Morgan Stanley and J.P. Morgan analysts reiterate Overweight ratings on Bristol Myers Squibb (BMY) with a $74 price target from J.P. Morgan and a $67.00 Price Target from Morgan Stanley. These reiterations come on the back of some great Zeposia Phase 3 Ulcerative Colitis (UC) data over the weekend that indicate a meaningful commercial opportunity thanks to its effectiveness and clean safety profile.

Over the weekend, BMY released data on Phase 3 True North Trial Evaluating Zeposia in Adult Patients with Ulcerative Colitis at UEG Week Virtual 2020. True North met expectations and demonstrated statistically significant clinical results compared to placebo at induction week 10. The study also met secondary expectations including clinical response, endoscopic improvement and mucosal healing compared to placebo at induction week 10. The safety profile was overall consistent for Zeposia as well.

William Sandborn, M.D., chief, Division of Gastroenterology at the University of California, stated, “Notably, the endoscopic and histologic benefits, which can be difficult to achieve, suggest Zeposia has the potential to address the need for a safe and effective oral treatment option for this serious, chronic disease.”

Analysts at J.P. Morgan see this news as supporting data for a great market share opportunity. They rank Zeposia’s efficacy above the likes of Humira and on par with Remicade, Stelara and Entyvio. The analysts forecast Zeposia to have a ($500+mm opportunity) by 2025.

At the same time, analysts at Morgan Stanley see this news as an opportunity for Zeposia to generate >$1B in peak global ulcerative colitis sales. The analysts continued to justify these numbers by pointing out flaws in the competitors, “Although future competitors ARNA's etrasimod, LLY's mirikizumab,and ABBV's Rinvoq Phase 2 placebo-adjusted efficacy appeared highly compelling, we note that 1) S1P etrasimod is at least a year behind in development, 2) mirikizumab is an injectable IL-23, and 3) JAK inhibitor Rinvoq has black box warnings” Morgan Stanley is very bullish on Zeposia and see this to have great market share in the years to come despite great competition.

Both J.P. Morgan and Morgan Stanley see Zeposia as an attractive opportunity in the UC market. This alongside the strengthening of it’s pipeline (from Ozanimod) plus business development (last week's MYOK acquisition announcement) is a great reason to take a look into BMY.

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