Bristol Myers slashes Revlimid sales projection by $1B, now sees overall revenue decline in 2023

Securing FDA approvals last year for three drugs that each have peak sales potential of $4 billion bodes well for the long-term future of Bristol Myers Squibb. As for the near future, hard times are ahead.

That was the message the company sent in revealing its second quarter earnings as its three top-selling drugs—Eliquis, Revlimid and Opdivo—all meaningfully missed analysts’ expectations. BMS sliced its 2023 sales projection for blood cancer drug Revlimid by a whopping $1 billion and cut its overall revenue projection. 

Instead of a previous forecast of a 2% revenue increase for 2023, BMS now sees a decline in sales by a low single-digit figure.

In his prepared remarks, departing CEO Giovanni Caforio did not dance around the bad news, opening with an explanation of the company’s new outlook.

“We do not take an adjustment of this magnitude lightly,” said Caforio, who will step down in November and be replaced by chief operating officer Chris Boerner.

In addition to generic erosion for Revlimid—which the company had anticipated—Caforio said that the company found some “softness” in its revenues starting from the end of the first quarter and chalked it up to “an unusual increase in utilization of free drug” under a patient assistance program. 

In addition to the new Revlimid 2023 sales projection—from $6.5 billion to $5.5 billion—BMS also sliced $300 million from its forecast for Pomalyst. Sales of the multiple myeloma drug also took a hit in the second quarter—falling 6% year-over-year to $847 million—because of the same dynamics that affected Revlimid.

While these factors will continue in the second half of this year, the company does not expect them to sustain in 2024 as it has seen applications in the patient assistance program return to “normal levels,” Caforio said.

BMS also saw troubling signs in the quarter with its other aging stallwarts. Third Bridge analyst Lee Brown noted that Eliquis registered sales of $3.2 billion in the quarter, which was a 1% decline due largely to “generic erosion in Canada and the U.K.” Brown also cited sales of Opdivo coming in at $2.1 billion, which was a 4% increase but “fell short of consensus by nearly 8% as U.S. sales posted just a 2% gain.”

All told, BMS' revenue in the quarter came in at $11.23 billion, well short of analysts' average expectation of $11.82 billion and a 6% decline from the second quarter of 2022. And both the U.S. and international markets suffered.

BMS is counting heavily on its portfolio of nine new products. Those generated $862 million in sales in the quarter, up from $723 million in the previous period.

Driving the increase were Reblozyl, which raked in $234 million for a 35% year-over-year increase and Opdualag, which pulled in $154 million. Opdualag was one of the three new products approved last year. The others—Camzyos ($46 million) and Sotyktu ($25 million)—are also off to promising starts, the company said.

CAR-T drug Breyanzi was up to $100 million after making $71 million in the first quarter. But BCAM-targeted Abecma generated $132 million in sales, which was a decline from its $147 million in revenue in the first quarter. Abecma's haul fell 20% short of analyst projections, “suggesting the Street may need to reconsider its growth trajectory,” Brown wrote.

BMS is standing by the potential of its new drugs and in a vote of confidence will execute a $4 billion accelerated share repurchase program in the third quarter, Caforio said.

The company also stuck with its five-year targets, expecting growth between $8 billion and $10 billion from older brands and $10 billion to $13 billion in 2025 from its new product portfolio.

“Despite the short-term headwinds, [BMS] reaffirms prior 2020-2025 guidance, which is important—but will anyone believe it?” wrote Tim Anderson of Wolfe Research.