US Pharmaceuticals & Biotechnology "*REPLAY & SLIDES* : BMY, JNJ - Milve..."

Research evidence excerpt

US Pharmaceuticals & Biotechnology "*REPLAY & SLIDES* : BMY, JNJ - Milve..."

Valuation Method and Risk Statement

Industry-specific risks include: (1) underwhelming drug product launches, (2) clinical trial

failure or discontinuation, (3) potential regulatory setback. For valuation, we use PE or EV/

sales multiple methodologies, supported by DCF frameworks.

Large Cap Biopharma: Potential downside risks to large cap biotechs are: (1) political and

geopolitical impacts to healthcare related policies (e.g. pricing, tariff, FDA organizational

changes etc.), (2) similarly, other changes in the US healthcare system, which provides a large

portion of revenues for most biopharmaceuticals companies, (3) disappointing launches or

commercial performance of marketed products, (4) FDA and EMEA regulatory decisions on

clinical candidates or approved products that are both on the market and in clinical

development, (5) potential biogeneric competition in the upcoming years for products that

have lost/will lose patent protection.

Bristol-Myers Squibb:

Our price target is based on a one-year forward P/E valuation, supported by DCF. Upside risks

include: (1) Higher commercial successes for IO (Opdivo/Opdulag/Yervoy), (2) Better than

expected results in CM-7DX in 1L-mCRPC, (3) Lower than expected Revlimid erosion, (4)

Better than expected sales of new launch products (Sotyktu, Abecema, Breyanzi, Reblozyl and

Camzyos. Downside risks include: (1) Lower commercial successes for IO (Opdivo/Opdulag/

Yervoy) due to competitors, (2) Pipeline failures, (3) Higher than expected Revlimid erosion, (4)

Worse than expected sales of new launch products (Sotyktu, Abecema, Breyanzi, Reblozyl

and Camzyos. Industry-specific risks include: (1) Uncertainty around potential reforms around