Bristol-Myers Squibb shares are running out of room to run after surging nearly 14% year to date, Berenberg said. The group on Tuesday downgraded shares of the pharmaceutical company to hold from buy and lowered its price target to $76 from $82. That's about 7% above where the stock closed in the previous session. "Following share price outperformance this year, we pause for breath as the focus shifts to delivery of sales through the launch phase," wrote analyst Luisa Hector. Bristol-Myers Squibb has de-risked its pipeline through the end of the year, including launching a number of drugs and acquiring Turning Point Therapeutics, an oncology company, the analyst said. That may change going forward, however. "While Bristol-Myers initially appears to be largely immune from US price reform, we envisage risk for Eliquis in the first round of price negotiation (September 2023) and a high level of Part D exposure in the new launch schedule (deucravacitinib, repotrectinib and milvexian)," Hector wrote. Deucravacitinib, or Sotyktu, was recently approved for psoriasis, significantly advancing the company's replacement strategy for drugs Revlimid and Eliquis. The drug is well-positioned as the most effective oral option for patients and could see $2 billion in peak sales for psoriasis and $6 billion for all uses, according to Hector. Still, launches in new categories can be slow. "We expect significant focus on the sales ramp-up of Sotyktu which could disappoint the market in the early months," said Hector. There are also high hurdles for another drug, milvexian, which recent data show may uncouple blood clot prevention from bleeding risks. "However, the transition to three P3 studies is risky in our view given dose response data are dominated by secondary stroke prevention," wrote Hector. "The bar is high for atrial fibrillation patients for whom effective, cheap, generic alternatives will be available. Furthermore, studies required to demonstrate a superior profile for milvexian are likely to be long and expensive." While the company currently has a low valuation – it trades well below peers in Berenberg's coverage – there are few catalysts for growth on the horizon, according to Hector. Berenberg also upgraded Merck to buy from hold, calling the drugmaker a "low-risk value option in the pharma sector." The firm's new price target of $100 per share implies upside of 16.8% from Tuesday's close.