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Bristol-Myers Squibb Co.
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JPM - 2023 Preview: Modest EPS Growth with Focus Remaining on New Product TractionAhead of BMY’s 2023 guidance this week (Feb 2), we are updating our estimates and want to provide our latest thoughts on the story. We expect BMY’s guide for the year to reflect modest topline growth (+3%, +$70mm vs cons, primarily due to FX) with Eliquis and new products offsetting Revlimid generic erosion. And as we think about the BMY story in 2023, this is largely an execution year and we anticipate improving trends for the company’s key new product launches as we move through the year as BMY builds commercial access for Sotyktu, works through physician training on Camzyos, and benefits from capacity expansion for its CAR-T’s. On this front, we think shares trading at ~9x FY23 EPS more than adequately reflect LOE risk and we remain OW. • For 2023, we expect sales of $47.1bn (3% growth; +$70mm vs cons) and EPS of $8.06 (+$0.07 vs cons). We see BMY returning to modest growth in 2023 (+3% y/y) led by continued growth in its core franchises and a gradual ramping of new products partially offset by further erosion of the Revlimid franchise. We forecast Eliquis sales growing to $12.7bn (+6.6% y/y, -$54mn vs cons) despite emerging generic competition internationally. We also estimate Opdivo sales growing 12.5% y/y to $9.25bn (-$289mm below cons) as the drug benefits from newer indications. And on Revlimid, we continue to model another $2.4bn of erosion in 2023 with sales of $7.1bn (+$59mm vs cons). Of note, we now model a ~30bps FX tailwind to WW sales vs our previous assumption of a 125 bps headwind, which provides a ~$400mm boost to reported sales relative to our prior estimates. On the bottomline, we forecast roughly flat margins with growth in other income and a lower share count driving EPS to $8.06 (+6% y/y). • We expect improving trends for BMY’s new product portfolio as we move through 2023. Bristol’s new launch portfolio has ramped more slowly than anticipated over the past year and we expect this gradual ramp to continue in 1H23 followed by improving trends in 2H23. On this front, we will be watching 1) Sotyktu coverage and continued initial launch traction (which is thus far running ahead of our expectations), 2) uptake for Camzyos, 3) expanded Breyanzi manufacturing capacity, 4) Reblozyl approval in earlier lines of therapy and 5) ongoing Opdualag shares gains in melanoma. On Sotyktu, we are encouraged by early data (capturing ~25% of new oral PsO TRx) and while we expect fairly modest 2023 sales ($170mm), we are raising our peak sales estimates to $5bn+. We also forecast a step up in sales for Camzyos to $450mm as BMY shifts from training/REMS certification to broader commercial uptake. Finally, on BMY’s CARTs, we expect BMY to resolve capacity issues by mid-2023, which should support strong Breyanzi growth by 2H23. Bristol-Myers Squibb Company (Overweight; Price Target: $85.00) Investment Thesis We are Overweight on BMY shares as we see the company’s new product portfolio positioned to offset a substantial portion of BMY’s 2026-2028 LOE cycle, which is not well reflected in current valuation. We estimate BMY’s topline and EPS growing annually n the low-single digits and mid-single digits, respectively, from 2021 through 2026. Over this time frame, we see Eliquis remaining a key growth driver with new products such as Opdualag, Camzyos and Sotyktu becoming more meaningful contributors over time. At current valuation we believe BMY shares have an attractive risk/reward profile, and overall we see far more paths to upside (improvement on recent launches performance and further pipeline progression) than downside. Valuation Our Dec 2023 price target of $85/share is based on a DCF methodology with a 0% sector terminal growth rate and a WACC of 8.5%, on par with our assumptions in the overall pharma sector |
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| Msg # | Subject | Author | Recs | Date Posted |
| 10764 | Re: JPM - 2023 Preview in Eliquis | Biotech2050 | 6 | 1/31/2023 10:49:11 AM |
