Switch from Bristol Myers into Merck

As a result of the recent FDA acceptance and priority review of Merck’s lung cancer drug Keytruda, the sales growth outlook has materially turned in their favour at the expense of  Bristol Myers’ Opdivo. As Bristol Myers  was already trading at a premium valuation to Merck, this announcement  will make it look even more expensive.

Taking into account that Merck’s earnings growth rate should start to accelerate with Bristol Myers’ growth slowing somewhat, I am recommending a direct switch out of Bristol Myers into Merck.

Peter McMurtry, B.Com, CFA

Financial Writer

January 11, 2017

Posted in Blog Post.

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