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What Went Wrong for Bristol Myers Squibb in Q1

By Keith Speights - Apr 29, 2021 at 10:16AM

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Part of the problem was the company's strong performance a year ago.

There's been plenty of good news for Bristol Myers Squibb (BMY -0.21%) in recent weeks. The company has won key regulatory approvals for Abecma (ide-cel), Breyanzi (liso-cel), and Opdivo. It has reported positive results from multiple clinical studies.

Bristol Myers Squibb announced its first-quarter results before the market opened on Thursday. This time the news wasn't as good as investors would have preferred, with the big pharma stock slipping more than 3% in early trading. Here are the highlights from the Q1 update.

First-quarter key on keyboard.

Image source: Getty Images.

By the numbers

Bristol Myers Squibb reported revenue in the first quarter of $11.1 billion, a 3% year-over-year increase. This result narrowly missed the average analysts' revenue estimate of $11.12 billion.

The company announced net income in the first quarter of $2 billion, or $0.89 per share, based on generally accepted accounting principles (GAAP). In the prior-year period, BMS posted a GAAP net loss of $775 million, or $0.34 per share.

However, the drugmaker's year-over-year comparison for its non-GAAP bottom line looked somewhat better. BMS recorded non-GAAP earnings of $4 billion, or $1.74 per share, compared to $4 billion, or $1.72 per share, in the prior-year period. The consensus Wall Street estimate was for non-GAAP earnings of $1.82 per share.

Behind the numbers

Only one of Bristol Myers Squibb's blockbuster drugs generated double-digit percentage year-over-year sales growth in Q1. Sales for cancer immunotherapy Yervoy jumped 15% to $456 million. Two of the company's top cancer drugs even experienced sales declines. Sales for Opdivo fell 3% to $1.7 billion, while sales for Sprycel tumbled 10% to $470 million.

Most of the drugmaker's key products delivered modest single-digit growth. Sales for BMS' top-selling drug, Revlimid, increased only 1% to $2.9 billion. Abraxane raked in $314 million, up 5% year over year. Sales for autoimmune disease drug Orencia rose 6% to $758 million. Multiple myeloma drug Pomalyst's sales totaled $773 million, an 8% increase. Sales for blood thinner Eliquis grew 9% year over year to nearly $2.9 billion.

What happened? Blame it on COVID-19. However, it's not that BMS faced especially significant headwinds in the first quarter of 2021. Instead, the buying patterns in the prior-year period, with heavy stocking as the pandemic began, made year-over-year comparisons challenging.

Bristol Myers Squibb's lineup includes several newer drugs that could be big winners over time such as Zeposia and Inrebic. So far, though, the only one in the group that's begun to really break out is anemia drug Reblozyl, with Q1 sales increasing to $112 million from $8 million in the prior-year period.

Looking ahead

The company now projects GAAP earnings per share (EPS) for full-year 2021 between $3.18 and $3.38, up from its previous forecast of a range of $3.12 to $3.32. Non-GAAP EPS is still expected to be between $7.35 and $7.55. BMS didn't provide detailed revenue guidance but anticipates high single-digit growth.

Despite its lackluster Q1 results, there's a pretty good argument that Bristol Myers Squibb still deserves a place in investors' portfolios. Opdivo could regain momentum after securing multiple key regulatory approvals with more potentially on the way. The company expects its newer drugs, including cell therapies Abecma and Breyanzi, to generate huge sales over the next few years.

BMS also has other pipeline candidates that could boost its fortunes. For example, the U.S. Food and Drug Administration (FDA) is scheduled to make a decision on approval of mavacamten in treating symptomatic obstructive hypertrophic cardiomyopathy (a disease where heart muscles thicken abnormally) by Jan. 28, 2022.

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