Bristol Myers Squibb surpasses earnings expectations and enhances its forecast after cutting expenses.

• Bristol Myers Squibb exceeded expectations with its second-quarter earnings and revenue, prompting the company to revise its full-year forecast.
• The company's blockbuster blood thinner Eliquis and a portfolio of drugs are expected to drive long-term growth, with revenue growth primarily being driven by these factors.
• Bristol Myers plans to reduce expenses by $1.5 billion by 2025 and allocate the savings to strengthen its drug brands and R&D initiatives.

The drugmaker reported second-quarter earnings and revenue that exceeded expectations and increased its full-year forecast as it aims to reduce expenses.

The pharmaceutical giant has revised its full-year revenue forecast to a higher range, with an increase in the "upper end" of the low single-digit range. This is a significant improvement from its previous guidance in April, which predicted a low single-digit increase in sales.

The company updated its 2024 adjusted earnings guidance to a range of 60 cents to 90 cents per share, an increase from the previous forecast of 40 cents to 70 cents per share.

Nearly 5% rise in premarket trading of Bristol Myers shares occurred on Friday due to the company's results.

By 2025, Bristol Myers aims to reduce costs by $1.5 billion and allocate the savings towards strengthening its key drug brands and R&D initiatives. In April, the company announced that it would lay off over 2,000 employees, streamline certain drug programs, and consolidate its facilities as part of its cost-cutting measures.

Based on a survey of analysts by LSEG, the actual results of Bristol Myers for the second quarter differed from Wall Street's expectations.

• Earnings per share: $2.07 adjusted vs. loss of $1.63 expected
• Revenue: $12.2 billion vs. $11.55 billion expected

The revenue of the pharmaceutical giant increased by 9% from the previous year to $12.2 billion.

In the second quarter, Bristol Myers reported a net income of $1.68 billion, which amounts to 83 cents per share. This is lower than the net income of $2.07 billion, or 99 cents per share, recorded in the year-earlier period.

The adjusted earnings per share for the quarter was $2.07.

The increase in second-quarter sales was mainly due to Eliquis and a set of drugs that the company believes will provide long-term growth. One of these drugs is Opdivo, which exceeded sales expectations in the quarter.

Despite facing competition from cheaper generics, Bristol Myers' blood cancer drug Revlimid still exceeded analysts' revenue estimates for the period.

The pharmaceutical company must introduce new medications to compensate for the decline in sales from Revlimid and other top-performing drugs that will eventually lose their market exclusivity, such as Eliquis and Opdivo.

The negotiations with the federal government for a new price for Eliquis drug for certain Medicare patients could lead to a decrease in sales in 2026. These negotiations, a key provision of President Joe Biden's Inflation Reduction Act, will end in August.

New drug portfolio, Eliquis post growth

According to FactSet, Eliquis sales for the quarter were $3.42 billion, up 7% from the previous year, meeting analysts' expectations for the drug.

By 2028, the blood thinner that Bristol Myers and Pfizer share will lose its market exclusivity.

Despite a 8% decline in sales from the previous year, Revlimid exceeded analysts' revenue expectations by $1.26 billion.

The growth portfolio of the company generated $2.39 billion in sales for the quarter, mainly driven by higher demand for Opdivo. Analysts surveyed by FactSet had expected that treatment to bring in $2.29 billion in revenue.

During the second quarter, the growth portfolio's revenue was boosted by the successful sales of three drugs: Reblozyl for anemia, Opdualag for advanced melanoma, and Camzyos for a specific heart condition. All three medications exceeded analysts' sales expectations, as estimated by FactSet.

Despite analysts expecting $95.8 million in revenue, Abecma, a cell therapy for multiple myeloma, generated $95 million in sales for the quarter.