Bristol-Myers upgraded at Leerink after AbbVie setback

Leerink Partners upgraded Bristol-Myers Squibb (NYSE:BMY) to Outperform from Market Perform on Tuesday, boosting sales projections for the company’s new schizophrenia therapy Cobenfy following a trial setback to a potentially competing product from AbbVie (ABBV).

The upgrade comes after AbbVie (ABBV) announced Monday that its schizophrenia candidate emraclidine, added as part of its $8.7B acquisition of Cerevel Therapeutics in 2023, failed two mid-stage studies.

“In the wake of ABBV’s (MP) emraclidine pivotal Ph2 trial failures, we no longer anticipate that competing product to launch in 2026,” Leerink analyst David Risinger wrote, significantly lifting long-term Cobenfy projections, including its 2030 sale estimates by 36% to $5.7B.

Noting that Eli Lilly’s (LLY) antipsychotic medication Zyprexa brought $5B peak revenue in 2010 at much lower prices, the analyst estimated peak Cobenfy sales to exceed $10B if the company succeeds in adding label expansions to the drug.

Leerink’s bullish thesis on Bristol-Myers (NYSE:BMY) is also based on the company’s novel blood thinner milvexian, which is currently undergoing late-stage studies for ischemic stroke, acute coronary syndrome, and atrial fibrillation.

Risinger, who increased BMY’s price target to $73 from $55 per share, boosted milvexian’s risk-adjusted sales projections for 2030 by 26% to $3.9B, citing an update the company shared with its recent Q3 earnings call regarding the drug’s AF trial design.