Bristol Myers Squibb, a prominent pharmaceutical company, unveiled its first-quarter financial results on Thursday, revealing revenue that surpassed expectations driven by strong sales of its blood cancer treatment Revlimid and the blockbuster blood thinner Eliquis. However, despite the revenue success, the company reported a quarterly loss due to one-time charges related to recent acquisitions. Additionally, Bristol Myers Squibb announced plans to implement significant cost-cutting measures, including layoffs and discontinuation of certain drug programs, aiming to reinvest the savings into drug development initiatives.
The pharmaceutical giant disclosed that it will cut $1.5 billion in costs by 2025, with a focus on streamlining operations and reallocating resources to research and development. This restructuring effort will involve laying off 2,200 employees, discontinuing some drug programs, eliminating open roles, consolidating sites, and reducing management layers. Emphasizing a strategic shift towards prioritizing investment in key drug brands and optimizing operations, Bristol Myers aims to enhance returns for shareholders and deliver greater health benefits for patients.
Bristol Myers Squibb Revenue Exceeds Expectations Despite Quarterly Loss and Layoff Announcement
During an earnings call, Bristol Myers executives revealed that two-thirds of the cost savings are associated with drug research and development. Chief Medical Officer Dr. Samit Hirawat noted that the company has already discontinued approximately 12 drug programs and will continue evaluating others throughout the year. CEO Chris Boerner emphasized that the majority of savings will come from existing in-house operations rather than newly acquired companies, underscoring Bristol Myers’ commitment to disciplined execution and long-term success.
The company’s first-quarter loss primarily stems from charges related to its recent acquisition of neuroscience drugmaker Karuna Therapeutics and a collaboration agreement with SystImmune, a subsidiary of a Chinese biotech startup, to co-develop an experimental cancer treatment. Facing pressure to launch new drugs and counteract potential revenue loss from top-selling treatments like Revlimid and Eliquis, Bristol Myers strategically pursued these acquisitions amidst increasing competition from generic alternatives.
Company Plans to Prioritize Drug Development Amid Competitive Pressures and Acquisition Charges
Despite the revenue success driven by Eliquis and newer drugs, Bristol Myers experienced a net loss of $11.9 billion, or $5.89 per share, during the first quarter, compared to net income of $2.3 billion, or $1.07 per share, in the same period last year. Adjusted for certain items, the company reported an adjusted loss per share of $4.40 for the quarter, reflecting the impact of the one-time charges related to recent acquisitions.
While revenue for the first quarter reached $11.87 billion, up 5% from the previous year, Bristol Myers revised its adjusted earnings guidance for 2024 to reflect the effect of the recent deals. Despite the challenges posed by ongoing price negotiations and market exclusivity concerns for Eliquis, the company remains optimistic about its growth prospects, particularly driven by strong sales of Eliquis and some of its newer drugs.
