The biopharmaceutical company Bristol-Myers Squibb Co (NYSE: BMY) swung to a loss in the fiscal 2020 second-quarter, compared with a profit in the similar period last year. However, the Q2 non-GAAP earnings were higher than last year. Furthermore, the non-GAAP earnings and revenues also surpassed Wall Street estimates. The company also upwardly revised its FY 2020 outlook.
In a separate news release, Bristol-Myers and Pfizer stated that they have won an important patent case against pharmaceutical companies Sigmapharm, Sunshine Lake Pharma, and Unichem in relation to the blood thinner Eliquis. Following the earnings news and patent case victory, the stock of Bristol-Myers closed at $61.33, up $1.64 or 2.75% from the prior close.
The New York-based Bristol-Myers reported fiscal 2020 second-quarter revenues of $10.129 billion, an increase of 61% from $6.273 billion in the comparable quarter last year. Analysts anticipated revenues of $9.97 billion for the reported quarter.
For the quarter ended June 2020, the company posted a net loss of $85 million, or $0.04 per share, compared with a net profit of $1.432 billion, or $0.87 a share, in the quarter ended June 2019.
During the quarter, the company took a $2.389 billion charge related to the amortization of intangible assets (mainly due to the acquisition of Celgene). The company’s research and development expenses also nearly doubled to $2.522 billion, from $1.325 billion last year.
Excluding charges, net profit for Q2 2020 was $3.750 billion, or $1.63 per share, compared with $1.939 billion, or $1.18 a share, in Q2 2019. Analysts surveyed by Thomson Reuters anticipated earnings of $1.48 per share for the reported quarter.
Commenting on the results, CEO Giovanni Caforio said, “Our second-quarter results reflect the passion and focus of our employees, who continue to introduce new medicines, support patients with serious diseases and deliver strong results during the COVID-19 pandemic.”
Provision for income taxes rose to $1.707 billion in 2Q20, from $337 million in 2Q 2019.
Segment-wise,
- US revenues were $6.50 billion, an increase of 77% on a y-o-y basis.
- International revenues were $3.60 billion, up 40% in 2Q20.
Gross margin increased to 73.4%, from 68.6% in the year-ago period, mainly due to product mix.
Sales of Eliquis increased 6% to $2.16 billion, partially negating a drop in revenues generated by cancer drug Opdivo, which decreased 9% to $1.65 billion.
Moving forward, for FY 2020, Bristol-Myers now anticipates results between a loss of $0.06 per share and earnings of $0.09 per share and adjusted earnings in the range of $6.10-$6.25 per share. Revenues are expected in the range of $40.50 billion to $42.0 billion.
Earlier, the company had anticipated earnings of between $0.37 and $0.57 per share and adjusted earnings in the range of $6.00-$6.20 per share. Revenues were earlier expected to be between $40.0 billion and $42.0 billion.
The Street Consensus is currently expected to be earnings of $6.20 per share on revenues of $41.90 billion.
The FY 2020 outlook presumes the heightened effect of the COVID-19 pandemic on the business to take place in 2Q 2020, with a resumption of a well-balanced business climate in Q3 and negligible effect from 4Q 2020 onwards.
Separately, Bristol-Myers and Pfizer announced that they have won the patent case related to Eliquis. Leonard Stark, the US federal judge in Wilmington, Delaware, passed a decree saying that pharmaceutical companies Unichem, Sunshine Lake Pharma, and Sigmapharm had breached patents related to Eliquis. Bristol and Pfizer have a profit-sharing deal on the blood thinner, which is generally referred to as apixaban. Last year, Eliquis generated revenues of $2.03 billion.
Commenting on the impact of the judgment, Bristol-Myers Squibb spokeswoman said, “While subject to appeal, at present the generic manufacturers currently involved in the case cannot launch their apixaban products until 2031. Based on settlement agreements reached with other generic manufacturers, we currently expect generic entry could occur after 2026, but before 2031, subject to appeals and future challenges.”
The quarterly earnings beat, an upward revision of the FY 2020 outlook, and favorable judgment in the Eliquis patent case, are expected to keep the stock of Bristol-Myers bullish in the short-term.
The historical price chart indicates that the stock has solid support at 58 levels. The next minor resistance is anticipated only near 66. Furthermore, the Stochastic RSI indicator is rising. Therefore, we are anticipating the stock to remain in an uptrend in the near-term.
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