Biotech giant Bristol-Myers Squibb Company BMY is scheduled to report first-quarter 2025 results on April 24, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $10.74 billion and $1.54 per share, respectively.

Earnings estimate for 2025 has increased to $6.78 from $6.75 per share over the past 30 days, while that for 2026 has decreased to $6.06 from $6.08. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

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BMY’s Earnings Surprise History

BMY has an excellent track record. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.18%. In the previously reported quarter, the company’s earnings beat estimates by 14.38%.

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What Our Model Predicts for BMY

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP for BMY is +0.89%. The company currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Factors Influencing BMY’s Q1 Results

Total quarterly revenues are likely to have been impacted by a decline in sales from the legacy portfolio, which includes Eliquis, Revlimid, Pomalyst, Sprycel and Abraxane, among others.

Generic competition for Sprycel, Revlimid, Abraxane and Pomalyst has likely pulled down revenues from this portfolio.

The Zacks Consensus Estimate for Pomalyst’s sales is pegged at $694 million and our model estimate for the same is pinned at $725 million.     

Due to the impact of the Medicare Part D redesign, Eliquis' sales growth in the United States might have been tempered sequentially.

Both the Zacks Consensus Estimate and our model estimate for Eliquis’ sales are pegged at $3.4 billion.

Bristol-Myers collaborated with Pfizer PFE for Eliquis in 2007. Profits and losses are shared equally worldwide, except in certain countries where Pfizer commercializes Eliquis and pays BMY a sales-based fee.

Nonetheless, this decline has likely been partially offset by an increase in growth product portfolio sales. Growth portfolio primarily comprises Opdivo, Orencia, Yervoy, Reblozyl, Opdualag, Abecma, Zeposia, Breyanzi, Camzyos, Sotyku, Krazati and others.

Consistent label expansions in newer metastatic and adjuvant indications have likely maintained momentum for immuno-oncology drug Opdivo in the first quarter. The Zacks Consensus Estimate and our model estimate for Opdivo sales are pegged at $2.2 billion and $2.1 billion, respectively.

The Zacks Consensus Estimate and our model estimate for Orencia sales are pegged at $760 million and $775 million, respectively.

The Zacks Consensus Estimate and our model estimate for Yervoy sales are pegged at $607 million and $597.4 million, respectively.

Reblozyl posted solid growth in both the United States and international markets in the last reported quarter. Sales in the United States are being driven by strong demand due to a broad label in the first-line treatment for anemia in adults with lower-risk myelodysplastic syndromes who may require transfusions. International sales growth, driven by strong launch in Europe and Japan, has also likely boosted sales of this drug in the first quarter.

The Zacks Consensus Estimate and our model estimate for Reblozyl sales are pegged at $483 million and $493.9 million, respectively.

Strong growth in Opdualag (first-line melanoma) demand in the United States and encouraging uptake in newly launched markets are likely to have fueled sales. Both the Zacks Consensus Estimate and our model estimate for Opdualag sales are pegged at $257 million.

Breyanzi sales have likely benefited due to its best-in-class profile and strong demand growth across all its approved indications.  Camzyos sales have likely seen strong growth, driven by increased demand in the United States on the back of new patient starts and higher demand in newly launched markets outside the country. Zeposia’s sales, too, are likely to have increased, driven by accelerated demand in multiple sclerosis indications.

Abecma's uptake has not been that impressive. BMY has a collaboration agreement with 2seventy bio, Inc. TSVT for Abecma.

Sotyktu sales have likely declined in the first quarter due to higher rebates.

The newly launched schizophrenia drug Cobenfy has likely seen increased traction.

In April 2024, BMY announced a strategic cost-reduction plan that should result in approximately $1.5 billion savings by the end of 2025. As of the end of the fourth quarter of 2024, BMY realized approximately $1.1 billion in savings. It expects the remaining $400 million to be realized in 2025.

Concurrent with the fourth-quarter results, BMY announced an expansion to its existing strategic productivity initiative, which will include approximately $2 billion in additional annualized cost savings by the end of 2027 (with approximately $1 billion to be achieved in 2025).

Consequently, operating expenses are likely to have decreased in the first quarter.

BMY’s Price Performance and Valuation

Shares of BMY have lost 10.8% year to date compared with the industry’s decline of 6.1%. The stock has also underperformed the sector and the S&P 500 in this timeframe.

Bristol Myers Underperforms Industry, Sector & S&P 500

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Going by the price/earnings ratio, BMY’s shares currently trade at 7.51x forward earnings, lower than its mean of 8.60x and 14.77x for the large-cap pharma industry.

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Investment Thesis for BMY

The uptake of new drugs has been impressive for BMY, giving anxious investors a ray of hope. Drugs like Reblozyl, Breyanzi, Camzyos and Opdualag have enabled BMY to stabilize its revenue base amid generic competition for its legacy drugs.

Approval of additional new drugs and label expansion of top drugs should further diversify its pipeline.The approval of Cobenfy for schizophrenia broadens BMY’s portfolio and validates the acquisition of Karuna Therapeutics.

Cobenfy represents the first new pharmacological approach to treating schizophrenia in decades. The initial uptake is encouraging, with sales of $10 million in 2024. This drug is expected to contribute meaningfully to BMY’s top line in the coming years as it looks to expand the drug’s label into other indications (Alzheimer's disease and bipolar 1 disorder).

BMY made strategic acquisitions to augment its product portfolio, and these seem to be paying off now. However, there is a long way to go. On the other hand, the company has taken on colossal debt to finance these acquisitions.

Opdivo continues to maintain momentum as well. The FDA recently granted approval to Opdivo Qvantig (nivolumab and hyaluronidase-nvhy) injection for subcutaneous use.

Stay Invested in BMY Stock

Large biotech companies are generally considered safe havens for investors interested in this sector. BMY’s efforts to revive the top line in the face of generic challenges for key drugs are commendable.

However, we recommend investors to wait and watch how 2025 plays out for BMY as the company’s outlook was not bright.

For investors already owning the stock, staying invested would be a prudent move. The company’s attractive dividend yield is a strong positive.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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