Bristol Myers Squibb Stock Rises, Merck Moves Lower: A Tale of Two Pharma Giants

In the dynamic world of pharmaceuticals, two industry giants, Bristol Myers Squibb (BMY) and Merck (MRK), have recently reported contrasting performances, leading to divergent stock movements. While Bristol Myers Squibb's shares rose following strong quarterly results, Merck's stock moved lower due to a combination of factors. Let's delve into the reasons behind these contrasting performances and their implications for investors.


Bristol Myers Squibb's stock rose after the company reported adjusted earnings of $1.80 per share on $11.89 billion in third-quarter sales, surpassing analysts' expectations. The drugmaker's growth portfolio, particularly Eliquis and Opdivo, contributed significantly to the overall revenue growth. Eliquis, a blood thinner, saw sales climb 14% to $2.2 billion, while Opdivo, a cancer drug, reported a 12% increase to $2.1 billion. These drugs accounted for 36% of total revenue, demonstrating their significance in BMY's growth strategy. Additionally, the company raised its full-year revenue guidance to 5% growth, reflecting the strength of its growth portfolio.


In contrast, Merck's earnings and revenue growth fell short of analysts' expectations in Q3 2024. While adjusted EPS of $1.57 beat estimates by $0.09, it was a 26% decline from the previous year. Revenue grew 4% to $16.66 billion, missing projections by $180 million. Keytruda sales surged 17%, but diabetes drug Januvia/Janumet and HPV vaccine Gardasil sales dropped 11% and 42% respectively, due to competition and lower demand in China. Merck cut its sales and earnings outlook, reflecting a $5 million midpoint reduction and a 24-cent negative hit due to business development transactions.


The contrasting performances of these two pharmaceutical giants can be attributed to their strategic positioning and management decisions. Bristol Myers Squibb's focus on high-growth drugs like Eliquis and Opdivo drove revenue, while Merck's reliance on Keytruda and the underwhelming performance of its other drugs led to a mixed quarter. Merck's guidance cut for diabetes drugs and HPV vaccine also impacted its future earnings and stock performance.

Investors should monitor the progress of these companies as they navigate the competitive pharmaceutical landscape. Bristol Myers Squibb's strong performance in its growth portfolio and Merck's ability to innovate and adapt to market challenges will be crucial factors in their long-term success. As always, thorough research and careful consideration of risk factors are essential when making investment decisions.