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Bristol-Myers Squibb Company (BMY - Free Report) reported mixed results for the first quarter of 2023. The company reported adjusted earnings per share of $2.05, which beat the Zacks Consensus Estimate of $1.98 and our model estimate of $1.94. In the year-ago quarter, BMY posted adjusted earnings per share of $1.96.
However, total revenues of $11.34 billion missed the Zacks Consensus Estimate and our model estimate of $11.6 billion. Revenues also decreased 3% from the year-ago period due to generic competition for the multiple myeloma (MM) drug Revlimid and foreign exchange impacts, partially offset by in-line products (primarily Opdivo and Eliquis) and new product portfolios (primarily Opdualag, Abecma and Reblozyl).
The company’s shares have lost 5.4% in the year so far compared with the industry's decline of 6.9%.
Image Source: Zacks Investment Research
Quarterly Details
Revenues increased 4% to $8 billion in the United States but were down 16% outside the country due to generic erosion for Revlimid and Eliquis.
Revenues from in-line and new product portfolios increased 8% (10% when adjusted for foreign exchange impacts) to $9.3 billion.
Total in-line product revenues were $8.6 billion, up 4% from the year-ago quarter. Within this segment, Eliquis’ sales were up 7% to $3.4 billion, beating our model estimate of $3.3 billion and the Zacks Consensus Estimate by 0.27%. Sales in the United States increased 19% to $2.6 billion. Revenues in international markets declined 18% to $869 million, primarily driven by generic erosion in Canada and the U.K., and foreign exchange impacts of 5%.
We note that 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 15% year over year to $2.2 billion, beating the Zacks Consensus Estimate and our estimate of $2.18 billion. Sales in the United States grew 17% due to higher demand across multiple indications, like Opdivo+Yervoy combinations for non-small cell lung cancer and various gastric, esophageal and bladder cancers. This growth was partially offset by declining second-line eligibility across tumor indications. Revenues in the international markets were up 11%, driven by higher demand as a result of additional indication launches and core indications, partially offset by foreign exchange impacts of 7%.
Another MM drug, Pomalyst, generated sales of $832 million, up 1% year over year.
Sales of the rheumatoid arthritis drug Orencia declined 4% to $764 million. Leukemia drug Sprycel raked in sales of $429 million, down 11% year over year due to a 25% decline in international sales.
Melanoma drug Yervoy contributed $508 million to the top line, down 1%.
New product portfolio revenues were $723 million compared with $350 million in the prior-year period, driven by higher demand for Reblozyl (up 32% to $206 million), Abecma ($147 million), Opdualag ($117 million) and Zeposia ($78 million).
However, Revlimid revenues declined 37% to $1.7 billion from the year-ago quarter due to lower demand as a result of generic erosion. The Zacks Consensus Estimate for the same was $1.8 billion and our estimate was $1.9 billion. Abraxane revenues were up 12% to $239 million.
Adjusted research and development expenses increased 3% to $2.2 billion in the quarter. Adjusted marketing, selling and administrative expenses decreased 4%. The gross margin fell to 77.8% from 79.2% in the quarter.
Bristol Myers Squibb Company Price, Consensus and EPS Surprise
Bristol-Myers continues to expect adjusted earnings of $7.95-$8.25 per share in 2023. Revenues are anticipated to increase 2% at reported rates. Revlimid sales are expected to be $6.5 billion.
CEO Steps Down
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.
Our Take
Bristol-Myers beat first-quarter estimates for earnings but missed on sales, which declined year over year due to continued generic competition for Revlimid. Generic competition for Eliquis is another headwind.
The approval of drugs adds a stream of revenues, which should somewhat offset this decline in the coming quarters. Pipeline progress has been impressive and strategic collaborations will further expand the portfolio.
Bristol-Myers currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the healthcare sector are Novo Nordisk (NVO - Free Report) and Sanofi (SNY - Free Report) . Novo Nordisk currently sports a Zacks Rank #1 (Strong Buy) and Sanofi 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, earnings estimates for NVO for 2023 have gained 6 cents to $4.52. NVO topped earnings estimates in three of the last four quarters and missed in the remaining one, with a four-quarter earnings surprise of 3%, on average.
Over the past 60 days, earnings estimates for SNY have increased to $4.40 from $4.46 for 2023. SNY also surpassed estimates in three of the trailing four quarters and missing in the remaining one, the average surprise being 7.68%.
