Down 25%, Should You Buy the Dip on Bristol Myers Squibb?
The Motley Fool
by newsfeedback@fool.com (Justin Pope)February 21, 2026
AI-Generated Deep Dive Summary
Bristol Myers Squibb (NYSE: BMY) has seen its stock decline by over 25% due to challenges posed by the "patent cliff," a significant issue for pharmaceutical companies as key patents expire, leading to sharp drops in revenue from blockbuster drugs. This phenomenon is particularly impactful for BMY, with several of its major products losing exclusivity and facing intense competition from generics. Investors are now questioning whether this decline presents an opportunity to buy the dip.
The patent cliff refers to a steep drop in drug sales when exclusivity ends, allowing generic versions to flood the market at lower prices. For BMY, this has been particularly acute as several high-revenue medications have lost their exclusivity over recent years. Drugs like Eliquis and Opdivo, once cash cows for the company, are seeing declining sales due to generics. This challenges the company's ability to maintain its revenue streams without new product innovation.
Despite these headwinds, BMY remains a key player in the pharmaceutical sector with a strong pipeline of potential future blockbusters. The company is investing heavily in research and development to offset losses from expiring patents. However, the success of this strategy hinges on successfully launching new drugs that can replicate or exceed the revenue generated by its current leading products.
For investors, the decision to buy the dip in BMY's stock depends on their risk tolerance and long-term outlook. While the company faces significant near-term challenges, its ability to innovate could drive future growth. Monitoring the progress of its pipeline drugs and overall financial health will be crucial for assessing whether BMY is a worthwhile investment in the face of these patent cliff pressures.
In summary, while BMY's stock decline presents an attractive entry point for some investors, it also comes with considerable risks tied to its patent expirations and reliance on innovation. For those willing to take on the risk, the potential rewards could be substantial if the company successfully navigates this challenging period and resumes growth through new product launches.
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Originally published on The Motley Fool on 2/21/2026