Bristol-Myers Squibb’s (BMY) Neuroscience segment’s sales fell more than 83% in 2016, while its Immunoscience segment’s sales rose ~20% in the year compared to 2015.
BMY’s Neuroscience segment is represented by its drug Abilify, while its Immunoscience segment is represented by its drug Orencia.
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Abilify is an antipsychotic agent used in the treatment of schizophrenia and major depressive disorders. It’s part of BMY’s alliance with Otsuka Pharmaceutical Co.
Following the loss of its exclusivity in US markets, Abilify’s revenue fell more than 83% in 2016. Abilify reported sales of $128 million in 2016. The company lost exclusivity for Abilify in European markets in 2014, affecting its sales slightly. Abilify is a product with a high profit margin, so lower Abilify sales had a negative impact on BMY’s gross margin in 2016.
Other drugs for the treatment of schizophrenia include AstraZeneca’s (AZN) Seroquel XR, Johnson & Johnson’s (JNJ) Invega Sustenna, and Sunovion Pharmaceuticals’ (SEPR) Latuda.
Orencia is a fusion protein used in the treatment of rheumatoid arthritis and related indications. Orencia’s revenue rose ~20% to $2.3 billion in 2016, compared to $1.9 billion in 2015, following higher demand and a higher net average selling price.
Other drugs for the treatment of rheumatoid arthritis include AbbVie’s (ABBV) Humira, Amgen’s (AMGN) Enbrel, and Pfizer’s (PFE) Celebrex. To divest risk, investors can consider ETFs such as the iShares US Healthcare ETF (IYH), which holds 3.0% of its total assets in Bristol-Myers Squibb.