On Friday, Deutsche Bank reiterated a Hold rating on shares of Bristol-Myers Squibb Co. (NYSE:BMY) with a stock price target of $55.00. The firm's analysis focused on the recent FDA approval of Abecma for the KarMMA-3 trial and its market implications.
Despite the approval, the analyst expressed skepticism regarding the drug's adoption in earlier treatment lines, suggesting that its use would likely be confined to a subset of high-risk myeloma patients, representing approximately 20% of the patient population.
The report highlighted the absence of an overall survival (OS) benefit from BCMA CAR-T therapies as a concern among hematologic oncologists. It was noted that community oncologists, who drive the earlier line setting, might find BCMA CAR-T's less accessible and financially less attractive compared to infusion-based regimens.
The analyst also pointed out that experts tend to prefer Carvykti, a competing therapy, which is anticipated to receive approval for its CARTITUDE-4 trial.
Although Bristol-Myers Squibb's trial design for Abecma was deemed appropriate, with the KarMMA-3 data indicating a significant progression-free survival (PFS) benefit, the lack of a demonstrated OS benefit was considered a critical issue.
The KarMMA-3 trial's hazard ratio for OS was 1.01, indicating no significant difference between Abecma and standard of care (SOC). However, a prespecified sensitivity analysis, which adjusted for the 56% of patients who crossed over to the treatment, showed an OS benefit with a hazard ratio of 0.69.
The report further discussed the challenges of changing referral patterns for earlier line myeloma patients. Current standard-of-care regimens, like GRIFFIN's DVRd, are highly accessible and established in the community.
The financial incentives associated with these regimens and the additional costs and infrastructure required for CAR-T therapies in the community setting were cited as barriers to adoption. The recent partnership between Gilead Sciences (NASDAQ:GILD) and Tennessee Oncology was mentioned as a unique arrangement that is not representative of typical community practice groups.
InvestingPro Insights
As Deutsche Bank maintains a cautious stance on Bristol-Myers Squibb, real-time data from InvestingPro provides a broader perspective on the company's financial health and market position. With a market capitalization of $103.57 billion and a P/E ratio of 13.2, which adjusts to 11.01 for the last twelve months as of Q4 2023, Bristol-Myers Squibb appears to be trading at a valuation that might interest value investors.
An InvestingPro Tip highlights that the company is trading at a low P/E ratio relative to near-term earnings growth, which could signal an attractive entry point for investors seeking growth at a reasonable price.
Additionally, Bristol-Myers Squibb boasts a high shareholder yield and has been aggressively buying back shares, as noted in another InvestingPro Tip. This could indicate management's confidence in the company's future and its commitment to returning value to shareholders. The pharmaceutical giant has also maintained dividend payments for 54 consecutive years, with a current dividend yield of 4.67% as of the latest data, showcasing its reliability for income-focused investors.
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