Bristol-Myers Squibb Company’s BMY first-quarter 2015 earnings (excluding special items) of 71 cents per share beat the Zacks Consensus Estimate of 50 cents and were up 54% year over year.
Net sales (excluding revenues from the diabetes alliance) in the first quarter climbed 10% to approximately $4 billion, driven by strong sales of drugs targeting the oncology market. Strong sales of the company’s rheumatoid arthritis drug, Orencia and anti-clotting drug Eliquis also boosted the top line in the reported quarter.
Total revenues were ahead of the Zacks Consensus Estimate of $3.8 billion. We note that Bristol-Myers had sold its diabetes business to AstraZeneca AZN.
The First Quarter in Detail
The company posted disappointing sales in international markets, which were more than offset by an increase in revenues in the U.S. International revenues were down 2% to $2 billion. Sales in U.S. markets climbed 16% to $2 billion.
Key cancer drugs at Bristol-Myers have performed very well in the first quarter of 2015. Leukemia drug, Sprycel, registered sales of $375 million, up 10%. Skin-cancer drug, Yervoy, contributed $325 million to total revenues during the reported quarter, up 20%. Sales of another oncology drug, Erbitux, slightly fell during the quarter. Erbitux sales decreased 2% to $165 million in the reported quarter.
Opdivo, which gained accelerated approval in Dec 2014 for the melanoma indication based on tumor response rate and the durability of response, generated revenues of $40 million. In March this year, Opdivo received its second FDA approval for the treatment of patients suffering from metastatic squamous non-small cell lung cancer with progression on or after platinum-based chemotherapy.
The performance of key drugs in the virology unit was disappointing. Sales of Baraclude declined 16% to $340 million. Sales of the drug are expected to decline further due to generic competition. Sales of HIV treatments, Reyataz and Sustiva, also dropped 15% and 9% to $294 million and $290 million, respectively.
Global sales of Abilify, approved for the treatment of schizophrenia and depression, were up 3% to $554 million. Sales of Orencia stood at $400 million, up 10%.
Sales of Eliquis were $355 million during the reported quarter, up approximately 26.3% sequentially. Bristol-Myers has a partnership with Pfizer PFE for Eliquis. The hepatitis C virus (HCV) franchise at Bristol-Myers contributed $264 million to the company’s top line in the reported quarter.
Adjusted marketing, selling and administrative expenses in the reported quarter were $893 million, 6.4% below the year-ago figure. Adjusted research and development expenses for the quarter decreased 4.9% to $854 million.
2015 Earnings Outlook
Bristol-Myers now expects adjusted earnings for 2015 in the range of $1.60–$1.70 per share (previous guidance: $1.55–$1.70 per share). The Zacks Consensus Estimate of $1.71 per share is marginally above the high end of the guidance range.
Meanwhile, in a separate press release, the company announced that it has commenced a cash tender offer for up to $400 million aggregate principal amount of specified series of outstanding debt.
Our Take
We are impressed by the strong sales of drugs like Orencia, Eliquis, Yervoy and Sprycel in the first quarter of 2015. We are also impressed by Bristol-Myers’ efforts to develop its pipeline. Shares of the company rose in pre-market trading.
We believe investor focus will remain on updates regarding the company’s high-profile immuno-oncology drug, Opdivo, going forward.
Bristol-Myers carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care space is Biogen BIIB. The company holds a Zacks Rank #1 (Strong Buy).
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