Bristol Myers Squibb Delivers Strong Q1 on Oncology Growth, but Challenges Loom

Bristol Myers Squibb (BMY) reported a robust first-quarter 2025, with revenue of $11.2 billion exceeding expectations as newer cancer therapies drove growth, offsetting declines in legacy drugs. The biopharmaceutical giant raised its full-year revenue guidance to $45.8–$46.8 billion, fueled by strategic cost-cutting and strong performance in its oncology portfolio. Yet, investors must weigh this optimism against looming risks, including generic competition, regulatory headwinds, and pipeline setbacks.

Cancer Drugs Lead the Charge

The company’s Growth Portfolio, comprising newer therapies, surged 16% year-over-year to $5.56 billion, driven by standout performances:
- Opdivo (nivolumab): Sales rose 9% to $2.27 billion, benefiting from expanded approvals in hepatocellular carcinoma and colorectal cancer, as well as a recommended European nod for adjuvant non-small cell lung cancer.
- Reblozyl (luspatercept): Sales jumped 35% to $478 million, used to treat anemia in blood cancers and thalassemia.
- Breyanzi (lisocabtagene maraleucel): A CAR-T therapy for lymphoma, its sales soared 146% to $263 million, aided by European approvals and strong U.S. adoption.

Legacy Declines, but Cost Cuts Cushion the Blow

Legacy drugs, including Revlimid (down 44% to $936 million) and Pomalyst (down 24% to $658 million), continue to erode due to generic competition. However, BMS’s cost-reduction efforts—targeting $2 billion in savings by 2027, with $1.5 billion expected in 2025—have bolstered margins. Operating expenses fell 33% year-over-year, and the company now projects a $500 million forex boost for 2025.

Pipeline Stumbles and Regulatory Risks

Not all news is positive. The schizophrenia drug Cobenfy underperformed in a Phase 3 trial, limiting its commercial potential. Meanwhile, Eliquis, a blockbuster blood thinner co-marketed with Pfizer, faces Medicare price negotiations starting in 2026 and generic competition by 2028. These factors could strain future revenue, especially as BMS’s “China 2030 Strategy”—aiming to expand oncology access—remains vulnerable to existing tariffs on U.S. exports to China.

Key Financial Revisions and Outlook

The company’s revised guidance reflects:
- Strong sales momentum in growth drugs, including Camzyos (+89% sales to $159 million) for heart conditions and Sotyktu for psoriasis.
- Foreign exchange tailwinds, which added ~$500 million to revenue.
- Exclusion of potential U.S. pharmaceutical tariffs, a risk if Trump-era proposals gain traction.

Analysts highlight that while BMS’s oncology dominance is clear, its ability to navigate generic erosion and pricing pressures will define long-term success. The stock’s performance hinges on whether the Growth Portfolio can sustain its 16% annual growth rate and offset the 20% decline in legacy sales.

Conclusion: A Mixed Bag for Investors

Bristol Myers Squibb’s Q1 results underscore the strength of its oncology pipeline, with Opdivo, Breyanzi, and Reblozyl leading the way. The raised guidance reflects operational discipline and forex benefits. However, investors should remain cautious:
- Eliquis’s 2028 exclusivity loss could reduce revenue by $2–3 billion annually.
- Cobenfy’s underwhelming trial results highlight pipeline risks.
- Medicare price negotiations (starting in 2026) may further pressure legacy drugs.

With a market cap of ~$120 billion, BMS trades at a P/E ratio of 13x (vs. 15x for peers), suggesting investors already discount these risks. The stock’s 52-week range of $50–$65 reflects this uncertainty.

In the short term, the Q1 beat and revised guidance could boost BMY’s stock, but sustained outperformance will require new oncology approvals and cost discipline. For now, BMS remains a hold—an essential player in oncology but not without speedbumps.