Will The Decline in Legacy Drugs Pull Down BMY's Top Line?

Bristol Myers’ BMY legacy portfolio comprises Eliquis, Revlimid, Pomalyst, Sprycel and Abraxane.

Revenues for the Legacy Portfolio plunged 20% in the first quarter to $5.64 billion due to the continued generic impact on Revlimid, Pomalyst, Sprycel and Abraxane, as well as the effects of the U.S. Medicare Part D redesign.

Blood thinner drug Eliquis’ sales of $3.56 billion were down 4% due to the impact of Medicare Part D redesign in the United States. The company expects sales to steadily increase in the second half of 2025 due to the elimination of the coverage gap.

Multiple myeloma (MM) drug Revlimid revenues plummeted 44% to $936 million due to lower demand on account of generic erosion.

MM drug Pomalyst generated sales of $658 million, down 24% year over year. Leukemia drug Sprycel sales nosedived 53% year over year to $175 million due to generic competition.  Abraxane revenues declined 52% to $105 million.

While drugs like Reblozyl, Breyanzi, Camzyos and Opdualag have enabled BMY to stabilize its revenue base, an important point to consider is that the legacy portfolio sales accounted for 50% of total sales in the first quarter.

Competition for BMY’s Key Drugs

BMY’s growth portfolio primarily comprises Opdivo, Orencia, Yervoy, Reblozyl, Opdualag, Abecma, Zeposia, Breyanzi, Camzyos, Sotyku, Krazati and others.

Oncology is a key therapeutic area of focus for Bristol Myers, which is developing and delivering transformational medicines in this space. However, BMY faces competition from large pharma companies like Merck MRK and Pfizer PFE.

The immuno-oncology space is dominated by Merck’s blockbuster drug Keytruda (pembrolizumab).    

Keytruda is approved for several types of cancer and alone accounts for around 50% of its MRK’s pharmaceutical sales. Merck is currently working on different strategies to drive long-term growth of Keytruda.

Pfizer 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 and markets six of them for cancer.

BMY’s Price Performance, Valuation and Estimates

Shares of Bristol Myers have lost 14% year to date compared with the industry’s decline of 0.6%.

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 7.45x forward earnings, lower than its mean of 8.86x and the large-cap pharma industry’s 15.09X.

The Zacks Consensus Estimate for 2025 earnings per share has moved down to $6.76 from $6.89 in the past 60 days and that for 2026 is down five cents.

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

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