How Will Bristol-Myers Squibb Perform In 2018?

by Trefis Team
Bristol-Myers Squibb
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We expect Bristol-Myers Squibb (NYSE:BMY) to post low-single digit revenue growth in 2018, as its blockbuster oncology drug Opdivo continues to ramp up sales while virology, immunology, and mature drugs continue to decline amid competition from biosimilars, and other drugs. For BMY, oncology drugs remain the key growth driver, along with its cardiovascular drug Eliquis. We have created an interactive dashboard that shows how we expect 2018 to shape up for BMY. You can adjust forecasts to see how changes would impact the overall revenue structure for 2018. We forecast the company’s earnings to be around $3.20 per share in 2018.

Oncology Remains The Key Growth Driver For BMY

Within Oncology, Opdivo Remains The Most Important Drug

Opdivo’s potential is huge given that the market for immuno-oncology drugs could be as big as $35 billion by 2024. Opdivo was initially approved for melanoma, but was granted several approvals later, including lung cancer, metastatic renal cell carcinoma, metastatic melanoma, hodgkin lymphoma, head and neck cancer. Lung cancer is one of the most common cancers in the world, accounting for nearly 13% of all diagnosed cases and 20% of cancer related deaths each year. Also, squamous and non-squamous NSCLC constitutes roughly 85% of all lung cancers, which is what Bristol-Myers Squibb is targeting. Opdivo’s patent is protected until 2026-2027, and we expect peak sales of nearly $6.5 billion.

How Will Other Segments Perform In 2018?

The Cardiovascular segment will likely grow in mid-to-high single digits, led by a ramp up in Eliquis sales as the partnership with Pfizer has given the drug a strong global reach. According to Bristol-Myers Squibb’s management, Eliquis has already gained the top spot in hospitals and among cardiologists, and is on its way to displace Xarelto as the market leader in prescription ranking.

Meanwhile, Virology drugs will likely decline in 2018, as some of the company’s  key drugs have lost patent exclusivity. Immunology drugs are also expected to decline given that a key drug – Orencia – lost its exclusivity in the EU in 2017, and its exclusivity in the U.S. will expire next year. Further, mature drugs are on a decline as they face competition from other drugs and biosimilars, and we expect the downtrend to continue in 2018 and beyond.

Estimate 2018 Earnings Per Share To Be ~$3.2

Our price estimate of $60 for Bristol Myers Squibb implies a discount of over 10% to the market.

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