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Bristol-Myers (BMY) Q4 Earnings Beat, 2021 EPS View Raised

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Bristol-Myers Squibb Company (BMY - Free Report) reported better-than-expected results for the fourth quarter of 2020 as multiple myeloma (MM) drug, Revlimid, and blood thinner drug, Eliquis, drove growth for the company.  Another MM drug, Pomalyst, also drove the upside.

The company also lifted its earnings guidance for 2021.

Shares were up in pre-market trading following the earnings release.

However, Bristol-Myers’ shares have lost 5.5% in the past year against the industry's growth of 12.4%.


Fourth-quarter 2020 earnings of $1.46 per share easily beat the Zacks Consensus Estimate of $1.37 and increased from the year-ago quarter’s $1.22.

Total revenues of $11.1 billion beat the Zacks Consensus Estimate of $10.6 billion and increased 39% from the year-ago period owing to incremental contributions from the Celgene acquisition, which was completed in November 2019.

Quarterly Details

On a pro-forma basis, revenues were up 10% (assuming the date of the company’s acquisition of Celgene to be Jan 1, 2019).

Revenues increased 43% to $6.8 billion in the United States and 34% outside the country. Ex-U.S. revenues were up 30% when adjusted for foreign exchange impact.

Myeloma drug, Revlimid, added with erstwhile Celgene’s acquisition, contributed $3.2 billion to the top line and was the top revenue generator for Bristol-Myers as sales increased 18% on a pro-forma basis.

Eliquis maintained momentum for the company as sales increased 12% to $2.3 billion. We note that Bristol-Myers has a collaboration agreement with Pfizer (PFE - Free Report) for Eliquis.

Sales of immuno-oncology drug Opdivo, approved for multiple cancer indications, were up 2% year over year to $1.8 billion.

Sales of rheumatoid arthritis drug, Orencia, were up 9% to $867 million.

Another key drug from Celgene, Pomalyst posted a strong performance and generated sales of $835 million, up 21% year over year. Abraxane generated sales of $297 million, down 12% year over year.

Leukemia drug, Sprycel, raked in sales of $564 million, up 3% year over year. Melanoma drug, Yervoy, contributed $471 million to the top line, rising 22% year over year.

MM drug, Empliciti, recorded sales of $91 million, down 3% year over year.

New drugs like Reblozyl generated sales of $115 million while Inrebic generated sales of $15 million.

Adjusted research and development (R&D) expenses in the quarter increased to $2.5 billion from $1.9 billion. Adjusted marketing, selling and administrative expenses rose to $2.5 billion from $1.7 billion.

2020 Results

Revenues came in at $42.5 billion, up 63% year over year and beat the Zacks Consensus Estimate of $42 billion. Earnings per share of $6.44 also beat the Zacks Consensus Estimate of $6.36.

2021 Guidance Update

Bristol-Myers now projects 2021 earnings of $7.35-$7.55 per share (previous guidance: $7.15-$7.45). The guidance assumes revenues to increase in high-single digits.  The Zacks Consensus Estimate for earnings is pegged at $7.37 per share.

Key Pipeline Updates

The FDA recently approved Opdivo in combination with Exelixis’ (EXEL - Free Report) Cabometyx for the first-line treatment of patients with advanced renal cell carcinoma.

In November, the European Commission (EC) approved Opdivo for the treatment of adults with unresectable advanced, recurrent or metastatic esophageal squamous cell carcinoma (ESCC) after prior fluoropyrimidine- and platinum-based combination chemotherapy.

The company recently announced positive results from POETYK PSO-2, the second phase III study evaluating deucravacitinib, a novel, oral, selective tyrosine kinase 2 (TYK2) inhibitor, for the treatment of patients with moderate-to-severe plaque psoriasis. The study met both co-primary endpoints evaluating deucravacitinib versus placebo, with significantly more patients achieving Psoriasis Area and Severity Index (PASI 75) and Physician's Global Assessment (sPGA) scales and met multiple key secondary endpoints versus Otezla (apremilast).

Our Take

Bristol-Myers’ performance in the fourth quarter and 2020 was encouraging as Revlimid and Eliquis drove growth for the company. Pomalyst too put up a robust show. Fourth-quarter earnings and sales beat estimates primarily due to the addition of Celgene’s drugs to its portfolio.

Opdivo too returned to growth after declining in the third quarter amid stiff competition from Merck’s (MRK - Free Report) Keytruda.

The Celgene acquisition boosted Bristol-Myers’ oncology franchise and approval of new drugs added a new stream of revenues, which should propel growth in the coming quarters.

Bristol-Myers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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