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Bristol-Myers' (BMY) Q4 Earnings & Revenues Beat Estimates

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Bristol-Myers Squibb Company (BMY - Free Report) reported better-than-expected results for the fourth quarter of 2019 on stellar performance of its blood thinner drug, Eliquis, and addition of sales from Celgene’s drugs. The numbers included Celgene’s results, following its acquisition on Nov 20.

Shares were up 2.9% in pre-market trading, following the earnings release. Bristol-Myers’ shares have increased 31.1% in the past year compared with the industry’s rise of 12.7%.

 

Fourth-quarter 2019 earnings of $1.22 per share easily beat the Zacks Consensus Estimate of 88 cents and increased from the year-ago quarter’s earnings of 94 cents.

Total revenues of $7.95 billion comprehensively beat the Zacks Consensus Estimate of $6.14 billion and increased 33% from $5.97 billion in the year-ago period. Strong growth was mainly driven by addition of Celgene’s products.

Full-Year Results

Bristol-Myers’ adjusted earnings per share were $4.69 per share for the full year, up 18%. Full-year revenues rose 16% to approximately $26.1 billion.

Quarterly Details

Revenues were up 34% year over year when adjusted for foreign exchange impact. Revenues increased 42% to $4.8 billion in the United States and 21% outside the country. Ex-U.S. revenues were up 23% when adjusted for foreign exchange impact.

Eliquis witnessed strong growth and was the top revenue generator for the company yet again. Sales of the drug rose 19% to $2 billion. We note that Bristol-Myers has a collaboration agreement with Pfizer (PFE - Free Report) for Eliquis. Sales of Opdivo, which is approved for multiple cancer indications, were down 2% year over year to $1.76 billion. While sales of Eliquis rose 18%, Opdivo sales were down 10% in the United States.

Leukemia drug, Sprycel, raked in sales of $549 million, up 2% year over year. Sales of rheumatoid arthritis drug, Orencia were up 8% to $792 million. Melanoma drug, Yervoy, contributed $385 million to the top line, flat year over year.

Multiple myeloma drug, Empliciti, recorded sales of $94 million, up 36% year over year.

The performance of key drugs in the Virology unit were disappointing. Sales of Baraclude declined 26% to $122 million. Sales of other brands (including Sustiva, Reyataz, Daklinza and all other products that have lost exclusivity in major markets) fell 39% year over year to $356 million.

Myeloma drug, Revlimid, added with Celgene’s acquisition contributed $1.3 billion to the top line. Other key drugs from Celgene — Pomalyst and Abraxane — generated sales of $322 million and $166 million, respectively.

Adjusted research and development (R&D) expenses in the quarter were up 44.4% to $1.96 billion. Adjusted marketing, selling and administrative expenses increased 27.3% to $1.7 billion.

Gross margin was 68.6% in the quarter compared with 72% in the year-ago quarter.

Celgene Acquisition Update

In November, Bristol-Myers completed the previously announced acquisition of biotech bigwig Celgene Corporation for a whopping $74 billion. The acquisition added blockbuster oncology drug, Revlimid to Bristol-Myers portfolio. Bristol-Myers owns approximately 69% of the combined entity, while Celgene shareholders own approximately 31%.

In November, Celgene sold its global rights to psoriasis drug, Otezla, to Amgen (AMGN - Free Report) in connection with the regulatory approval process for Celgene’s acquisition by Bristol-Myers.

Pipeline Update

Bristol-Myers recently withdrew its application in the European Union (“EU”) for the combination of Opdivo and Yervoy for the treatment of advanced non-small cell lung cancer (“NSCLC”) based on data from CheckMate-227.

Though the Committee for Medicinal Products for Human Use acknowledged the integrity of the patient data, it determined that a full assessment of the application was not possible following the multiple protocol changes the company made in response to the rapidly evolving science and data. Consequently, Bristol-Myers has no plans to resubmit this application in the EU.

In January 2020, the FDA granted a Priority Review status to the Opdivo-Yervoy combination for the treatment of first-line NSCLC.

The FDA accepted the supplemental Biologics License Application (sBLA) and granted Breakthrough Therapy designation to the combination for the treatment of patients with advanced hepatocellular carcinoma (“HCC”) previously treated with sorafenib. The FDA granted a Priority Review to the application, with a Prescription Drug User Fee Act (“PDUFA”) goal date of Mar 10, 2020.

2020 Guidance

Bristol-Myers provided guidance for revenues and adjusted earnings in 2020. The company projects earnings of $6.00-$6.20 per share. The company expects revenues for 2020 in the range of $40.5 billion-$42.5 billion. The Zacks Consensus Estimate for revenues and earnings is pegged at $42.11 billion and $6.04 per share, respectively.

The company expects adjusted earnings per share in 2021 to be between $7.15 and $7.45.

Our Take

Bristol-Myers’ performance in the fourth quarter was encouraging. Earnings and sales beat estimates primarily on addition of Celgene’s drugs to its portfolio. However, weak growth in Opdivo sales is a concern. Withdrawal of regulatory application seeking label expansion of Opdivo as first-line treatment for advanced NSCLC in Europe is also discouraging.

Potential approval for Opdivo’s label expansion to include HCC patients and first-line metastatic or recurrent NSCLC patients with no EGFR or ALK genomic tumor aberrations will likely boost sales of the drug. The drug faces stiff competition from Merck’s (MRK - Free Report) Keytruda and Roche’s Tecentriq.

The acquisition of Celgene holds promise as it boosted Bristol-Myers’ oncology franchise and added diverse pipeline in the therapeutic areas of inflammatory, immunologic and cardiovascular diseases. Moreover, the deal is expected to be 40% accretive to the bottom line on a standalone basis in 2020. Bristol-Myers expects to realize cost synergies of approximately $2.5 billion by 2022.

Bristol-Myers Squibb Company Price, Consensus and EPS Surprise

 

Bristol-Myers Squibb Company Price, Consensus and EPS Surprise

Bristol-Myers Squibb Company price-consensus-eps-surprise-chart | Bristol-Myers Squibb Company Quote

 

Zacks Rank

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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