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Bristol-Myers Squibb Company (BMY - Free Report) reported lower-than-expected results for the second quarter of 2023 and cut its annual outlook. The company reported adjusted earnings per share of $1.75, which missed the Zacks Consensus Estimate of $1.99. In the year-ago quarter, BMY posted adjusted earnings per share of $1.93.
Total revenues of $11.23 billion missed the Zacks Consensus Estimate of $11.8 billion. Revenues also decreased by 6% from the year-ago period due to generic competition for the multiple myeloma (MM) drug Revlimid, partially offset by in-line products (primarily Opdivo) and new product portfolios (primarily Opdualag, Abecma and Reblozyl).
The company’s shares have lost 11.9% in the year so far compared with the industry's decline of 11.2%.
Image Source: Zacks Investment Research
Quarterly Details
Revenues decreased 5% to $7.9 billion in the United States due to lower sales of Revlimid as a result of generic erosion and an increase in the number of patients receiving free drug products for Revlimid and, to a lesser extent, Pomalyst, from the company’s patient assistance program. International revenues decreased 8% to $3.3 billion in the quarter due to generic erosion for Revlimid and Eliquis as well as lower average net selling prices, partially offset by Opdivo.
Revenues from in-line and new product portfolios increased by 4% to $9.5 billion.
Total in-line product revenues came in at $8.6 billion. Within this segment, Eliquis’ sales were down 1% to $3.2 billion, missing our model estimate of $3.3 billion and the Zacks Consensus Estimate of $3.4 billion. Sales in the United States increased 7% to $2.3 billion. Revenues in international markets declined 17% to $864 million, primarily driven by generic erosion in Canada and the U.K.
Bristol-Myers has a collaboration agreement with Pfizer (PFE - Free Report) for Eliquis. The companies collaborated in 2007. Profits and losses are shared equally on a global basis, except in certain countries where Pfizer commercializes Eliquis and pays BMY a sales-based fee.
Sales of the immuno-oncology drug Opdivo, approved for multiple cancer indications, were up 4% year over year to $2.1 billion, missing the Zacks Consensus Estimate of $2.3 billion and our estimate of $2.4 billion. Sales in the United States grew by 2%. Revenues in the international markets were up 7%, driven by higher demand as a result of additional indication launches and core indications, partially offset by foreign exchange impacts.
Another MM drug, Pomalyst, generated sales of $847 million, down 7% year over year.
Sales of the rheumatoid arthritis drug Orencia increased 6% to $927 million. Leukemia drug Sprycel generated sales of $458 million, down 16% year over year due to a 24% decline in international sales.
Melanoma drug Yervoy contributed $585 million to the top line, up 11%.
New product portfolio revenues were $862 million compared with $482 million in the prior-year period, driven by higher demand for Reblozyl (up 36% to $234 million), Abecma ($132 million), Opdualag ($154 million), Breyanzi ($100 million) and Zeposia ($100 million).
However, Revlimid revenues declined 41% to $1.5 billion from the year-ago quarter due to lower demand as a result of generic erosion. The Zacks Consensus Estimate for the same was $1.7 billion and our estimate was $1.6 billion. Abraxane revenues were up 7% to $258 million.
Adjusted research and development expenses decreased by 2% to $2.2 billion in the quarter. Adjusted marketing, selling and administrative expenses increased 7%. Gross margin fell to 75% from 78.3% in the quarter.
Bristol Myers Squibb Company Price, Consensus and EPS Surprise
Bristol-Myers expects adjusted earnings of $7.35-$7.65 per share in 2023 (previous guidance: $7.95 - $8.25). Revenues are anticipated to decrease in low single digits (previous guidance: approximate 2% increase). Revlimid sales are expected to reach $5.5 billion (previous guidance: $6.5 billion).
The company announced a $4 billion accelerated share repurchase program, which is expected to be executed during the third quarter of 2023.
Our Take
Bristol-Myers reports dismal second-quarter results due to continued generic competition for Revlimid. Generic competition for Eliquis is also a headwind. The company also lowered its annual forecast.
Earlier, BMY announced that Giovanni Caforio, MD, chairman of the board and chief executive officer (CEO), will retire from the CEO post effective Nov 1, 2023.
Zacks Rank & Stocks to Consider
Bristol-Myers currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the healthcare sector are Alkermes (ALKS - Free Report) and Novartis (NVS - Free Report) . While Alkermes currently sports a Zacks Rank #1 (Strong Buy), Novartis carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, estimates for Alkermes’ 2023 earnings per share have risen from 43 cents to $1.29. During the same period, earnings per share estimates for 2024 have risen from $1.78 to $2.09. Year-to-date, shares of Alkermes have risen 18.0%.
Over the past 60 days, earnings estimates for NVS have increased to $6.89 from $6.67 for 2023. Novartis surpassed estimates in all the trailing four quarters, the average surprise being 6.56%.
