What To Expect From Bristol-Myers Squibb’s Q4

by Trefis Team
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Bristol-Myers Squibb (NYSE:BMY) is scheduled to announce its Q4 earnings on January 24. We expect the company to post steady top line and bottom line 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. Earlier this month, BMY had announced its plans to acquire Celgene in a $74 billion deal. The deal appears to be a good fit for BMY given that it will get access to Celgene’s blockbuster drug Remlivid, and a bubbling pipeline that could drive the future top line growth. We have created an interactive dashboard ~ What Is The Outlook For Bristol-Myers Squibb ~ on the company’s expected performance in 2018 and 2019. You can adjust various drivers to see the impact on the company’s earnings, and price estimate.

Expect Oncology And Cardiovascular To Continue To Drive Earnings Growth

We expect Bristol-Myers Squibb’s overall revenues to grow in mid-to-high single digits in 2018, as Oncology and Cardiovascular drug sales will more than offset the expected declines in other pharmaceutical portfolios, primarily Virology and Mature Drugs & Others.  We expect Oncology revenues to grow in high teens for the full year. Within Oncology, Opdivo has seen solid growth in the recent past, and we expect this trend to continue in the near term, albeit at a slower pace. Note that Merck’s Keytruda has been gaining market share and it was the leader in immuno-oncology space in Q3 2018, the position earlier being held by Opdivo. Apart from Opdivo, the company’s other Oncology drugs include Yervoy, Empliciti, and Sprycel. All of these three drugs have seen slow growth in the recent past. In the long run, the company could benefit from its late stage pipeline, which primarily includes TKY2.

However, if the company is able to successfully complete the Celgene acquisition, it would result in significant incremental oncology revenues from the first year itself. Celgene’s blockbuster drug Revlimid has been doing well of late with sales estimated to be over $9 billion in 2018, and peak sales of over $15 billion by 2022, when it will lose its patent exclusivity. Apart from Revlimid, Pomalyst is another drug with $2 billion in annual sales. More importantly, Celgene’s late stage pipeline is very lucrative with Ozanimod in immunology and inflammation, and Luspatercept, Liso-cel (JCAR017), bb2121, and Fedratinib in hematology. The company expects the potential peak sales of its new drugs to be north of $15 billion. This is significant given BMY’s standalone late stage pipeline is very small (Also Read ~ Bristol-Myers Squibb & Celgene Combined Could Generate Earnings of Over $6 Per Share In The Coming Years).

Other than Oncology, the company’s Cardiovascular segment, which includes Eliquis, will likely continue to see a ramp up in sales in Q4. The growth will primarily be led by the drug’s increased acceptance and market share gains. The drug sales jumped 35% in the nine month period ending September 2018. We currently forecast a 30% 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 patent exclusivity in the U.S. in 2018. 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 adjusted earnings of $3.85 per share for the full year 2018.

 

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