Behind Bristol-Myers Squibb’s Continued Growth in 1Q16

Mike Benson - Author

Aug. 18 2020, Updated 5:17 a.m. ET

Bristol-Myers Squibb’s 1Q16 performance

Bristol-Myers Squibb (BMY) reported a growth of 9% at ~$4.4 billion in its 1Q16 results, and now analysts estimate that we can expect a high-single-digit to low-double-digit growth in revenues for each quarter in 2016.

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Segment-wise performance  

Bristol-Myers Squibb’s business is divided into the following segments:

  • Onology
  • Virology
  • Immunoscience
  • Cardiovascular
  • Neuroscience
  • Matured Products and Other Products

The Oncology segment has emerged as the largest revenue contributor in 1Q16 by contributing nearly 31.9% of total revenues. This segment reported ~54.9% increase in 1Q16 as compared to 1Q15, mainly driven by increased sales of Opdivo and Sprycel, partially offset by Yervoy and Erbitux.

The Virology segment contributed nearly 28% of total revenues for Bristol-Myers Squibb during 1Q16. Overall, the segment revenues increased by 2% at $1.21 billion during 1Q16 as compared to $1.19 billion during 1Q15. The Hepatitis C franchise is the growth contributor for this segment, while the drugs Baraclude, a Hepatitis B drug, and Reyataz and Sustiva, the HIV drugs, set off the growth of this segment.

Immunoscience and Cardiovascular segments

The Immunoscience segment, which includes Orencia, contributed nearly 10.8% of total revenues during 1Q15. Orencia sales improved by nearly 18.7% in 1Q16 due to higher demand as compared to 1Q15.

The Cardiovascular segment, represented by drug Eliquis, contributed ~16.7% of total revenues during 1Q16. Eliquis sales increased by over 200% to $734 million in 1Q16, as compared to $355 million in 1Q15, due to wide use and strength of its prescription trends.

Neuroscience and Matured Products

The Neuroscience segment, represented by drug Abilify, reported a drop of over 94% sales for Abilify following the competition in 1Q16 as compared to 1Q15. Abilify is a trademark of Otsuka Pharmaceuticals.

The Matured Products and Other Products segment showed a 16% decline in revenues at ~$535 million in 1Q16, as compared to $639 million in 1Q15, due to lower sales and increased competition.

To get exposure to BMY while divesting risk, investors might consider the VanEck Vectors Pharmaceutical ETF (PPH), which holds 5.5% of its total assets in Bristol-Myers Squibb. PPH holds 5.3% in Johnson & Johnson (JNJ), 5.3% in Novartis AG (NVS), 5.4% in Merck and Company (MRK), and 5.6% in Pfizer (PFE). Investors might also consider the PowerShares Dynamic Pharmaceuticals ETF (PJP), which holds 5.7% of its total assets in Bristol-Myers Squibb.


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