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Bristol-Myers (BMY) Q4 Earnings Top, Revlimid Generic Impact Sales

Bristol-Myers Squibb Company BMY reported better-than-expected results for the fourth quarter of 2022. The company reported adjusted earnings per share of $1.82, which beat the Zacks Consensus Estimate of $1.71 and our estimate of $1.66 but was down from the $1.84 reported in the year-ago quarter.

Total revenues of $11.4 billion surpassed the Zacks Consensus Estimate and our estimate of $11.1 billion but decreased 5% from the year-ago period due to generic competition for multiple myeloma (MM) drug, Revlimid and foreign exchange impacts, partially offset by in-line products (primarily Opdivo) and new product portfolios (primarily Opdualag and Abecma).

Shares are up in pre-market trading.

The company’s shares have gained 14.3% in the past year against the industry's decline of 3.6%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Quarterly Details

Revenues increased 5% to $7.9 billion in the United States. However, revenues were down 22% outside the country due to lower demand for Revlimid as a result of generic erosion.

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Revenues from in-line and new product portfolios increased 7% (12% when adjusted for foreign exchange impacts) to $8.9 billion.

Total in-line product revenues came in at $8.3 billion, up 4% from the year-ago quarter. The Zacks Consensus Estimate and our estimate for the same was $8.7 billion.  Within this segment, Eliquis’ sales increased 1% to $2.7 billion. Revenues in international markets were impacted by foreign exchange impacts and lower average net selling prices. We note that Bristol-Myers has a collaboration agreement with Pfizer PFE 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 11% year over year to $2.19 billion. The Zacks Consensus Estimate and our estimate was pegged at $2.2 billion. The label expansion of the drug boosted sales, driven by newer metastatic and adjuvant indications, partially offset by declining second-line eligibility across tumors and increased competition.

Another MM drug, Pomalyst, generated sales of $877 million, up 3% year over year.

Sales of the rheumatoid arthritis drug, Orencia, grew 6% to $913 million.

The leukemia drug Sprycel raked in sales of $578 million, up 4% year over year.

Melanoma drug Yervoy contributed $568 million to the top line, up 4%.

New product portfolio revenues grew 83% to $645 million, driven by higher demand for Reblozyl (up 32% to $199 million), Abecma ($125 million), Opdualag ($104 million) and Zeposia ($79 million).

However, Revlimid revenues declined 32% to $2.3 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. Abraxane revenues declined 41% due to the entry of authorized generics.

Adjusted research and development expenses were flat at $2.5 billion in the quarter. Adjusted marketing, selling and administrative expenses decreased 4%. Gross margin fell to 77.9% from 80.3% in the quarter.

2022 Results

Revenues in 2022 came in at $46.1 billion compared to $46.4 billion in 2021 and surpassed the Zacks Consensus Estimate of $45.9 billion. Earnings per share (adjusted) came in at $7.70, up from $7.16 in 2021 and topping the Zacks Consensus Estimate of $7.61.

2023 Guidance

Bristol-Myers expects adjusted earnings of $7.95-$8.25 per share in 2023. Revenues are anticipated to increase by approximately 2% at reported rates and approximately 2% excluding foreign exchange. The Zacks Consensus Estimate for earnings is pegged at $7.90 per share on revenues of $47.1 billion. Revlimid sales are expected to be $6.5 billion.

Our Take

Bristol-Myers beat fourth-quarter estimates for earnings and revenues. Sales, however, declined year over year due to generic competition for Revlimid. Nevertheless, the approval of new drugs adds a new stream of revenues, which should boost growth 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 and Sanofi SNY, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Over the past 30 days, earnings estimates for NVO for 2023 have gained 15 cents to $4.18. NVO topped earnings estimates in three of the last four quarters and has a four-quarter earnings surprise of 3.09%, on average.

Over the past 60 days, earnings estimates for Sanofi have increased to $4.25 from $4.41 for 2023. SNY also surpassed estimates in two of the trailing four quarters, with the average surprise being 9.50.
 

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