The oncology drug Opdivo holds the potential to radically shift the treatment paradigm in several cancer indications, which should result in peak sales of more than $10 billion annually.

More than half of Bristol's late-stage pipeline focuses on immunology and cancer--indications, where the FDA aggressively approves drugs and which typically hold strong pricing power.

The acquisition of Celgene brings generic competition for cancer drug Revlimid in 2022, setting up a major growth obstacle.

We believe a large portion of Bristol's valuation is tied to cancer drug Opdivo, which could have an amplified negative impact on the stock if clinical data are poor or if competitors report superior data to Opdivo.

Bristol’s recent move to acquire Celgene adds significant debt that could become challenging to repay if competition strengthens against key drugs or pricing pressures increase in the U.S.