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Bristol-Myers (BMY) Q1 Earnings Beat, Revlimid Generics Hurt Sales
Bristol-Myers Squibb Company (BMY - Free Report) reported mixed results for the first quarter of 2023. The company reported adjusted earnings per share of $2.05, which beat the Zacks Consensus Estimate of $1.98 and our model estimate of $1.94. In the year-ago quarter, BMY posted adjusted earnings per share of $1.96.
However, total revenues of $11.34 billion missed the Zacks Consensus Estimate and our model estimate of $11.6 billion. Revenues also decreased 3% from the year-ago period due to generic competition for the multiple myeloma (MM) drug Revlimid and foreign exchange impacts, partially offset by in-line products (primarily Opdivo and Eliquis) and new product portfolios (primarily Opdualag, Abecma and Reblozyl).
The company’s shares have lost 5.4% in the year so far compared with the industry's decline of 6.9%.
Image Source: Zacks Investment Research
Quarterly Details
Revenues increased 4% to $8 billion in the United States but were down 16% outside the country due to generic erosion for Revlimid and Eliquis.
Revenues from in-line and new product portfolios increased 8% (10% when adjusted for foreign exchange impacts) to $9.3 billion.
Total in-line product revenues were $8.6 billion, up 4% from the year-ago quarter. Within this segment, Eliquis’ sales were up 7% to $3.4 billion, beating our model estimate of $3.3 billion and the Zacks Consensus Estimate by 0.27%. Sales in the United States increased 19% to $2.6 billion. Revenues in international markets declined 18% to $869 million, primarily driven by generic erosion in Canada and the U.K., and foreign exchange impacts of 5%.
We note that 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 15% year over year to $2.2 billion, beating the Zacks Consensus Estimate and our estimate of $2.18 billion. Sales in the United States grew 17% due to higher demand across multiple indications, like Opdivo+Yervoy combinations for non-small cell lung cancer and various gastric, esophageal and bladder cancers. This growth was partially offset by declining second-line eligibility across tumor indications. Revenues in the international markets were up 11%, driven by higher demand as a result of additional indication launches and core indications, partially offset by foreign exchange impacts of 7%.
Another MM drug, Pomalyst, generated sales of $832 million, up 1% year over year.
Sales of the rheumatoid arthritis drug Orencia declined 4% to $764 million. Leukemia drug Sprycel raked in sales of $429 million, down 11% year over year due to a 25% decline in international sales.
Melanoma drug Yervoy contributed $508 million to the top line, down 1%.
New product portfolio revenues were $723 million compared with $350 million in the prior-year period, driven by higher demand for Reblozyl (up 32% to $206 million), Abecma ($147 million), Opdualag ($117 million) and Zeposia ($78 million).
However, Revlimid revenues declined 37% to $1.7 billion from the year-ago quarter due to lower demand as a result of generic erosion. The Zacks Consensus Estimate for the same was $1.8 billion and our estimate was $1.9 billion. Abraxane revenues were up 12% to $239 million.
Adjusted research and development expenses increased 3% to $2.2 billion in the quarter. Adjusted marketing, selling and administrative expenses decreased 4%. The gross margin fell to 77.8% from 79.2% 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
Bristol-Myers continues to expect adjusted earnings of $7.95-$8.25 per share in 2023. Revenues are anticipated to increase 2% at reported rates. Revlimid sales are expected to be $6.5 billion.
CEO Steps Down
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.
Our Take
Bristol-Myers beat first-quarter estimates for earnings but missed on sales, which declined year over year due to continued generic competition for Revlimid. Generic competition for Eliquis is another headwind.
The approval of drugs adds a stream of revenues, which should somewhat offset this decline in the coming quarters. Pipeline progress has been impressive and strategic collaborations will further expand the portfolio.
Bristol-Myers currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the healthcare sector are Novo Nordisk (NVO - Free Report) and Sanofi (SNY - Free Report) . Novo Nordisk currently sports a Zacks Rank #1 (Strong Buy) and Sanofi 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, earnings estimates for NVO for 2023 have gained 6 cents to $4.52. NVO topped earnings estimates in three of the last four quarters and missed in the remaining one, with a four-quarter earnings surprise of 3%, on average.
Over the past 60 days, earnings estimates for SNY have increased to $4.40 from $4.46 for 2023. SNY also surpassed estimates in three of the trailing four quarters and missing in the remaining one, the average surprise being 7.68%.