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Will Opdivo & Eliquis Drive Bristol-Myers (BMY) Q2 Earnings?

Zacks Equity Research

Bristol-Myers Squibb Company BMY is a global specialty biopharmaceutical company. Its key oncology products are Opdivo, Sprycel, Yervoy and Empliciti. Beyond oncology, the company focuses on immunology and cardiovascular drugs like Orencia and Eliquis.

Bristol-Myers’ immuno-oncology drug, Opdivo, is approved for multiple indications and is the primary growth driver. The drug is expected to maintain momentum in the second quarter. It generated sales of $1.8 billion in the first quarter, increasing 19% year over year. The uptake of the drug continues to be strong, particularly in new indications of first-line renal cell carcinoma and adjuvant melanoma. The trend should continue in the second quarter despite stiff competition from the likes of Merck’s MRK Keytruda and Roche’s RHHBY Tecentriq.

However, investors will also focus on recent pipeline setbacks. The phase III CheckMate-498 trial evaluating Opdivo plus radiation versus temozolomide plus radiation in patients with newly diagnosed O6-methylguanine-DNA methyltransferase (MGMT)-unmethylated glioblastoma multiforme (GBM) did not meet its primary endpoint of overall survival (OS) at final analysis.

Moreover, CheckMate-459, a randomized phase III study evaluating Opdivo compared to Nexavar as a first-line treatment in patients with unresectable hepatocellular carcinoma (HCC), also did not achieve statistical significance for its primary endpoint of OS.

Nevertheless, the performance of blood thinner drug, Eliquis, was strong in the first quarter, propelled by increased share in the novel oral anticoagulant (NOAC) market, and should boost sales in the second quarter.  Oncology drug, Sprycel, should contribute positively to the top line, driven by recent label expansions.

Rheumatoid arthritis (RA) drug, Orencia, also contributes to the company’s top line. The recent label expansion of the drug should further boost sales. Yervoy should also continue with its stellar performance in the second quarter.

The Zacks Consensus Estimate for second-quarter sales and earnings is pegged at $6.03 billion and $1.06, respectively.

Apart from the quarterly results, investors will also focus on further updates on the company’s impending acquisition of Celgene Corp. CELG. Bristol-Myers needs to sell one of Celgene’s blockbuster drugs, Otezla, to complete the impending merger on a timely basis, in light of concerns expressed by the U.S. Federal Trade Commission (FTC).

Bristol-Myers’ shares have decreased 17.7% in the year so far compared with the industry’s decline of 1.3%.

 

Bristol-Myers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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