Recent trial failures over at pharma giant AbbVie Inc have created a window of opportunity for competitor Bristol-Myers Squibb Co (NYSE:BMY, ETR:RM, OTC:BMYMP), is analysts at UBS are to be believed.
AbbVie stock took a $38 billion hit on Monday after the company revealed that Phase 2 trials of its emraclidine schizophrenia treatment have failed to meet their primary endpoint objectives.
UBS analysts now anticipate that AbbVie will discontinue emraclidine for schizophrenia.
In contrast, UBS sees the development as a positive for Bristol Myers’ Cobenfy, a treatment positioned to lead the muscarinic agonist space in schizophrenia.
UBS has increased its peak sales estimate for Cobenfy to $3.2 billion, up from $2.2 billion, citing reduced competitive pressures in the schizophrenia market.
“We now see Cobenfy as the single muscarinic on the market for the foreseeable future and expect BMY to capitalize on a meaningful first mover advantage,” said the investment bank.
UBS has revised its price targets for both companies, lowering AbbVie’s to $181 from $200 due to the removal of emraclidine from its forecast, while raising Bristol Myers’ target to $60 from $54 in light of increased expectations for Cobenfy.