Cullen Capital Management, LLC, operating under the name Schafer Cullen Capital Management, Inc. (SCCM), has released its “SCCM Value Equity Strategy” third-quarter investor letter. A copy of the letter can be downloaded here. The US equity market continued the rally in the third quarter, with the S&P 500 returning 8.1% and the Russell 1000 Value surging 5.3%. The value equity strategy returned 6.9% (gross of fees) and 6.8% (net of fees) in the quarter, while the Russell 1000 Value and S&P 500 returned 5.3% ...

Core Insights - Bristol Myers Squibb's growth portfolio performed strongly in Q3 2025, offsetting declines in legacy drug sales [1][8] - The growth portfolio includes key drugs such as Opdivo, Reblozyl, and Breyanzi, contributing significantly to revenue [1][4] Growth Portfolio Performance - Opdivo remains the top revenue generator, with strong sales driven by its launch in MSI-high colorectal cancer and growth in first-line non-small cell lung cancer in the U.S. [2] - Opdivo Qvantig's approval for subcutaneous use has enhanced the immuno-oncology portfolio, with projected global sales growth in the high single-digit to low double-digit range [3] - Reblozyl is annualizing over $2 billion in sales, driven by demand in various treatment settings [4] - Breyanzi sales have surpassed $1 billion, reflecting strong growth in large B-cell lymphoma [4] - Camzyos sales are increasing due to robust demand, and Cobenfy has shown encouraging initial uptake with $105 million in sales year to date [5] Competitive Landscape - The immuno-oncology market is competitive, with Merck's Keytruda dominating and accounting for around 50% of Merck's pharmaceutical sales [6] - Pfizer is also a significant player in oncology, with a diverse product portfolio including antibody-drug conjugates and biosimilars [7] Financial Performance and Valuation - Bristol Myers' shares have declined by 13.2% year to date, contrasting with the industry's growth of 15.9% [10] - The company is trading at a price/earnings ratio of 8.07x forward earnings, lower than its historical mean and the large-cap pharma industry's average of 16.42x [12] - The Zacks Consensus Estimate for 2025 earnings per share has remained unchanged, while estimates for 2026 have decreased [13]

Core Viewpoint - The article discusses three high-yielding dividend stocks in the healthcare sector, emphasizing that high dividend yields should not be the sole focus for investors, as they may indicate value traps rather than genuine investment opportunities [1][2]. Bristol Myers Squibb (BMY) - Bristol Myers Squibb has a current price of $49.08 and a market cap of $99 billion, with a forward dividend yield of approximately 5.3% [3][4]. - The stock is trading at 7.5 times forward earnings estimates, which may suggest it is undervalued, but the company has faced challenges due to competition from generics for its blockbuster drugs [4][5]. - Despite these challenges, the company reported a 3% increase in sales last quarter and adjusted earnings of $1.63 per share, exceeding analysts' estimates [5][6]. - The company has consistently raised its dividend since 2010, providing steady returns to investors [6]. Pfizer (PFE) - Pfizer's current price is $25.87, with a market cap of $145 billion and a forward dividend yield of 7% [7][8]. - The stock is valued at around 9 times forward earnings, reflecting investor concerns over its growth prospects [8]. - Pfizer has a strong history of dividend growth, having increased its payouts for 16 consecutive years [8]. - The company recently acquired Metsera for $10 billion, which could address its patent cliff issue and enhance earnings growth if successful [9][10]. Dentsply Sirona (XRAY) - Dentsply Sirona trades at approximately $10.84, with a market cap of $2 billion and a forward dividend yield of around 5.7% [11][12]. - The stock is currently valued at about 6.5 times forward earnings, indicating a low valuation despite being a leading supplier of dental supplies and medical devices [11][12]. - The company is facing declining sales across all business segments and has experienced recent leadership changes, which may contribute to its low stock price [12][13]. - If the new CEO successfully implements a "return-to-growth action plan," the stock's valuation could improve while investors benefit from the high dividend in the interim [13].

