Revenue for 2023 is now expected to decline to the low single digits instead of the 2% growth projected. Leadership pointed to the company’s multiple myeloma drugs as the main drags on earnings.
Pictured: Bristol-Myers Squibb building/iStock, hapabapa
Bristol-Myers Squibb struggled in the second quarter as its blood cancer treatment Revlimid, in particular, disappointed sales expectations. The pharma giant posted lower-than-expected earnings and lowered full-year guidance for 2023 in its financial results reported on Thursday.
Total net sales for the second quarter were $11.2 billion, a nearly 6% drop from last year, falling short of analysts’ average forecast by $600 million.
Revenue for 2023 is now expected to decline in the low single digits, BMS CFO David Elkins said on the earnings call, instead of the 2% growth projected. The company cut its guidance ranges for earnings per share to $7.35 to $7.65 from $7.95 to $8.25.
“We do not take an adjustment of this magnitude lightly,” BMS CEO Giovanni Caforio told investors on a Thursday morning earnings call.
Caforio offered up the company’s multiple myeloma drugs Revlimid and, to a lesser effect, Pomalyst as the main drags on revenue. The company had anticipated a decline in sales with generic competition on the rise and an increased number of patients utilizing the independent BMS Patient Assistance Foundation.
However, the drop in sales was more drastic than estimated. BMS’ revised guidance reflects a $1 billion decrease for Revlimid, dropping 2023 sales to $5.5 billion. Pomalyst had a milder impact on the decline at about $300 million.
Caforio said there had been an “unusual increase” in the utilization of the drugs provided by the foundation, which provides free medicine to qualified patients not financially supported elsewhere. Once an application has been approved, the drug is provided for free for a full calendar year.
“We do not expect these dynamics to continue into next year,” Caforio said, stating the foundation applications are returning to normal levels and changes to Medicare Part D coverage, effective in 2024, will improve patient affordability.
“We now expect a lower step down of approximately $1.5 billion in 2024 and $2 billion in 2025,” he said with regard to Revlimid and Pomalyst.
Beyond the oncology drugs, many of the company’s products seem to miss analysts’ expectations. Opdivo posted sales of $2.1 billion, below the $2.34 billion estimate, while Eliquis came in at $3.2 billion, below the $3.4 billion estimate.
“Clearly this was a disappointing quarter, and not just due to Revlimid generic erosion,” WIlliam Blair analyst Matt Phipps wrote in a note to investors.
The Opdualag launch was one of the few positives, with sales of $154 million beating the $41 million estimate. However, “the recent decision to not launch in Germany may hurt geographical expansion,” Phipps wrote.
Overall, BMS’ new products contributed $862 million in the second quarter, a 78% increase over the same period in 2022. Revenue for 2025 is forecasted at $10 to $13 billion for the portfolio, with important catalysts ahead.
The second-quarter earnings release also announced a $4 billion share repurchase agreement for the third quarter, something Caforio has done before to return capital to shareholders and increase earnings per share. In the fourth quarter of 2022, BMS repurchased about $2.4 billion worth of its shares.
Kate Goodwin is a freelance life science writer based in Des Moines, Iowa. She can be reached at kate.goodwin@biospace.com and on LinkedIn.