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Bristol-Myers (BMY) Q2 Earnings, Sales Miss, '23 View Lowered
Bristol-Myers Squibb Company (BMY - Free Report) reported lower-than-expected results for the second quarter of 2023 and cut its annual outlook. The company reported adjusted earnings per share of $1.75, which missed the Zacks Consensus Estimate of $1.99. In the year-ago quarter, BMY posted adjusted earnings per share of $1.93.
Total revenues of $11.23 billion missed the Zacks Consensus Estimate of $11.8 billion. Revenues also decreased by 6% from the year-ago period due to generic competition for the multiple myeloma (MM) drug Revlimid, partially offset by in-line products (primarily Opdivo) and new product portfolios (primarily Opdualag, Abecma and Reblozyl).
The company’s shares have lost 11.9% in the year so far compared with the industry's decline of 11.2%.
Image Source: Zacks Investment Research
Quarterly Details
Revenues decreased 5% to $7.9 billion in the United States due to lower sales of Revlimid as a result of generic erosion and an increase in the number of patients receiving free drug products for Revlimid and, to a lesser extent, Pomalyst, from the company’s patient assistance program. International revenues decreased 8% to $3.3 billion in the quarter due to generic erosion for Revlimid and Eliquis as well as lower average net selling prices, partially offset by Opdivo.
Revenues from in-line and new product portfolios increased by 4% to $9.5 billion.
Total in-line product revenues came in at $8.6 billion. Within this segment, Eliquis’ sales were down 1% to $3.2 billion, missing our model estimate of $3.3 billion and the Zacks Consensus Estimate of $3.4 billion. Sales in the United States increased 7% to $2.3 billion. Revenues in international markets declined 17% to $864 million, primarily driven by generic erosion in Canada and the U.K.
Bristol-Myers has a collaboration agreement with Pfizer (PFE - Free Report) for Eliquis. The companies collaborated in 2007. Profits and losses are shared equally on a global basis, except in certain countries where Pfizer commercializes Eliquis and pays BMY a sales-based fee.
Sales of the immuno-oncology drug Opdivo, approved for multiple cancer indications, were up 4% year over year to $2.1 billion, missing the Zacks Consensus Estimate of $2.3 billion and our estimate of $2.4 billion. Sales in the United States grew by 2%. Revenues in the international markets were up 7%, driven by higher demand as a result of additional indication launches and core indications, partially offset by foreign exchange impacts.
Another MM drug, Pomalyst, generated sales of $847 million, down 7% year over year.
Sales of the rheumatoid arthritis drug Orencia increased 6% to $927 million.
Leukemia drug Sprycel generated sales of $458 million, down 16% year over year due to a 24% decline in international sales.
Melanoma drug Yervoy contributed $585 million to the top line, up 11%.
New product portfolio revenues were $862 million compared with $482 million in the prior-year period, driven by higher demand for Reblozyl (up 36% to $234 million), Abecma ($132 million), Opdualag ($154 million), Breyanzi ($100 million) and Zeposia ($100 million).
However, Revlimid revenues declined 41% to $1.5 billion from the year-ago quarter due to lower demand as a result of generic erosion. The Zacks Consensus Estimate for the same was $1.7 billion and our estimate was $1.6 billion. Abraxane revenues were up 7% to $258 million.
Adjusted research and development expenses decreased by 2% to $2.2 billion in the quarter. Adjusted marketing, selling and administrative expenses increased 7%. Gross margin fell to 75% from 78.3% in the quarter.
Bristol Myers Squibb Company Price, Consensus and EPS Surprise
Bristol Myers Squibb Company price-consensus-eps-surprise-chart | Bristol Myers Squibb Company Quote
2023 Guidance Lowered
Bristol-Myers expects adjusted earnings of $7.35-$7.65 per share in 2023 (previous guidance: $7.95 - $8.25). Revenues are anticipated to decrease in low single digits (previous guidance: approximate 2% increase). Revlimid sales are expected to reach $5.5 billion (previous guidance: $6.5 billion).
The company announced a $4 billion accelerated share repurchase program, which is expected to be executed during the third quarter of 2023.
Our Take
Bristol-Myers reports dismal second-quarter results due to continued generic competition for Revlimid. Generic competition for Eliquis is also a headwind. The company also lowered its annual forecast.
Earlier, BMY announced that Giovanni Caforio, MD, chairman of the board and chief executive officer (CEO), will retire from the CEO post effective Nov 1, 2023.
Zacks Rank & Stocks to Consider
Bristol-Myers currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the healthcare sector are Alkermes (ALKS - Free Report) and Novartis (NVS - Free Report) . While Alkermes currently sports a Zacks Rank #1 (Strong Buy), Novartis carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, estimates for Alkermes’ 2023 earnings per share have risen from 43 cents to $1.29. During the same period, earnings per share estimates for 2024 have risen from $1.78 to $2.09. Year-to-date, shares of Alkermes have risen 18.0%.
Over the past 60 days, earnings estimates for NVS have increased to $6.89 from $6.67 for 2023. Novartis surpassed estimates in all the trailing four quarters, the average surprise being 6.56%.