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How Bristol Myers Squibb's Celgene Buyout Continued to Pay Off in Q4

By Keith Speights - Feb 4, 2021 at 12:00PM

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Several of the drugs picked up in the 2019 acquisition of Celgene ranked among BMS' biggest growth drivers in Q4.

No one likes to miss the big party. But shareholders of Bristol Myers Squibb (BMY 1.64%) probably feel like they did in 2020. Shares of the drugmaker declined slightly last year while the overall market roared higher. After getting off to a good start initially in 2021, BMS stock again gave up most of its gain.

Bristol Myers Squibb announced its fourth-quarter and full-year 2020 results before the market opened on Thursday. Those results were good, but probably not good enough to get investors too excited. Here are the highlights from BMS' Q4 update.

Dollar sign formed by pills.

Image source: Getty Images.

By the numbers

Bristol Myers Squibb reported revenue of $11.1 billion in the fourth quarter, a 39% year-over-year jump. This easily topped the average analysts estimate of $10.7 billion.

The company announced a net loss of $10 billion, or $4.45 per share, in the fourth quarter based on generally accepted accounting principles (GAAP). This represented deterioration from the net loss of nearly $1.1 billion, or $0.55 per share, posted in the same quarter of 2019. 

BMS' adjusted bottom line looked better, though. The drugmaker recorded adjusted earnings of $3.3 billion, or $1.46 per share, compared to $2.4 billion, or $1.22 per share, in the prior-year period. This beat the average analyst earnings estimate of $1.41 per share.

Behind the numbers

Most of Bristol Myers Squibb's revenue growth in the fourth quarter stemmed from its acquisition of Celgene in late 2019. On a pro forma basis that assumes this buyout and the related sale of Otezla to Amgen occurred on Jan. 1, 2019, BMS' revenue increased 10% year over year.

Two of the drugs BMS picked up with the Celgene deal stood out as especially strong growth drivers in Q4. Sales of blood cancer drug Revlimid jumped 18% to nearly $3.3 billion. Sales for multiple myeloma drug Pomalyst/Imnovid soared 21% to $835 million. 

Several newer drugs that were developed by Celgene also contributed to BMS' growth. Reblozyl, Inrebic, Onureg, and Zeposia combined to generate sales of $153 million in the fourth quarter.

BMS also had some solid winners that weren't brought to the table with the Celgene acquisition. Sales for blood thinner Eliquis increased 12% to nearly $2.3 billion. Autoimmune disease drug Orencia raked in $867 million, up 9% year over year. Sales for cancer immunotherapy Yervoy vaulted 22% higher to $471 million. And BMS' top immunotherapy, Opdivo, returned to growth with sales rising 2% to $1.8 billion.

The company's GAAP bottom line was weighed down by an $11.4 billion charge related to the acquisition of MyoKardia.  

Looking ahead

Bristol Myers Squibb anticipates adjusted earnings per share (EPS) of $7.35 to $7.55 in full-year 2021. That's up from its previous adjusted EPS guidance of $7.15 to $7.45. The drugmaker also affirmed its long-term financial targets through 2025 for low- to mid-single-digit revenue growth. Excluding sales for Pomalyst and Revlimid (which faces generic competition beginning in 2022), BMS projects low double-digit revenue growth.

Investors can look for more share buybacks this year. In January, BMS' board of directors authorized another $2 billion for its stock repurchase program, bringing the total amount authorized to around $6.4 billion.

Probably the best chances of positive catalysts for the pharmaceutical stock will come from key regulatory decisions in the months ahead. The U.S. Food and Drug Administration (FDA) should make three key approval decisions in May, two of which could give Opdivo additional approved indications and another for Zeposia in treating ulcerative colitis.

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