Core Viewpoint - Bristol-Myers Squibb is preparing to announce its Q2 2025 earnings, with expectations of adjusted earnings of $1.585 per share and sales of $11.31 billion, despite slight downward revisions in revenue and earnings estimates for 2025 [1][2]. Financial Performance - The company anticipates a low-single-digit percentage increase in total revenue for the later 2020s, primarily due to updated assumptions for its cancer drug Yervoy [2][4]. - Bank of America Securities has revised the company's earnings model, showing a decline of more than 1% in total revenue and EPS for Q2, with similar trends for 2025 [3][4]. Product Performance and Market Dynamics - Key products such as Pomalyst, Revlimid, Camzyos, and Orencia are expected to face significant headwinds due to U.S. drug pricing reforms [5]. - The earnings call will focus on the commercial performance of products like Cobenfy, Camzyos, Reblozyl, and Breyanzi, which are crucial for immediate revenue streams [7][8]. Industry Challenges - The evolving landscape of U.S. drug pricing policies, including the 'most favored nation' rule and potential pharma-specific tariffs, poses systemic pressures on the pharmaceutical industry, affecting Bristol-Myers Squibb [6]. - The company is expected to face several challenging years ahead, with anticipated earnings declines driven by generic competition [10]. Valuation Insights - Bristol-Myers Squibb is considered one of the cheaper companies in large-cap biopharma, with a price-to-earnings ratio of 7 to 8 times expected 2025 earnings, comparable to peers like Pfizer, GSK, Biogen, and Merck [9].

Core Insights - AbbVie, Inc. (ABBV) and Bristol Myers Squibb (BMY) are prominent players in the biopharmaceutical industry, each with diverse portfolios and global reach [1][2] - Both companies have established strong positions in their respective therapeutic areas, making it challenging to choose between them based on fundamentals, growth prospects, and valuations [3] AbbVie Overview - AbbVie's flagship drug, Humira, has lost patent protection, leading to significant sales erosion due to biosimilar competition, particularly in 2024 and expected to worsen in 2025 [4] - The acquisition of Allergan for $63 billion has diversified AbbVie's product offerings and reduced reliance on Humira [4] - AbbVie's immunology drugs, Skyrizi and Rinvoq, are performing well, particularly in treating inflammatory bowel diseases, helping to offset Humira's declining sales [5] - AbbVie has a robust oncology portfolio with drugs like Imbruvica and Venclexta, with recent label expansions increasing the patient population for Venclexta [6] - The approval of Vyalev for advanced Parkinson's disease in October 2024 further enhances AbbVie's portfolio [6] - AbbVie is pursuing promising R&D initiatives, including next-generation immunology approaches and innovative therapies for neuropsychiatric disorders, alongside active M&A strategies [7] - As of March 31, 2025, AbbVie reported $64.5 billion in long-term debt and $5.4 billion in short-term obligations, with cash and equivalents around $5.2 billion [8] Bristol Myers Squibb Overview - BMY's Growth Portfolio, including drugs like Reblozyl and Opdualag, has stabilized revenue amid generic competition for legacy drugs [9][10] - Reblozyl has shown strong performance since its approval, contributing significantly to revenue growth [10] - Opdivo continues to gain momentum with consistent label expansions, and recent FDA approvals for new drugs like Cobenfy broaden BMY's portfolio [11][12] - Despite new drug launches, BMY faces revenue pressure from legacy drugs, which saw a 20% decline in the first quarter due to generic competition [13] - BMY's long-term debt stood at $46.1 billion as of March 31, 2025, with cash and equivalents of $12.1 billion [14] Financial Estimates and Performance - The Zacks Consensus Estimate for AbbVie's 2025 sales indicates a 6.6% year-over-year increase, with EPS expected to improve by 20.65, although recent estimates have declined [15] - For BMY, the 2025 sales estimate suggests a 4.13% decrease, while EPS is projected to increase by 487.83%, influenced by low EPS figures in 2024 [17] - Year-to-date, ABBV shares have gained 11.8%, while BMY shares have decreased by 11.2%, compared to a 1.6% gain in the large-cap pharma industry [18] - In terms of valuation, ABBV trades at 14.76X forward earnings, slightly higher than BMY's 7.60X, while the industry average is 15.16X [19] - BMY offers a higher dividend yield of 5.20% compared to ABBV's 3.4%, which is attractive for investors [22] Investment Outlook - Both companies are considered safe investments in the biopharma sector, but selecting one over the other is complex due to their current Zacks Rank of 3 (Hold) [23] - AbbVie's diverse portfolio and strong performance from its immunology drugs position it favorably despite challenges from declining Humira sales [24] - BMY's efforts to counteract revenue declines from legacy drugs through new approvals and acquisitions are commendable, but challenges remain for 2025 [25]

