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Bristol Myers Squibb Beats Earnings Estimates and Raises Outlook Amid Cost-Cutting Measures

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Bristol Myers Squibb reported strong second-quarter earnings, surpassing Wall Street expectations and raising its full-year guidance as part of its broader strategy to cut costs and reinvest in key drug brands and R&D programs. The pharmaceutical giant has outlined plans to reduce $1.5 billion in expenses by 2025, which includes laying off over 2,000 employees and consolidating its sites.

Key Financial Highlights:

  • Earnings per share: Adjusted EPS of $2.07, compared to an expected loss of $1.63.
  • Revenue: $12.2 billion, up 9% year-over-year, versus the expected $11.55 billion.
  • Net income: $1.68 billion, or 83 cents per share, down from $2.07 billion, or 99 cents per share, in the prior year.

Guidance Update:

  • Full-year revenue forecast: Now projected to increase at the “upper end” of the low single-digit range, up from a low single-digit increase.
  • Full-year adjusted earnings guidance: Raised to 60-90 cents per share, up from the previous forecast of 40-70 cents per share.

Shares of Bristol Myers rose nearly 8% following the earnings report.

Performance Drivers:

  • Eliquis: The blockbuster blood thinner recorded $3.42 billion in sales, a 7% increase year-over-year, aligning with analyst expectations. Eliquis, which Bristol Myers co-owns with Pfizer, is anticipated to lose market exclusivity by 2028.
  • Revlimid: Despite facing competition from generics, the blood cancer drug brought in $1.35 billion in sales, surpassing the estimated $1.09 billion.
  • Opdivo: The cancer drug generated $2.39 billion in sales, exceeding the expected $2.29 billion.

Growth Portfolio:

  • Reblozyl: Sales were above analysts’ expectations, contributing significantly to the company’s growth.
  • Opdualag and Camzyos: Both drugs, along with Opdivo, drove revenue growth within the portfolio.
  • Abecma: The cell therapy for multiple myeloma recorded $95 million in sales, close to the expected $95.8 million.

Bristol Myers continues to face pressure to innovate and introduce new drugs to compensate for revenue losses from key treatments like Revlimid, Eliquis, and Opdivo, which will eventually lose their market exclusivity.

The company’s proactive measures to cut costs and reinvest in strategic areas underscore its commitment to sustaining growth and competitiveness in the pharmaceutical industry.

Novo Nordisk Shares Dip Amid Earnings Miss and Reduced Profit Outlook

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Novo Nordisk experienced a dip in its share price after posting weaker-than-expected net profit for the second quarter and revising its operating profit outlook downwards. The pharmaceutical giant reported a net profit of 20.05 billion Danish kroner ($2.93 billion) for the quarter ending in June, falling short of the 20.9 billion Danish kroner projected by LSEG analysts. Additionally, the company’s EBIT (earnings before interest and tax) was 25.93 billion Danish kroner, below the forecasted 26.86 billion Danish kroner.

In response to these results, Novo Nordisk adjusted its full-year 2024 operating profit growth expectations to a range of 20% to 28%, down from the previous 22% to 30%. This announcement caused the company’s shares to tumble nearly 7% before recovering slightly, trading down 2.71% by 9:40 a.m. London time.

Despite the disappointing second-quarter earnings, Novo Nordisk raised its sales growth guidance for the full year, expecting growth between 22% and 28% at constant exchange rates, up from the previous estimate of 19% to 27%. This optimism is partly driven by a 55% increase in sales of its popular weight loss drug, Wegovy, which reached 11.66 billion kroner in the second quarter compared to the same period in 2023.

CEO Lars Fruergaard Jørgensen expressed confidence in the company’s future growth, highlighting the potential for “attractive growth” in the coming months. He assured investors of the company’s ability to scale operations and supply patients, emphasizing that adjustments to rebates were a factor in the second-quarter results. Jørgensen remains positive about the long-term competitiveness of Novo Nordisk, even in the face of increasing competition from companies like Roche, which recently reported promising early-stage trial data for its obesity drug candidate.

Moreover, Novo Nordisk’s Wegovy has recently achieved significant milestones. The drug was approved for sale in China, the world’s second-largest economy, and received backing from medical regulators in the U.K. and European Union for reducing risks of serious heart events among overweight and obese adults.

Merck Shares Fall 9% Despite Earnings Beat and Strong Demand for Key Drugs

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Merck reported second-quarter revenue and adjusted earnings that exceeded Wall Street’s expectations, driven by strong sales from its blockbuster cancer drug Keytruda and other treatments in its oncology and vaccines portfolios, as well as a newly launched cardiovascular drug. Despite this, Merck’s shares fell by 9% due to lighter-than-expected sales of Gardasil, a vaccine for HPV, exacerbated by shipment issues in China.

Merck raised its full-year sales forecast to $63.4 billion to $64.4 billion, slightly up from its previous guidance of $63.1 billion to $64.3 billion. However, it lowered its adjusted profit guidance to a range of $7.94 to $8.04 per share, down from $8.53 to $8.65 per share, reflecting one-time charges for its acquisitions of Harpoon Therapeutics and EyeBio.

For the second quarter, Merck reported adjusted earnings per share of $2.28, surpassing the expected $2.15, and revenue of $16.11 billion, above the anticipated $15.84 billion. The company posted a net income of $5.46 billion, or $2.14 per share, compared to a net loss of $5.98 billion, or $2.35 per share, in the same period last year.

Keytruda recorded $7.27 billion in revenue, up 16% year-over-year, driven by higher uptake for earlier-stage cancers and strong demand for metastatic cancers. Gardasil sales increased by only 1% to $2.48 billion due to shipment timing issues in China. Winrevair, approved in March for treating a progressive lung condition, posted $70 million in revenue, while Capvaxive, a newly approved pneumococcal vaccine, is expected to drive future growth.

Merck’s pharmaceutical division saw a 7% increase in revenue to $14.41 billion. The company’s Type 2 diabetes treatment, Januvia, faced a 27% decline in sales to $629 million due to lower demand, prices, and generic competition. Sales of Merck’s Covid antiviral pill, Lagevrio, fell by 46% to $110 million but still exceeded expectations.

Merck’s animal health division reported $1.48 billion in sales, up 2% from the previous year, but slightly below analyst expectations. Despite strong overall performance, investor concerns about Gardasil sales and future challenges in the pharmaceutical landscape influenced the decline in Merck’s stock.