FDA Approves Empliciti, Boosting Bristol-Myers Squibb and AbbVie
Market response to Empliciti’s approval
As discussed earlier in this series, the FDA has approved Empliciti, a drug codeveloped by Bristol-Myers Squibb (BMY) and AbbVie (ABBV), for the treatment of patients with multiple myeloma.
The graph above shows the stock prices for Bristol-Myers Squibb and AbbVie both before and after the FDA’s approval of Empliciti. BMY rose ~1.8% to close at $68.26 on December 1, 2015, while ABBV rose by ~1.5% to close at $59.02. BMY has risen over 15% YTD, while Abbvie has fallen 13% YTD.
Bristol-Myers Squibb’s business
Bristol-Myers Squibb (BMY) is an American pharmaceutical company headquartered in New York City. The company deals with innovative medicines for patients with serious diseases in therapeutic areas such as virology, oncology, cardiovascular disease, neuroscience, and immuno-science.
BMY has four key oncology products including Erbitux, Opdivo, Sprycel, and Yervoy. Two of these contributed more than $1 billion in 2014. The company has R&D (strong research and development), leading to a diverse product pipeline. BMY is also focused on immuno-oncology. To learn more about the company, refer Bristol-Myers Squibb: An American Pharmaceutical Giant.
AbbVie’s business
AbbVie is a global, research-based biopharmaceutical company headquartered in North Chicago, Illinois. It develops and markets advanced therapies that address some of the most complex and serious diseases in the world. AbbVie’s products offer treatments for many diseases including rheumatoid arthritis, psoriasis, Crohn’s disease, hepatitis C, HIV, endometriosis, and Parkinson’s disease.
AbbVie was separated from Abbott Laboratories (ABT) in 2013. It operates in over 170 countries. For further details on AbbVie, read AbbVie: Investment Insights into a Major Pharmaceutical Player.
Bristol-Myers Squibb competes with Merck and Company (MRK), GlaxoSmithKline (GSK), Pfizer (PFE), Celgene (CELG), Eli Lilly and Company (LLY), and Novartis (NVS) in a diverse product mix.
To diversify their risk, investors can consider ETFs like the iShares US Pharmaceuticals ETF (IHE), which holds ~7.6% of its total investments in Bristol-Myers Squibb.
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