We buy 300 shares of Bristol-Myers Squibb for about $58 each. After trading on Wednesday, Jim Cramer's Charitable Trust will own 900 BMY shares, increasing its weighting to about 1.5% from 1%. Shares of drugmaker Bristol-Myers have fallen about 3% prior to now two days amid a scarcity of real news. The stock hit a 52-week high on Monday. We are using the decline to maneuver deeper into this recently initiated position. We removed Bristol-Myers from our bullpen watch list on November twenty fifth. Here you’ll find out what's happening in the corporate and why we own it. Bristol-Myers is within the midst of a transition under the leadership of CEO Chris Boerner. It tackles considered one of the pharmaceutical industry's biggest patent cliffs, as key products comparable to blood clot prevention drug Eliquis and lung cancer treatment Opdivo lose patent protection and face generic competition in the following few years. The lack of patent protection will cause the corporate's overall revenue to say no by 2029. The market already understands this dynamic well. That's why Bristol-Myers shares currently trade at about eight times the consensus estimate for 2025 earnings per share. What the market is currently underestimating is Cobenfy's sales potential. This drug was acquired last December when Bristol-Myers bought Karuna Therapeutics for $14 billion. This deal was considered one of many multi-billion dollar acquisitions Bristol Myers made to replenish its pipeline. BMY 5Y Mountain Bristol-Myers Squibb 5 years In September, the FDA approved Cobenfy for the treatment of schizophrenia in adults. It is the primary novel drug against the disease in over 30 years. According to JPMorgan analysts, schizophrenia is a market price greater than $20 billion within the United States. We expect Bristol-Myers to dominate on this space after AbbVie's rival drug recently failed in two mid-stage trials. AbbVie's failure gives Cobenfy a transparent path to victory on this space. JPMorgan currently estimates annual Cobenfy sales at $5 billion by 2030. But analysts said they wouldn't be surprised to see peak sales within the $10 billion-plus range if the drug were approved for added indications. The addition of such a potentially large product is a giant deal considering Bristol-Myers is predicted to generate about $47 billion in sales this 12 months. Bristol-Myers' price-to-earnings ratio should rise again as Cobenfy's sales rise in the approaching years – which might ease investors' concerns in regards to the company's growth after the patent cliff. Finally, we like that Bristol-Myers is paying a giant dividend while we wait. The stock currently has an annual dividend yield of roughly 4.15%. (Jim Cramer's Charitable Trust is long BMY bond. See a full list of stocks here.) As a subscriber to CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable foundation's portfolio. If Jim discussed a stock on CNBC television, he waits 72 hours after the trade alert is issued before executing the trade. THE INVESTING CLUB INFORMATION SET FORTH ABOVE IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, ALONG WITH OUR DISCLAIMER. THERE ARE NO fiduciary duty or duty IN RECEIVING YOUR INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
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