Core Insights - Bristol Myers Squibb (BMY) has seen a 7.2% increase in stock price over the past month, outperforming the industry growth of 3.8% and the S&P 500 Index [1][2][8] - The company's strong performance is attributed to better-than-expected Q3 results driven by increased demand for key drugs such as Opdivo, Breyanzi, Reblozyl, and Camzyos, leading to an upward revision in revenue guidance [3][8] - Despite recent gains, BMY's year-to-date stock performance has been disappointing, with a decline from a 52-week high of $63.33 in March to a low of $42.52 in late October [4] Financial Performance - BMY's Growth Portfolio, which includes drugs like Opdivo and Reblozyl, reported an 18% year-over-year sales increase, totaling $6.9 billion [5] - Opdivo sales in the U.S. are driven by strong launches in specific cancer indications, while global sales are expected to grow in the high single-digit to low double-digit range [6][8] - The thalassemia drug Reblozyl has annualized sales exceeding $2 billion, and Breyanzi's sales are also strong, exceeding $1 billion annually [9][10] Drug Approvals and Pipeline - BMY's recent approval of Opdivo Qvantig for subcutaneous use has enhanced its immuno-oncology portfolio, with strong initial uptake [6] - The company has also launched Cobenfy, a new treatment for schizophrenia, which has generated $105 million in sales year-to-date and is expected to contribute significantly to revenue in the future [10][11] Legacy Portfolio and Challenges - The Legacy Portfolio continues to decline, with a 12% decrease in sales to $5.4 billion, primarily due to generic competition affecting drugs like Revlimid and Pomalyst [12] - BMY anticipates a further decline of approximately 15% to 17% in the Legacy Portfolio by 2025 [13] Strategic Collaborations and Acquisitions - BMY announced the acquisition of Orbital Therapeutics for $1.5 billion, which will add a promising RNA immunotherapy candidate to its pipeline [14][15] - The company has also partnered with BioNTech for the co-development of a bispecific antibody targeting cancer, indicating a focus on innovative treatment approaches [16][17] Valuation and Estimates - BMY's current price/earnings ratio stands at 7.67x, below its historical mean and the large-cap pharma industry's average of 15.57x, suggesting it may be undervalued [18] - The Zacks Consensus Estimate for 2025 EPS has slightly decreased to $6.48 from $6.51 over the past month [20] Investment Outlook - BMY's strong performance in the first nine months of 2025, driven by key drugs, positions it as a relatively safe investment in the biotech sector [22] - The company offers an attractive dividend yield of 5.31%, which may appeal to existing investors [22]

Core Insights - Bristol Myers Squibb Co. reported Q3 2025 revenues of $12.22 billion, exceeding consensus estimates of $11.81 billion, marking a 3% year-over-year increase [1] Revenue Breakdown - Growth Portfolio revenues reached $6.9 billion, an 18% increase, or 17% when excluding foreign exchange effects, driven by the immuno-oncology portfolio, Reblozyl, Camzyos, and Breyanzi [1] - Legacy Portfolio revenues declined to $5.4 billion, a 12% decrease, or 13% Ex-FX, with Eliquis sales increasing to $3.75 billion, up 25%, but this was offset by the impact of generics on the rest of the Legacy Portfolio [2] Product Performance - Sales of Opdivo increased by 7% to $2.53 billion, while Orencia generated $964 million, up 3%. Yervoy sales rose 15% to $739 million, and Reblozyl saw a 37% increase to $615 million [3] Financial Metrics - Adjusted earnings per share were reported at $1.63, surpassing the consensus of $1.51 [3] - Gross margin on a GAAP basis was 71.9%, and on a non-GAAP basis, it was 72.9%, down from 75.1% and 76.0% respectively from the previous year, indicating a change in product mix [4] Guidance and Market Reaction - The company narrowed its fiscal 2025 earnings guidance to $6.40-$6.60, compared to the consensus of $6.38, and raised its sales guidance to $47.5 billion-$48 billion, above the consensus of $47.33 billion, reflecting strong Growth Portfolio performance [5] - Following the earnings report, Bristol-Myers Squibb shares rose by 4.40% to $44.47 [5]