Core Viewpoint - The article highlights the potential investment opportunities in healthcare companies Merck and Bristol Myers Squibb, which are currently undervalued due to company-specific challenges but have strong long-term prospects. Group 1: Merck - Merck is nearing the loss of patent exclusivity for its key drug Keytruda, which is expected to face biosimilars by the end of the decade [4] - Despite the challenges, Merck's subcutaneous version of Keytruda has shown positive phase 3 results, potentially extending its patent exclusivity into the next decade [5] - The subcutaneous formulation is easier and faster to administer, reducing patient and physician time in the administration process by 49.7% and 45.7% respectively [6] - Merck has a strong pipeline with new approvals, including Winrevair and Enflonsia, and offers a reliable dividend program [7][8] - The stock's forward price-to-earnings ratio is 9.1, significantly lower than the healthcare industry average of 16.3, indicating potential upside for long-term investors [8] Group 2: Bristol Myers Squibb - Bristol Myers Squibb is facing patent expiration for its cancer drug Opdivo and has already lost exclusivity for Revlimid and Sprycel [9] - The company reported a 6% year-over-year revenue decline to $11.2 billion in the first quarter, but its growth portfolio saw a 16% increase in sales to $5.6 billion [11] - BMS has received recent approvals, including a subcutaneous version of Opdivo, which will help mitigate losses from biosimilar competition [10] - The company has a robust pipeline and is expected to secure additional approvals, positioning it to navigate current challenges [12] - Bristol Myers Squibb's stock is undervalued with a forward P/E ratio of 7, suggesting strong long-term return potential despite a 17% decline this year [13]

Group 1 - The focus is on growth and dividend income as a strategy for retirement planning [1] - The portfolio is structured to generate monthly dividend income that grows through reinvestment and annual increases [1] Group 2 - The article expresses personal opinions and is not intended as investment advice [2][3] - It emphasizes the importance of conducting individual research before making investment decisions [2]

Group 1 - The article introduces Endurance Investing as a new contributing analyst for Seeking Alpha, encouraging others to share investment ideas [1] - The focus of the new analyst is on long-term dividend growth investing, with over 15 years of investment experience [2] - The analyst emphasizes thorough analysis of companies before making investment decisions and aims to inform other investors about lesser-known details [2] Group 2 - The analyst has a beneficial long position in BMY shares, indicating a personal investment interest [3] - The article expresses the analyst's own opinions and does not involve compensation from any company mentioned [3] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [4]

Core Insights - Bristol Myers' growth portfolio includes key drugs such as Opdivo, Orencia, Yervoy, and others, with Opdivo being the top revenue generator [1][2] Drug Performance - Opdivo generated $2.26 billion in sales in Q1 2025, representing 20% of total revenues, driven by demand in various cancer indications [2][10] - The European Commission approved the subcutaneous formulation of Opdivo for multiple solid tumor indications, expanding its label [3] - The FDA approved the combination of Opdivo and Yervoy as a first-line treatment for unresectable or metastatic hepatocellular carcinoma (HCC) [4] - The FDA also approved the Opdivo combination for microsatellite instability-high or mismatch repair deficient colorectal cancer in adult and pediatric patients [5] Competitive Landscape - Bristol Myers faces significant competition in the oncology space from major pharmaceutical companies like Merck and Roche [6] - Merck's Keytruda accounts for approximately 50% of its pharmaceutical sales and is a leading drug in the immuno-oncology market [7] - Roche's Tecentriq is also a key player, with ongoing and planned studies across various cancer types [8] Financial Performance - Bristol Myers' shares have declined by 13.9% year to date, compared to a 2.1% decline in the industry [9][10] - The company trades at a forward price/earnings ratio of 7.37x, lower than its historical mean of 8.53x and the large-cap pharma industry's average of 14.93x [11] - The bottom-line estimate for 2025 has decreased to $6.76 from $6.89 over the past 60 days [13]

Group 1 - The "One Big Beautiful Bill Act" includes over $1 trillion cuts to Medicaid, impacting millions of vulnerable Americans and threatening healthcare providers [2] - Medicaid represents a smaller portion of drugmakers' revenue in the U.S. and globally, with lower reimbursement rates compared to Medicare and commercial insurance [3][4] - Future revenue loss from Medicaid is considered a marginal negative for drugmakers, although some companies are more exposed to the Medicaid market than others [4] Group 2 - Vertex Pharmaceuticals and Gilead are more reliant on Medicaid, with Medicaid accounting for 25% of Vertex's U.S. revenue and 22% of Gilead's domestic sales [5] - Medicaid constitutes 23% of Vertex's sales from cystic fibrosis medicines, which are critical revenue drivers for the company [6]

