Will BMY's Growth Portfolio Drive Third-Quarter Results?

Bristol Myers’ BMY Growth Portfolio, comprising drugs like Opdivo, Reblozyl, Breyanzi, Camzyos and Opdualag, has stabilized its revenue base amid generic competition for its legacy drugs.

Among these, immuno-oncology drug Opdivo is the top revenue generator. Opdivo is approved for various oncology indications around the world, either as monotherapy or in combination with other drugs. Consistent label expansion of the drug has enabled it to maintain momentum.

The FDA had earlier granted approval to Opdivo Qvantig (nivolumab and hyaluronidase-nvhy) injection for subcutaneous use. The initial uptake has been strong.

The company now expects global Opdivo sales, together with Qvantig, to grow in the mid-to-high single-digit range in 2025, driven by strong performance in the first half.

Reblozyl has delivered a stellar performance since its approval and is expected to make a significant contribution to the top line. Strong momentum in cardiovascular drug Camzyos should further drive growth. Sales of CAR T cell therapy, Breyanzi, also continue to gain traction from the approval of new indications and expanded manufacturing capacity.

While the newer drugs boost sales, generic competition for legacy drugs, which account for the majority of total revenues, is a significant headwind. Legacy Portfolio sales continue to decline due to the ongoing generic impact on Revlimid, Pomalyst, Sprycel, and Abraxane, as well as the effect of the U.S. Medicare Part D redesign.

In such a scenario, the performance of new drugs is key to BMY’s growth.

Competition for BMY’s Key Drugs

Oncology is a key therapeutic area of focus for Bristol Myers, which is developing and delivering transformational medicines in this space.

The immuno-oncology space is dominated by pharma giant Merck’s MRK blockbuster drug Keytruda (pembrolizumab).    
Keytruda is approved for several types of cancer and alone accounts for around 50% of MRK’s pharmaceutical sales. Merck is currently working on different strategies to drive long-term growth of Keytruda.

Pfizer PFE is one of the largest and most successful drugmakers in the field of oncology. It has an innovative oncology product portfolio of antibody-drug conjugates (ADCs), small molecules, bispecifics and other immunotherapies that treat a wide range of cancers, including certain types of breast cancer, genitourinary cancer and hematologic malignancies, as well as certain types of melanoma, gastrointestinal, gynecological and lung cancer.  Pfizer also has oncology biosimilars in its portfolio.

Pfizer recently inked a licensing agreement with 3SBio for the development, manufacturing and commercialization of SSGJ-707, a bispecific antibody targeting PD-1 and VEGF, outside China. BMY is also trying to develop bispecific antibodies.

BMY’s Price Performance, Valuation and Estimates

Shares of Bristol Myers have lost 19.1% year to date against the industry’s growth of 11.6%.

From a valuation standpoint, BMY is trading at a discount to the large-cap pharma industry.  Going by the price/earnings ratio, BMY’s shares currently trade at 7.14x forward earnings, lower than its mean of 8.43x and the large-cap pharma industry’s 15.52X.

The Zacks Consensus Estimate for 2025 earnings per share has moved south to $6.42 from $6.50 in the past 60 days, while that for 2026 EPS has remained unchanged.

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

 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research