What To Expect From Bristol-Myers Squibb In 2019?

by Trefis Team
Bristol-Myers Squibb
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Bristol-Myers Squibb (NYSE:BMY) saw high single-digit top line growth in 2018, as strong growth in Eliquis and Opdivo sales more than offset the declines in its mature drugs portfolio. The bottom line grew in the low thirties percent, led by higher revenues, lower share count, and lower taxes. Looking forward, Eliquis and Opdivo will likely continue to drive the company’s revenue and earnings growth in 2019, given the market share gains, especially for Eliquis. We have created an interactive dashboard ~ How Did Bristol-Myers Squibb Fare In 2018, And What Can We Expect In 2019? You can adjust various drivers to see the impact on the company’s earnings, and price estimate. In addition, here is more Healthcare Data.

Expect Revenues To Grow In Mid-Single-Digits Led By Oncology And Cardiovascular Drugs

We expect Bristol-Myers Squibb’s overall revenues to grow in mid-single-digits in 2019, as Oncology and Cardiovascular drug sales will more than offset the expected declines in other pharmaceutical portfolios, primarily Virology and Mature Drugs & Others (Also See ~ What Are Bristol-Myers Squibb’s Key Sources of Revenue). We expect Oncology revenues to grow in low double-digits for the full year, primarily led by a steady growth in Opdivo. It is one of the top selling oncology drugs with several regulatory approvals for multiple indications, including lung cancer, Hodgkin’s Lymphoma, and head and neck cancer. The drug received four approvals last year. Given its wide scope to treat multiple indications, it has become one of the top selling immuno-oncology drugs. This trend will likely continue in the near term, as Opdivo looks to increase its market share in  the immuno-oncology drugs market.

The company’s Cardiovascular segment, which includes Eliquis, has been on a strong run in the recent quarters, led by its increased acceptance. It is the leader in the oral anticoagulants (OAC) market (total prescriptions) in the U.S. The overall anticoagulants market is also expanding, and Eliquis will likely benefit from the market growth in the coming years. However, we forecast Eliquis sales to start declining from 2022, as it nears its patent expiry, which will likely result in stiff competition from other drugs.

Looking at the bottom line, we forecast the earnings to also grow in mid-single-digits to $4.15 per share on an adjusted basis. Our price estimate of $65 for Bristol-Myers Squibb is based on a forward price to earnings multiple of 15.6, which is slightly lower when compared to its peers. This can primarily be attributed to the limited late stage pipeline for the company.

The company expects significant future growth in revenues, cost synergies, and  the massive late stage pipeline from the Celgene merger. However, of late, there is an increased opposition to the deal. Bristol-Myers Squibb’s largest institutional investors ~ Wellington and Starboard ~ have already expressed their concerns over pricing for the deal, as well as the risk associated with the pipeline. It will be interesting to see how this story shapes up over the next few weeks, and if the deal goes through or not.



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