Recently, Bristol-Myers Squibb Company (BMY) inked a deal with Emory University for the development of the former’s pipeline candidates primarily in the fields of oncology, metabolics, hepatitis C and immunoscience.

Per the agreement, Emory University will be responsible for conducting phase II, phase III and pediatric studies in metropolitan Atlanta for the development of Bristol-Myers’ pipeline. The initial focus of the deal would be to develop the oncology pipeline at Bristol-Myers.

We note that Emory University is a well established educational and research institution including nine highly ranked colleges and professional schools. Moreover, the University boasts of a comprehensive health system.

Our Recommendation

We currently have a Neutral recommendation on Bristol-Myers. The stock carries a Zacks #3 Rank (Hold rating) in the short run. We believe that investor focus will remain on how Bristol-Myers fares following the US loss of exclusivity of its blockbuster blood thinner Plavix on May 17, 2012.

Bristol-Myers has co-developed Plavix with Sanofi (SNY). The loss of exclusivity is likely to result in substantial revenue losses for Bristol-Myers. Companies such as Mylan Inc. (MYL) and Dr. Reddy’s Laboratories (RDY) have already launched their respective generic versions of the drug.

Bristol-Myers is looking to combat the generic threat through partnering deals and acquisitions. Apart from acquisitions and partnership deals, Bristol-Myers is looking to introduce new products to augment its product portfolio to combat the generic threat. Bristol-Myers has met with a fair amount of success towards achieving this objective. Many new products were launched/ approved in 2011. We expect Bristol-Myers to continue introducing new products throughout 2012.

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