We buy 300 shares of Bristol-Myers Squibb at about $58 each. After Wednesday’s transaction, Jim Cramer’s Charitable Trust will own 900 shares of BMY, increasing its weighting from 1% to about 1.5%. Shares of pharmaceutical maker Bristol-Myers have fallen about 3% over the past two days in the absence of real news. The stock hit a 52-week high on Monday. We are taking advantage of the decline to deepen this recently initiated position. We called Bristol-Myers from our Bullpen watchlist on November 25. Here’s what’s going on with the company and why we own it. Bristol-Myers is in the midst of a transition under CEO Chris Boerner. It is crossing one of the biggest patent cliffs in the pharmaceutical industry, with key products like Eliquis, a drug for preventing blood clots, and Opdivo, a treatment for lung cancer, losing their patent and will face competition from generics in the coming years. Losing patent protection will cause the company’s total sales to decline through 2029. The market already understands this dynamic well. That’s why Bristol-Myers stock is currently trading at around 8 times the consensus earnings per share estimate for 2025. What the market is currently underestimating is Cobenfy’s business potential. The drug was acquired last December when Bristol-Myers bought Karuna Therapeutics for $14 billion. The deal was one of several multibillion acquisitions Bristol Myers made to replenish its pipeline. BMY 5 years mountain Bristol-Myers Squibb 5 years In September, the FDA approved Cobenfy to treat schizophrenia in adults. This is the first new drug for this disease in more than 30 years. Schizophrenia is a more than $20 billion market in the United States, according to JPMorgan analysts. We believe Bristol-Myers will dominate in this area after AbbVie’s competing drug recently failed in two mid-stage trials. AbbVie’s failure gives Cobenfy a clear path to victory in this area. JPMorgan currently estimates annual sales of Cobenfy at $5 billion by 2030, but analysts said they would not be surprised to see peak sales in the range of more than $10 billion if the drug were approved for additional indications. Adding such a potentially large product is a big deal considering Bristol-Myers is expected to generate about $47 billion in sales this year. Bristol-Myers’ price-to-earnings ratio is expected to rise as Cobenfy’s sales increase in coming years, easing investors’ concerns about the company’s growth after the patent bust. Finally, we like how Bristol-Myers pays a big dividend in the meantime. The stock currently has an annual dividend yield of around 4.15%. (Jim Cramer’s Charitable Trust is long BMY. See here for a complete list of stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charity’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY OBLIGATION EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.