Goldman Sachs says investors should buy Bristol-Myers Squibb (BMY) shares on weakness.
Analyst James Kelly says the company's partner, ImClone Systems IMCL
, announced the FDA has not accepted its licensing application for Erbitux. He says the setback for one pipeline product could create an opportunity in BMY shares and would buy on weakness. He notes the application was based on small data set, and more data is being accumulated, so this should represent a delay, not a permanent derailment.
He notes he's assuming a one-year delay; moving Erbitux to '03 leaves his BMY $2.28 '02 EPS estimate unchanged, but '03 falls by $0.02 to $2.52. He expects volatility today, but would be aggressive near $50.