BMY delays ADEPT‑2 readout, adds patients after trial irregularities

What happened

Bristol Myers disclosed it will enroll additional patients in the ADEPT‑2 Phase 3 Alzheimer's psychosis study after identifying irregularities, effectively pushing the planned data readout. Expanding enrollment may shore up statistical validity but flags potential site or data‑integrity issues that could attract regulator scrutiny, extend timelines, and increase trial costs. The development trims near‑term clarity around BMY's neuroscience optionality — an area touted as part of the company's diversification strategy alongside oncology and radiopharma — yet it does not directly contradict the company's raised FY2025 guidance driven by Growth Portfolio strength. Given BMY's elevated leverage and reliance on multi‑billion free cash flow to delever, any material extension in trial timelines or incremental R&D spend would weigh on execution and capital allocation priorities. Investors should view this as a meaningful watch item: not immediately fatal to our BUY thesis, but increasing the probability of headline risk and delaying a source of future upside.

Implication

Short term: expect increased share‑price volatility as the market re‑prices timing uncertainty for an Alzheimer’s psychosis readout and examines the integrity of the trial data. Operationally: enrolling more patients raises near‑term R&D spend and likely pushes any approval or launch beyond previous timelines, delaying revenue contribution from this asset. Strategically: BMY’s core Growth Portfolio (Opdivo lifecycle wins, Cobenfy launch, radiopharma) still underpins FY2025 guidance and limits immediate downside to the overall thesis. Balance sheet risk: with Net Debt/EBITDA already elevated, prolonged delays that materially add cost or require additional funding would hurt deleveraging progress and could force tougher capital allocation choices. Monitor closely: the nature of the irregularities, incremental cost guidance, revised timelines, and any regulator commentary — a material negative here would trigger a re‑rating toward HOLD/REDUCE.

Thesis delta

Our BUY thesis is unchanged but the confidence in neuroscience‑driven upside has decreased. We elevate trial integrity and timeline risk to a near‑term watch item; if the irregularities prove systemic or materially delay commercialization, the investment case would shift toward HOLD/REDUCE. For now the company's Growth Portfolio and guidance keep the larger thesis intact.