Bristol-Myers Squibb cuts annual earnings guidance; Q4 sales top estimates, driven by Opdivo, Eliquis

Bristol-Myers Squibb said Thursday alongside its fourth-quarter financial results that it expects earnings per share this year to be in the range of $2.70 to $2.90, cut from a prior estimate of $2.85 to $3.05 and below analyst predictions of $2.96. The company added that annual revenue is forecast to increase in the low-single digits.

In the quarter, Bristol-Myers Squibb noted that sales surged 22 percent year-over-year to $5.2 billion, topping analyst estimates of $5.1 billion. Meanwhile, net income in the three-month period reached $894 million, versus a loss of $197 million in the same quarter of 2015.

Concerning individual products, revenue from Opdivo reached $1.3 billion, up from $475 million in the prior quarter and besting expectations of $1.2 billion. Meanwhile, sales of Yervoy totalled $264 million, largely unchanged from the year-ago period, but falling short of projections of $300 million.

Earlier this month, Bristol-Myers Squibb's announced that it will not pursue accelerated approval of the combination of Opdivo and Yervoy for the first-line treatment of lung cancer following a review of available data (for related analysis, read ViewPoints: Bristol-Myers Squibb concedes more ground in PD-1 lung cancer race). Credit Suisse analyst Vamil Divan noted that Bristol Myers Squibb's decision to not pursue accelerated approval of the combination should not be viewed as an indication that the use of the PD-1 inhibitor and the CTLA-4 inhibitor together will not be successful, although Bloomberg Intelligence analysts indicated that the decision did increase the long-term risk of failure.

Analysts also viewed the move as a boost for Merck & Co., whose Keytruda was cleared by the FDA last October for the first-line treatment of advanced NSCLC, while the agency also recently accepted a filing seeking approval of the anti-PD-1 therapy plus chemotherapy for the first-line treatment of patients with metastatic or advanced NSCLC. However, earlier this month, Bristol-Myers Squibb and partner Ono Pharmaceutical reached an agreement with Merck to settle a patent infringement lawsuit regarding Keytruda, under which the latter will make an upfront payment of $625 million and sales royalties through 2026.

For other products, Bristol-Myers Squibb said that quarterly sales of Eliquis jumped 57 percent year-over-year to $948 million, versus forecasts of $967 million, while revenue from Orencia rose 16 percent to $625 million, ahead of analyst expectations of $607 million. In addition, sales of Sprycel climbed 15 percent to $494 million, besting expectations of $474 million. 

Regarding Bristol-Myers Squibb's virology portfolio, sales of Baraclude dropped by 4 percent to $296 million, while revenue from the Sustiva franchise was down 21 percent versus the year-ago quarter to $246 million. Moreover, revenue from the company's hepatitis C franchise plunged 51 percent to $226 million, missing analyst forecasts of $256 million, with sales from the Reyataz franchise declining by 24 percent to $206 million. 

"Bristol-Myers Squibb achieved outstanding operating and financial results in 2016, driven by strong commercial performance across our portfolio," remarked CEO Giovanni Caforio. Overall sales for the year lifted 17 percent to $19.4 billion, with net income reaching $4.5 billion, up from $1.6 billion in 2015.

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