Biotech
Friday, July 26th, 2024 2:24 pm EDT
Key Points
- Strong Financial Performance and Guidance Upgrade: Bristol Myers Squibb reported second-quarter earnings and revenue that exceeded expectations, prompting the company to raise its full-year revenue forecast to the “upper end” of the low single-digit range. They also increased their 2024 adjusted earnings guidance to 60 to 90 cents per share, up from 40 to 70 cents per share. This positive financial performance led to an almost 8% rise in the company’s shares on Friday.
- Cost-Cutting and Strategic Reinvestment: The company is undertaking a significant cost-cutting initiative, aiming to reduce expenses by $1.5 billion by 2025. These savings will be reinvested into key drug brands and R&D programs. The cost reduction plan includes laying off over 2,000 employees, discontinuing certain drug programs, and consolidating operational sites.
- Revenue Drivers and Future Challenges: Bristol Myers’ revenue growth in the second quarter was largely driven by its blood thinner Eliquis and its cancer drug Opdivo, both of which saw higher-than-expected sales. Despite Revlimid’s revenue surpassing estimates, it faced a decline due to generic competition. The company is under pressure to develop new drugs to replace revenue from drugs losing exclusivity, such as Eliquis and Opdivo, and is also facing potential revenue impacts from upcoming Medicare price negotiations for Eliquis as part of President Biden’s Inflation Reduction Act.
On Friday, Bristol Myers Squibb reported robust second-quarter earnings and revenue that exceeded Wall Street expectations, prompting the pharmaceutical giant to raise its full-year guidance. The company now forecasts a revenue increase at the “upper end” of the low single-digit range, up from its previous low single-digit growth estimate provided in April. Bristol Myers also updated its 2024 adjusted earnings forecast to a range of 60 to 90 cents per share, an improvement from the prior range of 40 to 70 cents per share. Following these positive results, the company’s shares surged nearly 8%.
This financial performance comes amid Bristol Myers’ broader strategic shift to cut $1.5 billion in costs by 2025. The company plans to reinvest these savings into its key drug brands and research and development programs. This cost-cutting initiative includes layoffs of over 2,000 employees, discontinuing certain drug programs, and consolidating its operational sites.
For the second quarter, Bristol Myers reported earnings per share of $2.07, far exceeding the expected loss of $1.63 per share. Revenue for the quarter reached $12.2 billion, surpassing the anticipated $11.55 billion, and marking a 9% increase from the previous year. Despite a net income decline to $1.68 billion or 83 cents per share, compared to $2.07 billion or 99 cents per share a year ago, the company’s adjusted earnings of $2.07 per share were stronger than expected.
The revenue growth was driven primarily by Bristol Myers’ top-selling blood thinner, Eliquis, which generated $3.42 billion in sales, reflecting a 7% increase from the previous year and meeting analyst expectations. The company’s cancer drug Opdivo also exceeded revenue projections with $2.39 billion in sales, supported by a favorable demand. Additionally, Revlimid, a drug for blood cancer, brought in $1.35 billion, surpassing analysts’ estimates despite facing competition from generics.
Looking ahead, Bristol Myers faces the challenge of launching new drugs to offset revenue losses from Revlimid and other key treatments as they approach the end of their market exclusivity. Eliquis, in particular, may experience revenue impacts starting in 2026 due to price negotiations with Medicare as part of President Biden’s Inflation Reduction Act. The company’s growth portfolio remains strong, with notable performances from drugs like Reblozyl, Opdualag, and Camzyos, each surpassing sales expectations for the quarter.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/07/26/bristol-myers-squibb-bmy-earnings-q2-2024.html
