Will the Recent Pricing Deal With the Government Impact BMY's Sales?

Core Insights - Bristol Myers Squibb (BMY) has reached a pricing agreement with the U.S. government to provide Eliquis at no cost to Medicaid starting January 1, 2026, and will donate over 7 tons of the active pharmaceutical ingredient to ensure supply-chain resilience [1][8]. Group 1: Eliquis Overview - Eliquis is a prescription medication used to reduce the risk of stroke and blood clots in adults with atrial fibrillation, and it is co-developed and co-commercialized with Pfizer [2]. - Eliquis is one of the most widely prescribed oral blood thinners, generating $11 billion in sales in the first nine months of 2025, reflecting an 8% year-over-year increase [2][3]. Group 2: Financial Implications - The financial impact of the pricing deal on Eliquis sales remains uncertain, as it is the top revenue generator for BMY [3]. - The agreement also includes offering other drugs at an 80% discount to cash-paying patients, which may affect overall revenue [3]. Group 3: Competitive Landscape - BMY faces competition from Johnson & Johnson's Xarelto, which is also a Factor Xa inhibitor, but JNJ is currently dealing with patent challenges in the U.S. [5]. - Opdivo, another significant revenue generator for BMY, competes in the immuno-oncology space, which is dominated by Merck's Keytruda [5][6]. Group 4: Company Performance and Valuation - BMY's shares have decreased by 5.3% over the past year, contrasting with the industry's growth of 15.5% [7]. - BMY is trading at a price/earnings ratio of 9.07x forward earnings, which is higher than its historical mean of 8.40x but lower than the large-cap pharma industry's average of 17.27x [10]. Group 5: Earnings Estimates - The Zacks Consensus Estimate for 2025 earnings per share has increased, while the estimate for 2026 has decreased [12].