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Is a Beat in Store for Bristol-Myers (BMY) in Q2 Earnings?

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Bristol-Myers Squibb Company (BMY - Free Report) is scheduled to report second-quarter 2021 results on Jul 28, before market open.

The company’s shares have gained 10.1% in the year so far compared with the industry's growth of only 0.1%.

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Bristol-Myers has a pretty decent track record, beating earnings estimates in three of the last four quarters and missing in the remaining one. The company delivered an earnings surprise of 6.07%, on average, in the trailing four quarters. In the last reported quarter, the company missed earnings by 3.33%.

Let’s see how things are shaping up for the upcoming announcement.

Why a Likely Positive Surprise

Our proven model predicts an earnings beat for Bristol-Myers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Bristol-Myers is +0.18%.

Zacks Rank: The company currently carries a Zacks Rank #3.

Factors at Play

Bristol-Myers’ multiple myeloma (MM) drug, Revlimid (added with erstwhile Celgene’s acquisition), was the top revenue generator in the previous quarter, with sales of $2.9 billion, up 1% year over year. While the performance was not impressive in the last quarter, demand has most likely been strong in the to-be-reported quarter as the global environment is improving. The Zacks Consensus Estimate for sales of the drug stands at $3.2 billion.

Blood thinner drug Eliquis was also one of the top revenue generators in the previous quarter with sales of $2.9 billion, up 9% year over year. This trend has most likely continued in the to-be-reported quarter, followed by market share increases. The Zacks Consensus Estimate for sales of the drug stands at $2.6 billion.

Sales of key immuno-oncology drug, Opdivo, were weak in the previous quarter and registered a 3% decline. Nevertheless, label expansions in recent months (in advanced renal cell carcinoma with Cabometyx and gastric cancer) have most likely boosted sales of Opdivo, which is approved for multiple cancer indications. The Zacks Consensus Estimate for sales of the drug stands at $1.8 billion.

Arthritis drug, Orencia, raked in sales of $758 million in the last reported quarter, up 6%, and the second quarter has likely witnessed similar levels. The Zacks Consensus Estimate for sales of the drug stands at $819 million.

Pomalyst posted a strong performance in the previous quarter and generated sales of $773 million, up 8% year over year. The trend has most likely prevailed in the quarter under review as well.

Melanoma drug, Yervoy, contributed $470 million to the top line in the previous quarter, down 10% year over year. Similar levels of contribution have most likely been witnessed in the second quarter. The Zacks Consensus Estimate for sales of the drug stands at $450 million.

Abraxane contributed $314 million to the top line in the previous quarter, up 5%, and the trend has most likely prevailed in the quarter under review.

The approval of Reblozyl for the treatment of patients with anemia failing an erythropoiesis-stimulating agent and requiring two or more red blood cell (RBC) units over 8 weeks in adults with very low- to intermediate-risk MDS-RS or with myelodysplastic/myeloproliferative neoplasm with ring sideroblasts and thrombocytosis has also resulted in incremental sales.

The company also obtained approval of Zeposia (ozanimod) for the treatment of adults with relapsing forms of multiple sclerosis (RMS), including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease. The top line is likely to have got a boost from the incremental contributions of Reblozyl, Inrebic and Zeposia.

Operating expenses are likely to have increased in the second quarter due to costs associated with the broader portfolio.

Key Recent Developments

In May 2021, the FDA approved Zeposia (ozanimod) 0.92 mg for the treatment of adults with moderately to severely active ulcerative colitis (UC), a chronic inflammatory bowel disease (IBD).

In April, the FDA approved Opdivo in combination with fluoropyrimidine- and platinum-containing chemotherapy for the treatment of patients with advanced or metastatic gastric cancer, gastroesophageal junction cancer and esophageal adenocarcinoma, regardless of PD-L1 expression status.

The European Commission (EC) has approved Opdivo in combination with Cabometyx (cabozantinib) for the first-line treatment of adults with advanced renal cell carcinoma.

Bristol Myers and bluebird (BLUE - Free Report) obtained the FDA approval of their chimeric antigen receptor (CAR) T cell immunotherapy, idecabtagene vicleucel, under the brand name, Abecma. The regulatory agency approved Abecma as the first B-cell maturation antigen (BCMA)-directed CAR T cell immunotherapy for the treatment of adult patients with relapsed or refractory multiple myeloma after four or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor and an anti-CD38 monoclonal antibody.

Other Stocks to Consider

Here are some other stocks you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this quarter.

Ironwood Pharmaceuticals (IRWD - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pfizer (PFE - Free Report) has an Earnings ESP of +2.33% and a Zacks Rank #3.

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