Alnylam Pharmaceuticals - Alnylam's market worth exceeded many large-cap drugmakers, indicating a challenging position due to high expectations from investors [1] - The company reported quarterly revenues of approximately $1.25 billion, surpassing analyst estimates by nearly $300 million, and boosted its financial forecasts [4] - Amvuttra generated $685 million in sales, exceeding the expected $622 million, indicating growing demand among patients with transthyretin amyloidosis [4] - Despite strong earnings, Alnylam shares fell nearly 7%, attributed to high share prices and elevated investor expectations [3] Biogen - Biogen's latest earnings report showed revenues just above $2.5 billion, narrowly exceeding Wall Street expectations [7] - The company’s aging multiple sclerosis drugs accounted for about 40% of total revenue, while new product launches showed muted performance [8] - Biogen revised its revenue forecast for the year to flat to up 1%, but lowered annual earnings per share estimates to $14.50 to $15 [9] Neurocrine Biosciences - Neurocrine reported a 28% year-over-year increase in net sales, totaling $785 million, but shares fell by 9% following the announcement [11] - The company plans to invest an additional $150 million in expanding sales teams, raising concerns about future margins [12] - Neurocrine received a civil investigative demand from the DOJ regarding Ingrezza, which may have unsettled investors despite a solid quarterly performance [13][14] Bristol Myers Squibb - Bristol Myers' earnings report was positive overall, but the performance of its schizophrenia drug Cobenfy was seen as underwhelming compared to other products [15][16] - Cobenfy sales reached $43 million in the third quarter, with ongoing trials testing its efficacy in treating Alzheimer's-related psychosis [18] - Despite uncertainties surrounding Cobenfy, Bristol Myers' shares rose 7% due to improved financial guidance and quarterly revenue performance [20]

Core Insights - Bristol-Myers Squibb Company (BMY) reported third-quarter 2025 adjusted earnings per share (EPS) of $1.63, exceeding the Zacks Consensus Estimate of $1.48, but down from $1.80 in the same quarter last year [1] - Total revenues reached $12.2 billion, surpassing the Zacks Consensus Estimate of $11.8 billion, and reflecting a 3% increase year-over-year [1] - The stock price increased following the release of these better-than-expected quarterly results [1] Revenue Breakdown - U.S. revenues increased by 1% to $8.3 billion, while international revenues rose by 6% year-over-year to $3.9 billion [3] - Revenues from the Growth Portfolio totaled $6.9 billion, marking an 18% year-over-year increase, driven by the immuno-oncology portfolio and drugs like Reblozyl, Camzyos, and Breyanzi [4] - Sales of the immuno-oncology drug Opdivo increased by 7% year-over-year to $2.5 billion, surpassing estimates [5] - Other notable sales included Yervoy at $739 million (up 15%), Reblozyl at $615 million (up 37%), and Breyanzi at $359 million (up 60%) [6][9] Legacy Portfolio Performance - The Legacy Portfolio saw a 12% decline in revenues to $5.4 billion, primarily due to generic competition affecting drugs like Revlimid and Pomalyst [11] - Eliquis, however, surged by 25% to $3.7 billion, making it the top revenue generator for BMY [11] Cost and Margin Analysis - Gross margin decreased to 72.9% from 76% year-over-year due to product mix changes [14] - Adjusted R&D expenses rose by 3% to $2.4 billion, while adjusted marketing and administrative expenses decreased by 10% to $1.8 billion [14] Guidance and Future Outlook - BMY raised its annual revenue guidance to $47.5-$48 billion from $46.5-$47.5 billion, reflecting strong Growth Portfolio performance [15] - Adjusted earnings guidance was updated to a range of $6.40-$6.60, slightly lower than previous estimates due to an unfavorable impact from acquired charges [15][16] Pipeline and Acquisitions - The FDA accepted a supplemental biologics license application for Breyanzi, with a target action date set for December 5, 2025 [17] - BMY announced the acquisition of Orbital Therapeutics for $1.5 billion, which will enhance its pipeline with OTX-201, a next-generation CAR T-cell therapy [19][20] Strategic Initiatives - BMY's strategic productivity initiatives are positively impacting the bottom line, while ongoing collaborations, such as with BioNTech for bispecific antibodies, are expected to broaden its pipeline [21][22]

