Ramp Up In Opdivo And Eliquis Sales Bolsters Bristol-Myers Squibb’s Q1 Earnings

by Trefis Team
Bristol-Myers Squibb
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Bristol-Myers Squibb (NYSE:BMY) recently posted its Q1 results, which were more or less in line with street estimates. The company’s overall revenues grew 5%, led by continued ramp up in Opdivo and Eliquis sales. The bottom line benefited from a lower than expected effective tax rate of 16%. However, we forecast a 19% effective tax rate for the full year in our model. There has been no change to our price estimate post the Q1 earnings announcement, and we continue to believe that Bristol-Myers Squibb’s future growth, and its current market value, relies significantly on the expected growth of its cancer drug Opdivo. We have created an interactive dashboard of the company’s expected performance in 2018. You can adjust the revenue and margin drivers to see the impact on the company’s performance.

Expect Eliquis & Opdivo To Continue To See Strong Growth 

Bristol-Myers Squibb’s Cardiovascular segment, which consists of Eliquis, posted a strong 37% growth (y-o-y) in Q1. We currently forecast the segment sales to grow 21% for the full year, primarily due to higher demand given the drug’s increased acceptance and market share gains. In fact, the company’s management in the recent earnings conference call stated that Eliquis’s share is now over 52% share of total prescriptions in the new oral anticoagulants (NOAC) market in the U.S., and it expects that the drug will surpass Warfarin in total prescriptions this year. Accordingly, we estimate the Eliquis sales to be a little under $5.90 billion in 2018.

The Oncology segment continued to performed well with a 34% jump in Q1 sales (y-o-y). The drug continued to maintain its leadership position in immuno-oncology segment. While the drug has been approved for a number of indications, it has been eyeing the renal cell carcinoma (RCC) market with its recent approval of Opdivo plus Yervoy in first-line RCC in the U.S. We continue to believe that Opdivo will remain the key growth driver for BMY in the near term, and beyond, as it continues to increase its market share with label expansion and different combinations being tested under phase 3 trials. In fact, the company’s recent multi-billion dollar collaborative agreement with Nektar Therapeutics will allow it to maintain its leadership role in the immuno-oncology market (read More – The Importance Of The Nektar Therapeutics Deal For Bristol-Myers Squibb). Looking at the company’s other segments, we expect revenues to decline in the near term, as the company’s key drugs have lost patent exclusivity, and face biosimilar competition.

Overall, we expect the company to post EPS of $3.40 in 2018. We use a TTM price to earnings multiple of 17.5x, which is slightly lower than most of the estimates for the sector, reflecting the risk of biosimilars to BMY’s drugs, to arrive at our price estimate of $59 for Bristol-Myers Squibb. This implies a premium of roughly 15% to the current market price.


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