Bristol Myers Squibb beats on revenue, launches $1.5 billion cost cuts as it posts quarterly loss

Bristol Myers Squibb on Thursday reported first-quarter revenue that topped expectations as its blockbuster blood thinner Eliquis and several new drugs posted sales growth.

But the pharmaceutical company swung to a quarterly loss due to one-time charges related to its recently closed deals. It also said it plans to cut $1.5 billion in costs by 2025, and reinvest the money in drug development.

Bristol Myers will lay off 2,200 employees this year, discontinue some drug programs, eliminate open roles, consolidate its sites and reduce management layers, among other cost savings. The company said it will prioritize investment in its key drug brands, optimize operations across the company and focus its resources on research and development programs that could deliver the highest returns for the company and the greatest health benefits for patients.

Two-thirds of savings are associated with drug research and development, Bristol Myers Squibb executives said during an earnings call on Thursday. The company has discontinued around 12 drug programs so far and will evaluate others to drop throughout year, said Bristol Myers Chief Medical Officer Dr. Samit Hirawat.

Bristol Myers CEO Chris Boerner added that the majority of savings are coming from existing in-house operations, not from newly acquired companies.

“We are taking important actions to effectively manage the decade,” Boerner said during the call. “Our management team has focused on ensuring the discipline execution required to deliver both this year and set us up for the longer term.”

For the first quarter, Bristol Myers said the charges that weighed it down primarily reflect its $14 billion acquisition of neuroscience drugmaker Karuna Therapeutics and collaboration agreement with SystImmune, a subsidiary of a Chinese biotech startup, to co-develop and market its experimental cancer treatment. 

Those deals come as Bristol Myers faces pressure to launch new drugs and offset the potential loss of revenue from top-selling treatments. The company’s popular blood cancer treatment Revlimid – and eventually, Eliquis and cancer immunotherapy Opdivo – faces competition from cheaper copycats. 

Shares of Bristol Myers fell more than 1% in premarket trading Tuesday.

Here’s what Bristol Myers Squibb reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

• Loss per share: $4.40 adjusted vs. $4.44 expected
• Revenue: $11.87 billion vs. $11.46 billion expected 

Bristol Myers, one of the world’s largest pharmaceutical companies, swung to a net loss of $11.9 billion, or $5.89 per share, during the first quarter. That compares to net income of $2.3 billion, or $1.07 per share, for the same period a year ago. 

Excluding certain items, its adjusted loss per share was $4.40 for the period. 

The loss reflects a one-time $6.30 per share charge related to the recently closed deals, Bristol Myers said in a release.

Bristol Myers reported first-quarter revenue of $11.87 billion, up 5% from the year-earlier period. 

The company reiterated its full-year revenue forecast of a low single-digit increase. But Bristol Myers lowered its 2024 adjusted earnings guidance to 40 cents to 70 cents per share to reflect the impact of recent deals. 

That compares with a previous forecast of $7.10 to $7.40 per share, which did not include charges related to its buyouts of Karuna Therapeutics and radiopharmaceutical company RayzeBio, along with divestitures and other items. 

Eliquis, which Bristol Myers shares with Pfizer, is among the first 10 drugs facing ongoing price negotiations with the federal Medicare program. The blood thinner is expected to lose market exclusivity by 2028.

The impact of those negotiations on Eliquis is still unclear, Bristol Myers executives said during the call. The final negotiated price for the drug will be published later this year and go into effect in 2026, which is when the company expects a hit to revenue and profit.

Anemia drug Reblozyl and advanced melanoma treatment Opdualag also posted revenue growth during the first quarter. 

Reblozyl booked $354 million in sales, up 72% from the year-earlier period. Analysts had expected revenue of $330.8 million, according to FactSet.

Opdualag generated $206 million in sales for the first quarter, which is up 76% from the same period a year ago. Analysts had expected revenue of $206.5 million, FactSet estimates said. 

The performance of other new drugs fell short of Wall Street’s expectations. 

Abecma, a cell therapy for a rare blood cancer called multiple myeloma, drew $82 million in sales for the quarter. Analysts had expected $112.6 million in revenue, according to FactSet. 

The U.S. Food and Drug Administration earlier this month expanded its approval of that drug, allowing multiple myeloma patients to use it as an earlier line of treatment.

Meanwhile, Revlimid raked in $1.67 billion in sales, down 5% from the same period a year ago. 

Still, that surpassed analysts’ revenue expectations of $1.22 billion or the drug, according to FactSet estimates.  

Opdivo generated $2.07 billion in sales for the quarter, down 6% from the first quarter of 2023. Analysts had expected the drug to book $2.3 billion in revenue for the period, FactSet estimates said.