Top Healthcare Analyst: A $400 Billion AstraZeneca-Bristol Myers Deal Could “Cut Costs in a Big Way”

Thomas Richmond

Mon, August 3, 2026 at 8:17 PM GMT+3 3 min read

Quick Read

BMY's existing $2B cost-savings program and discounted forward P/E of ~10 make it an attractive AZN acquisition target, Holz argues.
Eli Lilly's $1 trillion market cap dwarfs all pharma rivals, pushing companies like Merck to pursue deals ahead of looming patent cliffs.
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Mizuho Securities healthcare sector specialist Jared Holz laid out the case for a potential blockbuster pharmaceutical tie-up on CNBC Monday morning, arguing that reported talks for AstraZeneca to acquire Bristol Myers Squibb could make financial sense if the buyer aggressively cuts the combined company's cost base.

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The Billions in Cost Cuts a Deal Could Unlock

Holz framed the logic bluntly. "If you take these two companies and you slash expenses, that would be the main thing here. You cut costs in a big way, and you basically aggregate these assets. It's not totally unreasonable," he said. He extended the point to the target's R&D value: "If AstraZeneca thinks that Bristol's assets, their R&D pipeline, is at all decent and there's a lot of costs they can cut, it's not unreasonable."

AstraZeneca (NASDAQ:AZN) traded around $157.23 on Monday, August 3, carrying a market cap of roughly $263 billion. Bristol-Myers Squibb (NYSE:BMY) traded around $64.79 on Monday, with a market cap of about $132 billion. Bristol-Myers has already been executing its own belt-tightening, targeting the remaining $2 billion in cost savings by the end of 2027, driving a head start on potential synergies.

Bristol-Myers has ridden a rebound this year, gaining 25.14% year-to-date and 57.98% over the past year, though it still trades at a discounted forward P/E of roughly 10.

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Eli Lilly's $1 Trillion Valuation Is Forcing Rivals to Think Bigger

AstraZeneca's CEO, Pascal Soriot, said a week ago that the company does not need M&A to thrive and survive. That stance carries weight given AstraZeneca's Q1 2026 revenue of $15.29 billion, up 13% year over year, and a pipeline that includes 16 blockbuster medicines with 20+ Phase 3 readouts expected in 2026.

Still, Holz argued that scale pressure is reshaping the industry. "Eli Lilly has emerged as by far the largest company in pharmaceuticals, a $1 trillion-plus market cap. Everyone else is 600 billion or below, including J&J and Merck and Pfizer and AbbVie," he said. Eli Lilly (NYSE:LLY) saw a 56.32% one-year gain, and GLP-1 franchise revenue, with Mounjaro posting $8.66 billion in Q1 2026, up 125% year over year.

Why Antitrust Regulators May Let This Blockbuster Deal Through

On regulatory risk, Holz pointed to structural depth in the sector: "The pharmaceutical industry is one of the most fragmented, large cap industries we have. There are over 15 large cap companies between the US and Europe that compete here." That fragmentation, combined with an administration Holz described as open to large corporate deals, softens the antitrust overhang that has scuttled megadeals in other sectors.

Merck (NYSE:MRK) has already been active on the deal front, working through its $9 billion charge related to Cidara, its pending acquisition of Terns Pharmaceuticals, and its Verona Pharma transactions as it braces for the KEYTRUDA patent cliff. Merck shares have climbed 25.53% year to date, echoing the broader repricing across pharma names investors expect to consolidate.

The Holz call also connects to Jim Cramer's earlier framing of a coming biotech and pharma M&A wave, in which "the banks making these acquisitions can make fortunes from cost cutting." The large-cap pharmaceutical industry would likely benefit from large-scale cost savings if there were consolidation.