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Bristol-Myers (BMY) Q2 Earnings, Sales Beat on Eliquis, Opdivo

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Bristol-Myers Squibb Company (BMY - Free Report) reported strong second-quarter results. The company reported earnings of $1.93 per share, which beat the Zacks Consensus Estimate of $1.79 and increased from $1.63 reported in the year-ago quarter.

Total revenues of $11.9 billion surpassed the Zacks Consensus Estimate of $11.5 billion and increased 2% from the year-ago period. The year-over-year growth was primarily driven by in-line products (blood thinner drug Eliquis and immuno-oncology drug Opdivo) and a new product portfolio (Abecma, Opdualag and Reblozyl). Moreover, the decline in Revlimid sales was not as steep as expected.

However, shares are down in pre-market trading.

The company’s shares have gained 18.1% in the year so far against the industry's decline of 19.5%.

 

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Quarterly Details

Revenues increased 12% to $8.3 billion in the United States. However, revenues were down 16% outside the country. International revenues decreased 8% when adjusted for foreign exchange impacts primarily due to lower demand for multiple myeloma (MM) drug Revlimid as a result of generic erosion.

Total In-Line products revenues came in at $8.7 billion, up 9% from the year-ago quarter, driven by growth in demand. Within this segment, Eliquis drove growth for the company as sales increased 16% to $3.2 billion. We note that

Bristol-Myers has a collaboration agreement with Pfizer (PFE - Free Report) for Eliquis. The companies collaborated in 2007. Pfizer funds between 50% and 60% of all development costs depending on the study. 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 immuno-oncology drug Opdivo, approved for multiple cancer indications, were up 8% year over year to $2 billion. Label expansion of the drug boosted sales driven by higher demand across multiple indications, including the Opdivo+Yervoy-based combinations for non-small cell lung cancer (NSCLC), Opdivo+Cabometyx combination for kidney cancer and Opdivo-based therapies for various gastric and esophageal cancers.

Another MM drug, Pomalyst, generated sales of $908 million, up 6% year over year.

Sales of rheumatoid arthritis drug, Orencia, grew 8% to $876 million.

Leukemia drug, Sprycel, raked in sales of $544 million, up 1% year over year.

Melanoma drug, Yervoy, contributed $525 million to the top line, up 3%.

New product portfolio revenues grew to $482 million compared with $225 million in the year-ago period, driven by higher demand for Abecma ($89 million), Opdualag ($58 million) and Reblozyl (up 34% to $172 million)

However, Revlimid revenues declined 22% to $2.5 billion from the year-ago quarter due to a loss of exclusivity primarily in international markets.  Abraxane revenues declined 19% due to the entry of authorized generics.

Adjusted research and development expenses increased 2% to $2.3 billion in the quarter. Adjusted marketing, selling and administrative expenses decreased 5%. Gross margin fell to 77.1% from 79% in the quarter.

2022 Guidance

Bristol-Myers expects 2022 earnings of $7.44-$7.74.  Revenues are now anticipated to be around $46 billion (earlier projection: in line with 2021).  The Zacks Consensus Estimate for earnings is pegged at $7.46 per share on revenues of $46.3 billion. Revlimid sales are expected to be $9-$9.5 billion.

Key Updates

Bristol Myers will acquire clinical-stage precision oncology company Turning Point Therapeutics for $76.00 per share, which equates to a total transaction value of $4.1 billion. The offer price of $76 represents a 122% premium to Turning Point’s closing price of $34.16 on Jun 2. The acquisition is expected to close in the ongoing quarter.  The deal will add TPTX’s lead asset, repotrectinib, a next-generation, potential best-in-class tyrosine kinase inhibitor (TKI) targeting the ROS1 and NTRK oncogenic drivers of NSCLC and other advanced solid tumors.

 

Our Take

Bristol-Myers’ performance in the second quarter of 2022 was strong as earnings and sales beat estimates.  Approval of new drugs adds a new stream of revenues, which should boost growth in the coming quarters. The pipeline progress has been impressive and strategic collaborations will further expand the portfolio.

Bristol-Myers currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the same space is Alkermes (ALKS - Free Report) which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ALKS’ loss estimates for 2022 have narrowed to 3 cents from a loss of 14 cents in the past 60 days. Alkermes surpassed earnings in all the trailing four quarters, the average being 350.48%.


 


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