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TheStreet Open House

Bristol-Myers Faces Challenges

Stocks in this article: BMYJNJPFE

NEW YORK ( TheStreet) -- The business of being a international pharmaceutical company is challenging and fraught with all kinds of situations.

For every big business, as the old song goes, "sometimes you win and sometimes you lose, and sometimes the blues gets a hold of you..." That song would be appropriate after a Food and Drug Administration rejection or when a drug loses its patent protection and becomes fair game for generic drug manufacturers.

When an investor studies the recent history of Bristol-Myers Squibb (BMY), one can see something very similar. Back in 2012 BMY lost patent protection on its blockbuster blood-thinning drug Plavix. It was an expensive loss.

To attempt to rebound from this multi-billion-dollar revenue driver, BMY went into high gear and ever since has done its utmost to redefine itself and its product line. The results have been so positive that BMY shares recently hit a 52-week high of $37.60 on Tuesday.

Let's take a peek at a five-year chart that is certain to impress shareholders and potential shareholders alike. I've included the trailing 12-month revenue per share, which peaked almost a year ago.

BMY Chart BMY data by YCharts

It illustrates the challenge BMY faces, unless BMY is taken over by a bigger drug company or if BMY can buy another revenue driver from one of its smaller competitors.

Both possibilities are realistic. BMY, with its current market cap of $61.5 billion, could conceivably be "affordable" for a Jolly Giant like Johnson & Johnson (JNJ), which also hit a 52-week high Tuesday of $77.71, leaving its market cap somewhere north of a colossal $217 billion.

According to the BMY Web site that speaks about its product development it is working on a new-generation blood-thinner called Eliquis as well as drugs for the growing need to successfully treat widespread health problems such as hepatitis C and cancer.

According to the Web site:

In 2011, we invested $3.8 billion in the discovery and development of medicines in key areas such as diabetes, oncology, cardiovascular, neuroscience, virology and immunology.

The company then lists from A to Z the names of these drugs BMY refers to as its "string of pearls" -- its product pipeline.

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