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, it reported first-quarter revenue that beat expectations as sales of its popular blood cancer treatment Revlimid and blockbuster blood thinner Eliquis came in higher than expected.
But the drugmaker swung to a quarterly loss due to one-time charges related to its recently closed deals. It also said it plans to cut costs by $1.5 billion by 2025, and reinvest the money in drug development.
Bristol-Myers will lay off 2,200 employees this year, discontinue some drug programs, eliminate open roles, consolidate its locations and reduce layers of management, among other cost savings. The company said it will prioritize investment in key drug brands, improve operations across the company and focus its resources on research and development programs that can 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 an earnings call Thursday. Dr. Samit Hirawat, Bristol-Myers' chief medical officer, said the company has discontinued about a dozen drug programs so far and will evaluate others for decline over the course of the year.
Chris Boerner, CEO of Bristol-Myers, added that the majority of savings come from existing internal operations, rather than from newly acquired companies.
“We are taking significant measures to effectively manage the contract,” Boerner said during the call. “Our management team has been focused on ensuring we implement the discipline required to achieve both this year and prepare us for the long term.”
For the first quarter, Bristol-Myers said the charges primarily reflected its $14 billion acquisition of neuroscience drugmaker Karuna Therapeutics and a collaboration agreement with SystImmune, a subsidiary of a Chinese biotech startup, to co-develop… and marketing its experimental cancer treatment. .
The deals come as Bristol-Myers faces pressure to launch new drugs and offset the potential loss of revenue from its best-selling treatments. The company's popular blood cancer treatment Revlimid — and eventually Eliquis and the cancer immunotherapy Opdivo — face competition from cheaper imitators.
Bristol-Myers shares fell more than 7% on Tuesday.
Here's what Bristol-Myers reported for the first quarter compared to what Wall Street was expecting, based on a survey of analysts conducted by LSEG:
Loss per share: $4.40 adjusted vs. expected loss of $4.44 Revenue: $11.87 billion vs. $11.46 billion expected
Bristol-Myers, one of the world's largest pharmaceutical companies, incurred a net loss of $11.9 billion, or $5.89 per share, during the first quarter. This compares to net income of $2.3 billion, or $1.07 per share, for the same period last year.
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 closed deals, Bristol-Myers said in a statement.
Bristol-Myers reported first-quarter revenue of $11.87 billion, up 5% from the same period a year earlier.
The company reiterated its full-year revenue forecast for a low-single-digit increase. But Bristol-Myers cut its 2024 adjusted earnings guidance to 40 cents to 70 cents per share to reflect the impact of recent deals.
That compares to a previous forecast of $7.10 to $7.40 per share, which did not include charges related to the purchase of Karuna Therapeutics and radiopharmaceutical company RayzeBio, along with divestitures and other items.
Eliquis, new post-growth medicines
Bristol-Myers said revenue growth in the first quarter was primarily driven by higher sales of Eliquis and some of its newer drugs.
Eliquis achieved sales of $3.72 billion during the quarter, an increase of 9% from the same period last year. Analysts had expected Eliquis to generate revenue of $3.59 billion, according to estimates compiled by FactSet.
Eliquis, with which Bristol-Myers is a partner Pfizer, is among the first 10 drugs to face ongoing price negotiations with the federal Medicare program. The blood thinner is expected to lose its market exclusivity by 2028.
Bristol-Myers executives said during the call that the impact of those negotiations on Eliquis remains unclear. The final negotiated price for the drug will be published later this year and will take effect in 2026, which is when the company expects a hit to revenues and profits.
Meanwhile, Revlimid had sales of $1.67 billion, down 5% from the same period last year.
However, that exceeded analysts' expectations of $1.22 billion in revenue for the drug, according to FactSet estimates.
Anemia drug Reblozyl and advanced melanoma drug Opdualag also reported revenue growth during the first quarter.
Reblozyl generated sales of $354 million, up 72% from the same period last year. Analysts were expecting revenue of $330.8 million, according to FactSet.
Opdualag generated sales of $206 million in the first quarter, representing a 76% increase from the same period last year. Analysts expected revenue of $206.5 million, FactSet estimates said.
Other new drugs performed below Wall Street expectations.
Abicma, a cell therapy for a rare blood cancer called multiple myeloma, had sales of $82 million during the quarter. Analysts were expecting revenue of $112.6 million, according to FactSet.
The US Food and Drug Administration earlier this month expanded its approval of this drug, allowing multiple myeloma patients to use it as a first-line treatment.
The older drug, Opdivo, had sales of $2.07 billion for the quarter, down 6% from the first quarter of 2023. Analysts had expected the drug to generate revenue of $2.3 billion for the period, according to FactSet estimates.
