After the biotech sector's worst month in more than a year, a potential combination between AstraZeneca (AZN) and Bristol Myers Squibb (BMY) is putting oncology stocks back in focus.
The fell 7% in July, marking its worst monthly performance since March 2025.
Why Bristol Myers Fits AstraZeneca
A reported tie-up would create one of the world's largest pharma companies worth nearly $400 billion and unite two huge cancer-drug franchises spanning checkpoint inhibitors, lung cancer, blood cancers, and antibody-drug conjugates (ADCs).
Twelve years ago, AstraZeneca was the takeover target after Pfizer launched a 70 billion pound bid that the former ultimately rejected under CEO Pascal Soriot. At the time, the company was grappling with late-stage pipeline disappointments. Today, AstraZeneca has turned into a buyer.
The British drugmaker has grown into an oncology powerhouse with an ambitious goal of reaching $80 billion in annual revenue by 2030, compared with $58.7 billion last year. Nearly half of its revenue already comes from the U.S., making Bristol Myers an attractive way to deepen its commercial footprint in the world's largest pharma market. The transaction would also dwarf AstraZeneca's $39 billion Alexion acquisition in 2021, currently the biggest deal in its history. Even so, Soriot emphasized during last week's earnings call that AstraZeneca does not "need M&A to deliver" its 2030 ambitions, underscoring that any transaction would be strategic rather than necessary.
For Bristol Myers, the company is battling looming patent expirations and has struggled to convince investors that its $74 billion Celgene acquisition generated the expected long-term returns.
Oncology Takes Center Stage
The timing of the report is notable as both companies highlighted in last week's earnings calls that cancer is their primary growth engine. AstraZeneca reported first-half oncology revenue of $14.1 billion, up 15%, driven by blockbuster medicines including Tagrisso, Calquence, Imfinzi, Enhertu and Datroway. Calquence surpassed $1 billion in quarterly sales for the first time, while Imfinzi and Imjudo revenue surged by 25%.
AstraZeneca also highlighted positive Phase 3 data across bladder and gastric cancer, reinforcing AstraZeneca's stance that combining immunotherapy with ADCs could become a long-term growth driver.
Meanwhile, Bristol Myers pointed to Opdivo, Breyanzi, its expanding hematology portfolio, and its ADC pipeline as pillars of growth. It also announced another Phase 3 lung-cancer study and said recent data boosted confidence in its ADC platform. CEO Chris Boerner also reiterated that business development remains a capital-allocation priority. "If those things come together and ideally continue to enable us to de-risk our near-term growth profile, we certainly have the financial flexibility and the capabilities to be in the mix," Boerner told investors.
Cancer-Drug Overlap Clouds The Deal
The merger’s biggest attraction may also be its greatest obstacle. Bristol Myers’ Opdivo and AstraZeneca’s Imfinzi are rival checkpoint inhibitors used across lung cancer and other solid tumors, with both companies pushing into earlier treatment settings and combination regimens.
That overlap is likely to draw antitrust scrutiny. BMO Capital Markets warned that the companies’ “significant business overlap” in oncology could lower the chances of a deal. However, any required divestitures, or decisions to cut overlapping pipeline programs, could create openings for competitors and smaller biotech firms.
Which Cancer Stocks Could Feel The Ripple Effects?
Among retail favorites, ImmunityBio likely has the strongest connection to both companies. Its IL-15 agonist Anktiva has been studied with Bristol Myers’ Opdivo in the Quilt program and can complement checkpoint inhibitors by restoring immune-cell activity after resistance develops. The biotech firm also competes with AstraZeneca in bladder cancer, where both companies are pursuing bladder-preserving treatments in different patient populations.
On the other hand, Sellas Life Sciences already has a clinical link to Bristol Myers. Its cancer vaccine, GPS, which targets a protein called WT1, was tested with Bristol Myers’ Opdivo in patients with malignant pleural mesothelioma, with Bristol Myers supplying the drug for the investigator-led study. GPS is now being evaluated in the Regal trial in acute myeloid leukemia (AML). Sellas is also developing SLS009, another treatment for hard-to-treat blood cancers, which is also an area where a combined AstraZeneca-Bristol Myers would already have expertise.
Revolution Medicines is already working with Bristol Myers on a clinical trial combining Daraxonrasib, a drug that blocks cancer-driving RAS proteins, with BMS’ Navlimetostat. AstraZeneca has also been building its presence in the KRAS and RAS field, placing Revolution within an area of interest to both companies. CG Oncology, meanwhile, is developing Cretostimogene for bladder cancer in the same bladder-preservation market AstraZeneca is targeting with Imfinzi.
Over the past year, XBI gained 72%, outperforming AZN’s 13% rise but trailing BMY’s 58% by a narrower margin. The biggest moves came from the smaller oncology stocks: SLS surged 530%, RVMD jumped 403%, IBRX rose 191%, and CGON gained 167%, all far outpacing the broader biotech ETF.
How Do Retail Traders Feel About Cancer Stocks?
Retail traders were most upbeat on the two large drugmakers. On Stocktwits, sentiment for BMY was ‘extremely bullish’ with ‘high’ message volume, while AZN and IBRX both drew ‘bullish’ sentiment amid ‘high’ chatter.
Interest was more subdued elsewhere: SLS sentiment was ‘bearish’ with ‘low’ message volume, RVMD was ‘neutral’ with ‘low’ activity, and CGON was ‘neutral’ amid ‘normal’ message volume.
One user that an AZN-BMY merger could create even more value by acquiring SLS, adding that Sellas’ GPS and SLS009 programs could potentially be combined with drugs such as Opdivo, Imfinzi, Tagrisso and other cancer treatments.
Another user said that an AZN-BMY deal could increase ImmunityBio’s strategic appeal, as looming Opdivo patent losses may increase interest in Anktiva’s lung-cancer potential.
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