Summary of US Large Cap Pharmaceuticals: Mid-Year State Of Play Industry Overview - The report focuses on the US Large Cap Pharmaceuticals sector, analyzing key companies such as ABBV, LLY, JNJ, MRK, BMY, and PFE [6][5][32]. Core Insights and Arguments 1. **Revenue Growth and Stability**: Projected revenues from growth/stable products for 2025-2030 are as follows: ABBV at $10.39 billion, LLY at $3.06 billion, JNJ at $1.68 billion, MRK at $1.37 billion, BMY at $0.60 billion, and PFE at $0.54 billion [5]. 2. **Patent Cliff Exposure**: The number of years to the next major patent cliff varies, with ABBV and MRK at 3.5 years, while LLY and JNJ face longer timelines [5]. 3. **Market Sentiment**: The report indicates a "Launch Trade" momentum, with high investor psychology impacting stock performance, particularly for ABBV and GILD as popular longs, while MRK is viewed as a funding underweight [6]. 4. **Macro Environment**: A friendlier US macro backdrop with diminished recession risks and benign inflation data is noted, which could complicate the case for large-cap biopharma relative to other sectors [6]. 5. **Drug Pricing Uncertainty**: Ongoing debates regarding drug pricing and potential implementation of Most Favored Nation (MFN) pricing are highlighted as significant uncertainties affecting investor sentiment [6]. 6. **Key Catalysts for 2H25**: Important upcoming catalysts include LLY's ATTAIN-1 data for an oral obesity pill, BMY's ADEPT-2 Phase 3 data for Alzheimer's treatment, and MRK's CADENCE trial outcomes [6]. Additional Important Considerations 1. **Tariff Implications**: The report discusses potential tariffs on pharmaceuticals, with an expected starting rate of 25% on transfer pricing, potentially dropping to around 10% based on negotiations [6]. 2. **Investor Positioning**: The healthcare sector is experiencing a positioning cleanse, with Medtech favored over large-cap biopharma [6]. 3. **Earnings Setup**: Investor sentiment is more comfortable with ABBV, PFE, and LLY, while concerns are raised regarding BMY's performance [6]. 4. **Government Exposure**: The report notes that government end-market exposure varies significantly among companies, with LLY and MRK having over 35% exposure to Medicare/Medicaid revenues [5]. Conclusion The US Large Cap Pharmaceuticals sector is navigating a complex landscape characterized by macroeconomic factors, regulatory uncertainties, and evolving investor sentiment. Key companies are positioned differently based on their revenue growth potential, patent cliff exposure, and government market dependencies. The upcoming catalysts and tariff implications will be critical in shaping the sector's performance in the second half of 2025.

Core Insights - Bristol Myers' legacy portfolio, which includes Eliquis, Revlimid, Pomalyst, Sprycel, and Abraxane, experienced a significant revenue decline of 20% in Q1, totaling $5.64 billion, primarily due to generic competition and the redesign of U.S. Medicare Part D [1][8]. Revenue Performance - Eliquis generated sales of $3.56 billion, down 4% year-over-year, impacted by the Medicare Part D redesign, with expectations for sales recovery in H2 2025 as the coverage gap is eliminated [2][8]. - Revlimid's revenues plummeted 44% to $936 million due to lower demand from generic erosion [2]. - Pomalyst sales decreased by 24% to $658 million, while Sprycel saw a 53% decline to $175 million, and Abraxane revenues fell 52% to $105 million, all attributed to generic competition [3][8]. Competitive Landscape - Bristol Myers' growth portfolio includes key drugs such as Opdivo, Orencia, Yervoy, Reblozyl, and others, with a strong focus on oncology [4]. - The company faces significant competition from major pharmaceutical firms like Merck and Pfizer, particularly in the immuno-oncology space, where Merck's Keytruda dominates [4][5][6]. Stock Performance and Valuation - Bristol Myers' shares have declined by 14% year-to-date, contrasting with a slight industry decline of 0.6% [7]. - The company is currently trading at a price/earnings ratio of 7.45x forward earnings, which is below its historical mean of 8.86x and the large-cap pharma industry's average of 15.09x [10]. Earnings Estimates - The Zacks Consensus Estimate for 2025 earnings per share has decreased to $6.76 from $6.89 over the past 60 days, with a similar downward trend for 2026 estimates [12].

Core Insights - Moretus Research provides high-quality equity research focused on U.S. public markets, aiming to deliver clarity, conviction, and alpha for serious investors [1] - The research methodology emphasizes a structured, repeatable framework to identify companies with durable business models and mispriced cash flow potential [1] - Valuation practices are based on sector-relevant multiples tailored to each company's business model, emphasizing comparability and relevance [1] Research Focus - Moretus Research targets underappreciated companies that are undergoing structural changes or temporary dislocations, where disciplined analysis can yield asymmetric returns [1] - The research combines rigorous fundamental analysis with a judgment-driven process, avoiding noise and overly complex forecasting [1] - The firm aims to elevate the standard for independent investment research by providing actionable insights and a strong filter for essential information in equity analysis [1]