Bristol Myers goes direct-to-consumer on one of its blockbuster drugs. Here's our take

CNBC

17-07-2025

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Market moves: Stocks were higher Thursday as the market continued to make its way through second quarter earnings season. Gains in the technology and industrials sectors were lifting the S & P 500 , while real estate and health care weighed on the index. Job cuts: Amazon cut jobs at its Amazon Web Services cloud computing division, the company confirmed on Thursday. The size and scope of the layoffs were unclear, but workforce reductions could help support margins in the quarters ahead. We're not concerned that this is a warning sign around slowing demand – it's about the company trying to get more efficient. If AI played a role in this, it speaks to the discussion we had on Wednesday's Morning Meeting about how large tech companies — like Dell , Amazon, and Microsoft — have embraced AI and are seeing their operating expenses as a percentage of sales drop, according to Melius Research. The ability to do more with fewer employees is positive for earnings leverage in the years ahead. DTC drugs: Bristol Myers Squibb and Pfizer announced on Thursday that they will begin selling the blood-thinning medication Eliquis directly to patients through their Eliquis 360 support program at a 40% discount to the current list price. Eliquis is one of Bristol-Myers' top-selling drugs. Analysts expect the medication will generate about $14.3 billion of the company's total $46.2 billion of revenue this year. However, Bristol Myers labels the drug as part of its "legacy portfolio" and not its "growth portfolio" since it is expected to face generic competition in the United States in a few years. Importantly, analysts at Leerink do not believe the discount will be a net pricing headwind for either Bristol Myers or Pfizer, as the drug is already heavily rebated to pharmacy benefit managers. The drug companies can circumvent the middlemen with these programs, which is why Bristol Myers' stock isn't lower on this news. Also, selling directly to patients at a lower price should help pharma companies gain much-needed favor with the Trump Administration, especially with the threat of drug pricing reform and tariffs looming. However, we're not going to be buyers of Bristol Myers on this news. We're waiting to make our next decision on the stock until we see the Phase 3 readout of Cobenfy for Alzheimer's psychosis. The data is due sometime in the late third quarter or early fourth quarter, and it will be a make-or-break moment for our thesis. We're hopeful for a successful trial, but we lost a lot of conviction in Cobenfy following its disappointing Phase 3 trial as an adjunctive treatment to atypical antipsychotics in adults with schizophrenia. Up next: Netflix and Interactive Brokers report earnings after Thursday's closing bell. On Friday morning, it's quarterly results from American Express , Charles Schwab , and 3M . We'll be paying most attention to the American Express results as they will provide a read-through into Capital One ahead of its results next week. The 3M quarter is a read-through into DuPont and parts of Honeywell . Friday's economic data includes June housing starts and a preliminary read on the University of Michigan consumer sentiment survey, which also provides participants' 1-year inflation expectations. (Jim Cramer's Charitable Trust is long AMZN, MSFT, BMY, COF, DD, HON. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will 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 trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.