Bristol Myers Is Taking Full Advantage of its Celgene Acquisition

Bristol Myers Squibb (NYSE:BMY) got quite a boost in fourth-quarter revenue from the drugs it received through its acquisition of Celgene. Even looking at an apples-to-apples comparison — as if Bristol owned the assets in the year-ago quarter — Celgene’s drugs are the ones contributing much of the growth.

In this video from Motley Fool Live recorded on Feb. 8, contributors Brian Orelli and Keith Speights discuss how the addition of Celgene has helped Bristol Myers Squibb’s top and bottom lines.

Brian Orelli: Moving on to our second story, Bristol Myers Squibb’s earnings. Revenue was up 39%, but that includes the addition of Celgene, which they purchased last year. On a pro forma basis so pretends like it held Celgene for 2019, but then backs out at Otezla because Celgene had to sell Otezla to complete the deal. Looking on that pro forma basis, revenue was up 10%. Definitely kudos to the company for making that calculation, as it’s quite difficult to do [laughs] on your own. It seems like a lot of this was obviously driven by, even with that 10%, a lot of it was still driven by the growth of drugs that came from Celgene, so Revlimid was up 18%. That’s Bristol’s new top selling drug and that came from Celgene and now tops Eliquis, which was the top selling drug. Then another blood cancer drug, Pomalyst was at 21% and is now doing 835 million in sales per quarter, that’s just Bristol Myers fifth-best revenue. Any thoughts on the revenue line?

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Keith Speights: You, know, I think you hit it, Brian. Bristol Myers Squibb is continuing to really benefit from that Celgene acquisition. If you look at the top products that they provide details on, obviously, they have a lot of products that are on the market. But the ones that they really focus on in their earnings release, the big winners are by and large, the Celgene products. Now, they do have a couple of their own drugs that are doing well aside their own drugs, drugs that they had prior to the Celgene acquisition. The blood thinner Eliquis is continuing to do well. Yervoy cancer immunotherapy is continuing to do well. Opdivo is their top cancer immunotherapy. Sales have declined a little bit for Opdivo, I think that could change as they pick up some additional approvals for other indications.

But the big story is, like you said, Revlimid is now their number one drug. In 2020, pulled in $12.1 billion. That’s higher than any other drug that Bristol Myers Squibb has, and then Pomalyst is another big winner. Then even if you go on down the list, Brian, some of the newer drugs all come from the Celgene deal. You’ve got four or five newer drugs that aren’t generating a lot of substantial revenue just yet, but they will probably pick up steam over the next few years.

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Orelli: Just last week, they got the CAR-T from Celgene.

Speights: At long last.

Orelli: At long last. Just late enough of the CVR people — the contingent value rights that Celgene shareholders got in part of the deal. I had it improved by the end of the year.

Speights: Yeah. I lost out on that CVR deal. [laughs]

Orelli: I’m sure, I imagine there’s going to be lawsuits and you might have something from it at some point. Then on the bottom line, there were losses in the fourth quarter as well as the fourth quarter of 2019, but that was due to acquisitions. Adjusted earnings was $1.46 per share compared to $1.22 a year ago, so that’s 19.7% growth. It certainly seems like they’re maximizing benefits from Celgene acquisition on the bottom line.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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