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Behind Bristol-Myers Squibb’s 1Q17 Performance

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Bristol-Myers Squibb’s 1Q17 performance

Bristol-Myers Squibb’s (BMY) top line rose 12% to ~$4.93 billion in 1Q17, driven by an operational growth of 13% in revenues, which was offset by the negative impact of -1% in foreign currency exchange.

The above graph shows the revenues of Bristol-Myers Squibb over the past few years. As the company has its operations worldwide, it’s widely exposed to currency risk.

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Segment-wise performance  

Bristol-Myers Squibb’s now operates in a single segment but has classified its drugs as prioritized brands and established brands. Prioritized brands include the drugs Opdivo, Eliquis, Orencia, Yervoy, Sprycel, and Empliciti. All these drugs reported growth in 1Q17 as compared to 1Q16. The performance of these drugs is discussed in subsequent parts of this series.

Established brands include the Hepatitis C franchise, Baraclude (a Hepatitis B drug), Reyataz and Sustiva (HIV drugs), and other drugs. All these drugs reported declines in revenues in 1Q17, as compared to 1Q16.

Apart from prioritized brands and established brands, BMY’s revenues also consist of alliance revenues from collaborations with other companies.

To divest risk, investors can consider the VanEck Vectors Pharmaceutical ETF (PPH), which has 4.3% of its total assets in Bristol-Myers Squibb. PPH also has 10.3% of its total assets in Johnson & Johnson (JNJ), 7.9% of its total assets in Novartis AG (NVS), 5.2% of its total assets in Merck (MRK), and 6.8% of its total assets in Pfizer (PFE).

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