyst Blog

Recently, Bristol-Myers Squibb Company (BMY) inked a deal with Pharmasset, Inc. (VRUS), a clinical-stage pharmaceutical company, to develop a combination of two candidates, Bristol-Myers’ BMS-790052 and Pharmasset’s PSI-7977, for treating patients suffering from the hepatitis C virus (HCV). Both candidates are currently undergoing mid-stage studies.

The proof of concept 24 week study, expected to begin in the first half of the year, will evaluate the safety, pharmacokinetics and pharmacodynamics, of the combination therapy (in conjunction with ribavirin, a current standard of care, as well as otherwise). The study will evaluate untreated patients, suffering from various forms of the infection.

We believe that if the therapy is developed and commercialized successfully then it would not only boost Bristol-Myers’ portfolio but would provide a wider choice for HCV patients as the lucrative market has a huge unmet need.

Diabetes Therapy Launched

Recently, Bristol-Myers announced the launch of type II diabetes treatment Kombiglyze XR. The drug, a combination of Onglyza (saxagliptin) and metformin HCl extended-release tablets, was approved by the US Food and Drug Administration (FDA) late last year. We note that Bristol-Myers co-develops Onglyza, a type II diabetes treatment, with AstraZeneca plc (AZN).

Kombiglyze XR is approved as an addition to diet and exercise to improve glycemic control in adults suffering from type II diabetes when treatment with both the constituents of the drug is found suitable.

Lucrative Diabetes Market

Kombiglyze XR will target the highly lucrative diabetes market which provides one of the largest opportunities in pharmaceuticals. The market has a huge unmet need with a high incidence of diabetes. A study published by Diabetes Care in 2006 projected that about 48.3 million people would be diagnosed with diabetes in the US by 2050.

Bristol-Myers in Neutral Lane

We currently have a Neutral recommendation on Bristol-Myers which is supported by the Zacks #3 Rank (short-term Hold recommendation) carried by the company. Our biggest concern regarding Bristol-Myers is the high exposure to generic risk on many of its leading drugs. We expect Bristol-Myers to look to bolster its revenues through partnering deals and acquisitions.