Core Insights - Merck's third-quarter performance exceeded expectations, but challenges with Gardasil and a mixed sales outlook led to a 2.4% decline in stock price [2][10] - Bristol Myers Squibb also reported strong results, raising its full-year sales outlook, while investors are focused on upcoming clinical trial results [2][11] Merck Performance - Merck reported $17.28 billion in sales, a 4% increase, surpassing forecasts of $16.97 billion [7] - Adjusted earnings were $2.58 per share, exceeding expectations of $2.35, with a 64% year-over-year increase [7] - Keytruda, Merck's leading cancer treatment, generated $8.14 billion in sales, a 10% increase, but fell short of the expected $8.2 billion [8] - Sales of Januvia, a diabetes drug, rose 29% to $624 million, significantly exceeding forecasts of $531 million [9] - Merck's sales guidance for the year is now $64.5 billion to $65 billion, slightly narrowed from previous guidance [9][10] New Drug Developments - Winrevair, a new drug for pulmonary arterial hypertension, saw sales of $360 million, a 141% increase, although it missed the $380 million expectation [4][5] - The patient base for Winrevair is growing, with potential market expansion into other forms of pulmonary hypertension [5] Bristol Myers Squibb Performance - Bristol Myers reported adjusted earnings of $1.63 per share and $12.22 billion in sales, both exceeding expectations [11] - Sales growth was driven by its growth portfolio, which increased 18% year-over-year to $6.9 billion [12] - The company raised its full-year sales outlook to $47.5 billion to $48 billion, up from a previous estimate [14]

Financial Data and Key Metrics Changes - Total company sales for Q3 2025 were approximately $12.2 billion, reflecting strong demand across the business [17] - The growth portfolio saw a 17% year-over-year increase in sales, driven by multiple products including the IO portfolio, Reblozyl, Camzyos, and Breyanzi [6][17] - Gross margin was approximately 73%, primarily due to product mix, with operating expenses decreasing by approximately $100 million to roughly $4.2 billion compared to the same period last year [22] Business Line Data and Key Metrics Changes - Opdivo global sales were approximately $2.5 billion, up 6%, driven by demand in the U.S. and expanded indications [17] - Reblozyl global sales were $615 million, reflecting a 38% increase in the U.S. and a 31% increase outside the U.S. [18][19] - Breyanzi sales were $359 million, growing 58% globally, with U.S. sales up 45% [19] - Camzyos global sales increased 88% to $296 million, with U.S. sales up 76% [20] - Eliquis global sales were $3.7 billion, growing 23%, with U.S. sales up 29% [21] Market Data and Key Metrics Changes - The U.S. market showed strong growth across multiple brands, with significant contributions from the oncology and hematology segments [17][18] - Outside the U.S., sales growth was driven by demand in newly launched markets, particularly for Reblozyl and Breyanzi [19] Company Strategy and Development Direction - The company is focused on long-term sustainable growth, with a strategy to enhance its growth portfolio and align its cost structure with business needs [6][15] - Recent acquisitions, such as Orbital Therapeutics, aim to strengthen the cell therapy franchise and expand the company's capabilities in RNA technology [10][11] - The company anticipates introducing 10 new medicines to the market by the end of the decade, alongside 30 significant life cycle management opportunities [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth portfolio's performance and the ability to navigate through the operating environment, emphasizing financial discipline and strategic investments [15][24] - The company is optimistic about the upcoming data readouts and the potential for new product launches to drive future growth [14][24] Other Important Information - The company is maintaining its full-year revenue guidance, increasing it by $750 million to a range of $47.5 billion to $48 billion [24] - The effective tax rate for the quarter was 22.3%, reflecting the earnings mix [22] Q&A Session Summary Question: Updates on ADEPT program and confidence in studies - Management reiterated confidence in the Cabenfi development program, with ongoing studies and expected results by the end of the year [31][32] Question: Commercialization of Cabenfi and prescriber engagement - The company is pleased with Cabenfi's progress, noting positive physician feedback and a growing number of new trialists [40][41] Question: Competitive landscape for PD-1/VEGF bispecifics - Management expressed confidence in the partnership with BioNTech and the potential of pomitomig to become a new standard of care [50][51] Question: Barriers to adoption for Cabenfi - Management acknowledged the entrenched market dynamics but highlighted positive feedback from physicians and ongoing efforts to educate prescribers [58][59] Question: Cost management and strategic productivity initiatives - The company is on track for $1 billion in cost savings this year and is focused on balancing investments for growth while maintaining financial discipline [66][69]

