Bristol Myers Squibb’s new Chief Executive, Chris Boerner, revealed the company’s strategic direction during a recent conference call, emphasizing a focus on growth throughout the latter part of the decade.
However, he acknowledged the necessity of navigating a challenging transition period starting in 2026. Bristol’s shares saw a modest uptick of about 0.5% during early trading.
Boerner assumed the role of CEO in November, coinciding with the company’s adjustment of expectations for its current product portfolio.
Bristol Myers Squibb anticipates patent expirations for its leading drugs, Eliquis (a blood thinner) and Opdivo (a cancer immunotherapy), later in the decade.
To address this impending challenge, the company initiated a series of deals to replenish its drug development pipeline towards the end of the previous year.
Boerner delineated the company’s strategic plan, outlining three distinct phases for the decade ahead: a near-term growth phase, followed by a transition period, and ultimately, a push for sustainable top-tier growth in the late 2020s.
He stressed the importance of shortening the transition period by accelerating research and development efforts, expediting product approvals and launches, all while maintaining profit and loss discipline.
Bristol Myers Squibb surprised Wall Street by surpassing profit and revenue expectations in the fourth quarter, primarily driven by the performance of Revlimid, an aging blood cancer drug, and Reblozyl, a new anemia treatment.
However, Boerner emphasized the heightened vulnerability starting around 2026 when the company’s exposure becomes most acute.
This will coincide with potential revenue declines, particularly for Eliquis, when the United States implements negotiated drug prices for its Medicare program.
Opdivo may also encounter biosimilar competition towards the end of the decade.
In the fourth quarter, the company reported revenue of $11.48 billion, surpassing analysts’ predictions of $11.19 billion.
Bristol Myers Squibb’s earnings for the quarter, excluding certain one-time items, reached $3.5 billion, or $1.70 per share, exceeding analysts’ estimates by 17 cents per share.
Key products, including Revlimid, Reblozyl, Opdivo, and Eliquis, also outperformed expectations in terms of sales.
Looking ahead to 2024, Bristol Myers Squibb anticipates single-digit percentage growth in revenue compared to 2023, when total revenue reached $45 billion.
The company’s projected reported earnings for 2024 fall in the range of $7.10 to $7.40 per share, surpassing Wall Street’s estimate of $7.00 per share.