Will BMY's Legacy Portfolio Decline Weigh on Its 2026 Top Line?

Core Insights - Bristol Myers' legacy portfolio is experiencing significant revenue decline due to generic competition, with a 15% year-over-year drop in Q4 revenues to $5.1 billion [1][9] - For the full year 2025, legacy portfolio revenues fell 15% to $21.8 billion, accounting for 45% of total revenues of $48.2 billion, with further expected decline of 12-16% in 2026 [2][9] - Eliquis, a key product in the legacy portfolio, saw sales growth of 8% in 2025, totaling $14.4 billion, and is projected to grow 10-15% in 2026 despite pricing changes [3][4][9] Legacy Portfolio Performance - The legacy portfolio includes Eliquis, Revlimid, Pomalyst, Sprycel, and Abraxane, with significant erosion from generics impacting revenues [1] - Eliquis continues to benefit from strong global demand, but overall growth is hindered by generic pressures and increased government-channel rebates in the U.S. [3] - The company anticipates a decline in Eliquis sales in 2027, projecting a decrease of $1.5-$2 billion [4] Competitive Landscape - Bristol Myers faces increasing competition in oncology from major pharmaceutical companies like Merck and Pfizer, which are advancing their own therapies [5][9] - Merck's Keytruda dominates the immuno-oncology space, accounting for around 50% of its pharmaceutical sales, while the company is developing bispecific antibodies for long-term growth [6] - Pfizer has a diverse oncology portfolio, including antibody-drug conjugates and biosimilars, targeting various cancer types [8] Financial Performance and Valuation - Bristol Myers' shares have increased by 32.3% over the past six months, outperforming the industry growth of 26.7% [11] - The company is trading at a price/earnings ratio of 9.96x forward earnings, which is lower than the large-cap pharma industry's average of 18.76x [12] - The Zacks Consensus Estimate for 2026 EPS has risen to $6.13, while the estimate for 2027 has increased to $5.92 [13]