Bristol Myers Squibb announced on Thursday that its first-quarter revenue surpassed expectations, driven by strong sales of its blood cancer treatment Revlimid and the blockbuster blood thinner Eliquis.
Despite the revenue success, the pharmaceutical company reported a quarterly loss due to one-time charges associated with recent deals. Bristol Myers plans to implement cost-cutting measures totaling $1.5 billion by 2025, intending to reinvest the funds in drug development.
The company intends to reduce costs through various means, including layoffs of 2,200 employees, discontinuation of certain drug programs, elimination of open roles, site consolidations, and management layer reductions.
Bristol Myers emphasized that it would prioritize investment in key drug brands, optimize operational efficiency, and concentrate resources on research and development programs with high potential returns and significant health benefits for patients.
During an earnings call, Bristol Myers executives highlighted that two-thirds of the savings would stem from drug research and development efforts. The company has already discontinued around 12 drug programs and plans to evaluate others for potential termination throughout the year.
CEO Chris Boerner stressed that the majority of savings would originate from existing in-house operations rather than newly acquired companies. He emphasized the importance of disciplined execution to achieve both short-term goals and long-term objectives.
The first-quarter results reflect charges related to Bristol Myers’ $14 billion acquisition of neuroscience drugmaker Karuna Therapeutics and a collaboration agreement with SystImmune, a subsidiary of a Chinese biotech startup, to co-develop and market an experimental cancer treatment.
These deals are part of Bristol Myers’ strategy to launch new drugs and counteract potential revenue losses from its top-selling treatments like Revlimid, Eliquis, and Opdivo, which face competition from cheaper alternatives.
While Bristol Myers exceeded revenue expectations for the first quarter, it reported a net loss of $11.9 billion, or $5.89 per share. This contrasts with net income of $2.3 billion, or $1.07 per share, for the same period last year. Adjusted for certain items, the company reported a loss per share of $4.40.
The company reported revenue of $11.87 billion for the first quarter, a 5% increase from the previous year. Bristol Myers reiterated its full-year revenue forecast for a low single-digit increase but adjusted its 2024 earnings guidance to reflect the impact of recent deals.
Revenue growth in the first quarter was primarily driven by higher sales of Eliquis and several newer drugs. Eliquis generated $3.72 billion in sales, surpassing analyst expectations. Meanwhile, Revlimid sales were down, but still exceeded analyst estimates.
Other drugs, such as Reblozyl and Opdualag, posted significant revenue growth, while newer drugs like Abecma fell short of Wall Street’s expectations. Opdivo, an older drug, saw a decline in sales compared to the same period last year.