Financial Data and Key Metrics Changes - Total company sales for Q3 2025 were approximately $12.2 billion, reflecting strong demand across the business, with a 17% year-over-year increase in the growth portfolio [15][4] - Gross margin was approximately 73%, primarily due to product mix, and operating expenses decreased by approximately $100 million to roughly $4.2 billion compared to the same period last year [19][20] - The company generated cash flow from operations of about $6.3 billion in Q3, with nearly $17 billion in cash, cash equivalents, and marketable securities as of September 30 [20][21] Business Line Data and Key Metrics Changes - The oncology portfolio saw Opdivo global sales of approximately $2.5 billion, up 6%, driven by demand in various indications [15][16] - Reblozyl global sales were $615 million, reflecting a 38% increase in the U.S. and a 31% increase outside the U.S. [17] - Breyanzi sales grew 58% globally to $359 million, with U.S. sales up 45% [17] - Camzyos global sales increased 88% to $296 million, while Eliquis global sales were $3.7 billion, growing 23% [18] Market Data and Key Metrics Changes - The U.S. market saw strong growth in multiple brands, with Opdivo and Qvantig both contributing positively to sales [15][16] - Outside the U.S., sales growth was driven by demand in newly launched markets, particularly for Reblozyl and Breyanzi [17] Company Strategy and Development Direction - The company is focused on long-term sustainable growth, with a strategy to enhance and sustain growth through a robust pipeline and business development activities [4][12] - Recent acquisitions, such as Orbital Therapeutics, aim to strengthen the cell therapy franchise and expand the company's capabilities in RNA technology [9][10] - The company anticipates introducing 10 new medicines to the market by the end of the decade, alongside 30 significant life cycle management opportunities [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate through the current operating environment, emphasizing strong execution and financial discipline [14][22] - The company is optimistic about the potential of its pipeline, particularly in addressing unmet medical needs in various therapeutic areas [8][12] Other Important Information - The company is maintaining its full-year revenue guidance, increasing it by $750 million to a range of $47.5 billion to $48 billion, while expecting a decline in the legacy portfolio [22][23] - The effective tax rate for the quarter was 22.3%, and diluted earnings per share were reported at $1.63 [19][20] Q&A Session Summary Question: Updates on clinical site reviews and ADEPT program confidence - Management reiterated confidence in the Cabenfi development program, with ongoing studies and positive external data supporting their outlook [36][37] Question: Commercial characterization of Cabenfi's reimbursement speed - The company is pleased with Cabenfi's progress, noting strong physician feedback and access, while acknowledging the need for continued education and expansion of prescribing [51][52] Question: Competitive landscape for PD-1/VEGF bispecifics - Management expressed confidence in the partnership with BioNTech and the potential of pomitomig to become a new standard of care, with ongoing trials across multiple indications [66][67] Question: Barriers to adoption for Cabenfi - Feedback from physicians has been positive, with ongoing efforts to educate on switching from D2 blockers to Cabenfi, and the company is tracking ahead of recently launched D2s in schizophrenia [72][75] Question: Cost management and strategic productivity initiatives - The company is on track for $1 billion in cost savings this year, with a clear line of sight to $2 billion by 2027, while balancing investments in growth and maintaining financial discipline [86][87]