Key Takeaways From BMY Q2 Earnings
Key Takeaways From Q2 Earnings
- 17% increase in revenue, 30% growth in Non-GAAP EPS
- Opdivo’s sales jumped more than 100% but Yervoy decreased by 19% due to cannibalization
- Opdivo could get potentially two new approvals in next three quarters
- Eliquis’ sales increased more than 91%
- Daklinza’s demand increased among genotype 3 patients in the U.S. and Europe, Hepatitis C franchise seems to reach maturity due to falling sales and stiff competition
- We believe there is substantial growth potential in the company. Here are the reasons we think so.
Growth Drivers
1) Opdivo
- Expected peak sales of $6-7 billion
- Approved for metastatic melanoma, non-small cell lung cancer and advanced renal cell carcinoma
- Possible additional approval for head and neck cancer by the end of 2016
- Approved in 54 markets worldwide, potential for approval in other markets
- Further potential combination with other drugs – Rova-T + Opdivo, Opdivo + Yervoy
2) Eliquis
- Expected peak sales of $3-4 billion
- Blood thinning drug is safer than standard warfarin
- Partnership with Pfizer results in strong global reach
3) Empliciti
- Potential peak sales of $3-4 billion
- Approved for multiple myeloma
Potential Risk
Bristol-Myers Squibb has been investing heavily in research and development (R&D) to help boost its falling sales. The R&D expenditure of the company as a % of sales in 2015 was at an all-time high of 36%. The figure has risen from 18% in 2010 to 29% in 2014. During the same time period, the company’s sales have fallen by 18%. The company needs to justify such enormous spending with some good results. Drugs Prostvac (Phase 3 Development) and additional combinations for Opdivo can help the company to justify such spending. But if they underperform, investors could start questioning their R&D efficacy.
Sources:
[1] Bristol-Myers Squibb (BMY) Giovanni Caforio on Q2 2016 Results – Earnings Call Transcript, Seeking Alpha, July 28,2016
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[2] Sec Filings
Have more questions about Bristol-Myers Squibb? See the links below.
- Three Things To Watch Out For Bristol-Myers Squibb This Year
- What’s Bristol-Myers Squibb’s Revenue And Earnings Breakdown?
- What’s Bristol-Myers Squibb’s Fundamental Value Based On Expected 2015 Results?
- How Has Bristol-Myers Squibb’s Revenue Composition Changed Over The Last 5 Years
- By What Percentage Can Bristol-Myers Squibb’s Revenue & EBITDA Grow In The Next 3 Years?
- How Much Revenues Can Bristol-Myers Squibb’s Phase 3 Pipeline Add By 2020?
- Why We Are Bullish On Bristol-Myers Squibb
- Bristol-Myers Squibb Did Well In 2015, And New Drugs Could Keep The Momentum Going
Notes:
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