Ever-busy global pharmaceutical company Bristol Myers Squibb (BMY 0.27%) had quite an active February. Since much of the news coming from it was positive, investors were largely bullish on its future, even after price cuts to its No. 1 drug kicked in. This optimism was reflected in a share price rise of over 13% over the month.
Growth where it counts
Near the start of February, Bristol Myers Squibb published its final earnings report for 2025. It managed to grow its fourth-quarter revenue, albeit modestly, by 1% year over year to $12.5 billion. We can't say the same for net income not under generally accepted accounting principles (GAAP), which sank at a double-digit rate of almost 24% to $2.6 billion, or $1.26 per share.
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That sounds a bit scary, but it's the latest chapter in a story that's been playing out for the healthcare giant for some time. It still derives much of its coin from the so-called "legacy portfolio," its collection of medicines that have either hit their patent cliffs or are rapidly approaching them.
This includes the above-mentioned drug, blood thinner Eliquis, the net profits for which are shared with the company's big pharma partner Pfizer. In the quarter, legacy's revenue dived by 15% to slightly more than $5.1 billion.
The contrast with Bristol Myers Squibb's very promising "growth portfolio" of drugs that have some time before the cliff looms is stark. Led by blockbuster cancer drug Opdivo, growth's growth (sorry) for the quarter was 16%, rising to nearly $7.4 billion.
Regardless, the company easily exceeded the consensus analyst estimates in the quarter. With the expected decline in the legacy portfolio baked into their forecasts, analysts on average projected revenue of slightly over $12.2 billion and non-GAAP (adjusted) net income of $1.12 per share.
Another positive factor in Bristol Myers Squibb's earnings release was management's encouraging guidance. It believes it will post revenue of roughly $46 billion to $47.5 billion for the full year 2026, with adjusted net income of $6.05 to $6.35 per share. Even at the low end, these are higher than the consensus analyst projections, specifically a little more than $44 billion and $6.02 per share, respectively.
That top line range lies below 2025's revenue of almost $48.2 billion. One major factor in this is cuts to the Eliquis price, for both Medicare patients and those paying cash for the drug in direct-to-consumer transactions. Given that development, the anticipated (and modest) top-line slide isn't overly concerning.
NYSE: BMY
Key Data Points
Progress with the pipeline
In other good news, Bristol Myers Squibb reported in mid-February that the U.S. Food and Drug Administration (FDA) had accepted its new drug application for iberdomide as a part of a combination therapy for multiple myeloma. It also published a positive readout from a Phase 2 registrational trial of the specialized anemia treatment Reblozyl.
Although the legacy portfolio will continue to weigh on the company's performance, the growth drug lineup is strong and should provide a promising future for Bristol Myers Squibb. While this stock requires patience, I think it's going to be a winner in the mid- to long term.
