The Bristol Myers Squibb Research and Development Center at Cambridge Crossing in Cambridge, Massachusetts on December 27, 2023.
Adam Glanzman | Bloomberg | Getty Images
Bristol Myers Squibb on Thursday reported first-quarter revenue that beat expectations as sales of its popular blood cancer drug Revlimid and blockbuster blood thinner Eliquis came in higher than expected.
However, the pharmaceutical company posted a quarterly loss due to one-time charges related to its recently concluded deals. The company also said it would cut costs by $1.5 billion by 2025 and reinvest the money into drug development.
Bristol Myers will lay off 2,200 employees this year, end some drug programs, eliminate open positions, consolidate its locations and reduce management levels, among other cost savings. The company said it would prioritize investments in its key drug brands, optimize operations across the company and focus its resources on research and development programs that could deliver the highest returns to the company and the greatest health benefits to patients.
Two-thirds of the savings are tied to drug research and development, Bristol Myers executives said during a conference call Thursday. The company has discontinued about 12 drug programs so far and will consider discontinuing additional programs throughout the year, Dr. Samit Hirawat, Chief Medical Officer of Bristol Myers.
Bristol Myers CEO Chris Boerner added that the majority of savings will come from existing internal operations rather than newly acquired companies.
“We are taking important actions to effectively navigate the decade,” Boerner said during the call. “Our management team has been focused on ensuring the discipline needed to achieve both this year and position ourselves for the longer term.”
For the first quarter, Bristol Myers said the charges weighing on the company were primarily due to its $14 billion acquisition of neuroscience drug maker Karuna Therapeutics and its collaboration agreement with SystImmune, a subsidiary of a Chinese biotech startup joint development and marketing of its experimental cancer treatment.
These deals come as Bristol Myers faces pressure to bring new drugs to market and offset potential lost sales of its top-selling treatments. The company's popular blood cancer drug Revlimid – and eventually Eliquis and cancer immunotherapy Opdivo – face competition from cheaper copycats.
Shares of Bristol Myers fell more than 7% on Tuesday.
Here's what Bristol Myers reported for the first quarter compared to Wall Street's expectations, based on an LSEG analyst survey:
- Loss per share: $4.40 adjusted versus an expected loss of $4.44
- Revenue: $11.87 billion versus expected $11.46 billion
Bristol Myers, one of the world's largest pharmaceutical companies, reported a first-quarter net loss of $11.9 billion, or $5.89 per share. By comparison, net income for the same period last year was $2.3 billion, or $1.07 per share.
Excluding certain items, adjusted loss per share was $4.40 for the period.
The loss reflects a one-time charge of $6.30 per share related to recently completed deals, Bristol Myers said in a news release.
Bristol Myers reported first-quarter revenue of $11.87 billion, up 5% from the same period last year.
The company reiterated its full-year revenue forecast for a low single-digit increase. But Bristol Myers cut its 2024 adjusted earnings forecast to 40 cents to 70 cents per share to reflect the impact of recent deals.
This compares to previous guidance of $7.10 to $7.40 per share, which excluded costs related to the acquisitions of Karuna Therapeutics and radiopharmaceutical company RayzeBio, as well as divestitures and other items.
Eliquis, new drugs record growth
Bristol Myers said first-quarter sales growth was primarily due to higher sales of Eliquis and some of its newer drugs.
Eliquis reported revenue of $3.72 billion in the quarter, up 9% from the same period last year. Analysts had expected Eliquis to generate $3.59 billion in sales, according to estimates from FactSet.
Eliquis, with whom Bristol Myers shares Pfizer, is among the first 10 drugs for which pricing negotiations are ongoing with the federal Medicare program. The blood thinner is expected to lose its market exclusivity by 2028.
The impact of these negotiations on Eliquis remains unclear, Bristol Myers executives said during the call. The final negotiated price for the drug will be published later this year and will take effect in 2026. The company then expects a decline in sales and profits.
Meanwhile, Revlimid posted revenue of $1.67 billion, down 5% from the same period last year.
But that beat analysts' sales expectations of $1.22 billion for the drug, according to FactSet estimates.
Anemia drug Reblozyl and advanced melanoma treatment Opdualag also posted sales growth in the first quarter.
Reblozyl reported revenue of $354 million, up 72% from the same period last year. Analysts had expected revenue of $330.8 million, according to FactSet.
Opdualag reported first-quarter revenue of $206 million, up 76% from the same period last year. Analysts had expected revenue of $206.5 million, according to estimates from FactSet.
The performance of other new drugs fell short of Wall Street expectations.
Abecma, a cell therapy for a rare blood cancer called multiple myeloma, had revenue of $82 million in the quarter. According to FactSet, analysts had expected sales of $112.6 million.
The U.S. Food and Drug Administration expanded its approval for this drug earlier this month, allowing patients with multiple myeloma to use it as an earlier line of treatment.
An older drug, Opdivo, posted sales of $2.07 billion in the quarter, down 6% from the first quarter of 2023. Analysts had expected the drug to post sales of $2.3 billion for the period, according to FactSet estimates.
Don't miss these exclusives from CNBC PRO
- Here are Thursday's biggest analyst calls: Nvidia, Meta, Tesla, IBM, UPS, Five Below, Amazon, TJX Companies and more
- Here's where the pros say you should invest $1 million right now
- Forget Nvidia: Morgan Stanley says Intel's much-touted AI chip will boost three global stocks
- These five stocks will power the AI revolution as data centers proliferate and power demand doubles, Bank of America says
- Profit Playbook: Your guide to trading with a huge week of reports including meta platforms
Comments are closed.