What To Expect From Bristol-Myers Squibb’s Q2

by Trefis Team
Bristol-Myers Squibb
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Bristol-Myers Squibb (NYSE:BMY) is scheduled to announce its Q2 earnings on July 26. We expect the company to post steady growth led by its oncology and cardiovascular drugs – Opdivo and Eliquis. These two drugs combined accounted for close to 60% of the company’s overall revenues in the previous quarter, and we expect the contribution to increase in the coming years. We continue to believe that these two drugs will remain the key growth drivers for Bristol-Myers Squibb in the near term, primarily led by label expansion of Opdivo. We have created an interactive dashboard ~ What Is The Outlook For Bristol-Myers Squibb ~ on the company’s expected performance in 2018. You can adjust the revenue and margin drivers to see the impact on the company’s revenues, earnings, and price estimate.

Expect Oncology And Cardiovascular To Drive Earnings Growth

We expect Bristol-Myers Squibb’s overall revenues to grow in the low single digits in 2018, as Oncology and Cardiovascular drug sales will more than offset the expected declines in other pharmaceutical portfolios.  We expect Oncology revenues to grow in low double digits for the full year. Within Oncology, Opdivo has seen solid growth in the recent years, and we expect this trend to continue in 2018, albeit at a slower pace. Note that Opdivo has seen stellar growth from less than $1 billion in 2015 to close to $5 billion in 2017, and we forecast it to grow to $7 billion by the end of our forecast period. Opdivo has received several regulatory approvals over the last few years, and it is currently being tested with various combinations in phase 3 trials. It will likely continue to maintain its leadership position in the immuno-oncology market in the coming years, and drive the earnings growth for Bristol-Myers Squibb.

Other than Oncology, the company’s Cardiovascular segment, which includes Eliquis, is expected to perform well in the near term. The growth will primarily be led by higher demand given the drug’s increased acceptance and market share gains. The drug sales jumped 37% in the previous quarter, and they were up 46% in 2017 (full year). We currently forecast a 20% growth for the full year in 2018.

Looking at other segments, Virology drugs will likely see a double digit 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 this 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.

Overall, we expect the company to post earnings of $3.40 in 2018. Our price estimate of $59 is based on a price to earnings multiple of 17.5x, and implies a premium of 2% to the current market price.



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