Bristol Myers’ Growth Drugs Hit $7.7 Billion: Rapid Earnings Reaction
Key Points
Bristol Myers Squibb’s Growth Portfolio of newer drugs grew 12% to $7.7 billion in the third quarter, supplying nearly all of the company’s 7% revenue gain to $13.1 billion.
Adjusted EPS fell 17% to $1.35, but mostly because of deal accounting, not a weaker core business.
Bristol Myers Squibb's (NYSE:BMY) Growth Portfolio of newer drugs grew 12% to $7.7 billion in the third quarter, supplying nearly all of the company's 7% revenue gain. Shares were roughly flat in midday trading. Bristol now grows on its newer medicines. The drop in adjusted earnings reflects the cost of buying its next ones, not a weaker core business.
Key Numbers
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- Total revenue: $13.1 billion, up 7% from the prior-year quarter
- Growth Portfolio revenue: $7.7 billion, up 12%
- Earnings per share: $1.05 GAAP and $1.35 adjusted, with adjusted down 17% from $1.63
- 2026 revenue guidance: raised to $49.75 billion to $50.25 billion
What It Means
The Growth Portfolio added roughly $830 million in sales from a year ago, about as much as the whole company added. The release credits Opdivo Qvantig, Breyanzi and three other drugs, so growth doesn't hang on a single launch. That breadth is what a company replacing aging blockbusters needs.
The Legacy Portfolio rose 1%, but only because Eliquis outran generic erosion across the older drugs. Eliquis faces its own patent expiration later this decade, so that stability is temporary.
The earnings decline is mostly deal accounting. Acquired IPRD charges are upfront payments for drug candidates licensed from other companies. Net of licensing income, they cost $0.58 a share. The release raises the sales outlook but only "updates" the adjusted EPS range, which now absorbs those charges. Bristol is spending today's earnings to refill its pipeline before Eliquis fades.
What to Watch Next
Track whether the Growth Portfolio holds double-digit growth as Eliquis gains slow. Also watch whether the licensed programs produce data that justifies their price.
David Kretzmann has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb. The Motley Fool has a disclosure policy.