Will Opdivo & Eliquis Drive Bristol-Myers (BMY) Q3 Earnings?

Bristol-Myers’ (NYSE:BMY) immuno-oncology drug, Opdivo, which is approved for multiple oncology indications fueled the top line in the second quarter. The uptake of the drug continued to be strong in metastatic and adjuvant melanoma, and first-line renal cell carcinoma in the United States and the trend most likely continued in the third quarter. However, the size of the eligible pool of second-line lung cancer patients declined in the second quarter, which impacted demand sequentially, and the same most likely prevailed in the third quarter.

In international markets, Opdivo recorded growth for first-line renal cell carcinoma in the second quarter and the third-quarter top line is likely to have benefited from the same. However, Opdivo is likely to have faced competition from Merck’s (NYSE:MRK) Keytruda in the adjuvant melanoma indication.

Apart from the drug’s sales, investors will look forward to key pipeline updates on the ongoing trials of the drug. The part 1a of the phase III Checkmate-227 study, evaluating Opdivo plus low-dose Yervoy versus chemotherapy, met the co-primary endpoint of overall survival in first-line non-small cell lung cancer (NSCLC) patients.

Most recently, a pivotal, phase III study, CheckMate-9LA, evaluating a combination regimen of the company’s PD-1 inhibitor, Opdivo, and Yervoy in first-line advanced NSCLC, met its primary endpoint of superior overall survival at a prespecified interim analysis. The regimen targets the lucrative first-line lung cancer space.

Eliquis delivered a stellar performance during the first half of the year, propelled by increased share in the novel oral anticoagulant (NOAC) market, a trend that most likely continued in the third quarter. Eliquis' demand grew more than 30% year over year in the United States during the second quarter.

Oncology drug, Sprycel, might also have contributed to the top line, driven by recent label expansions. Additionally, multiple myeloma drug, Empliciti, is likely to have contributed significantly to the top line on recent label expansions.

The Zacks Consensus Estimate for third-quarter sales and earnings is pegged at $5.80 billion and $1.06, respectively.

Bristol-Myers’ shares have gained 7.7% in the year so far compared with the industry’s growth of 1.6%.

Apart from these, investors will focus on further updates on the company’s impending acquisition of Celgene Corp (NASDAQ:CELG) . In August, Celgene inked an agreement with Amgen (NASDAQ:AMGN), whereby the latter would acquire the global rights to Otezla for $13.4 billion in cash. The decision to divest Otezla was taken in connection with the ongoing regulatory approval process for Bristol-Myers’ pending merger with Celgene. The EC has granted unconditional approval to this acquisition. The transaction is currently expected to close by the end of 2019 or the beginning of 2020.

Zacks Rank & A Stock to Consider

Bristol-Myers currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space is Novartis (NYSE:NVS) , which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Novartis’ earnings estimates have increased to $5.16 from $5.11 in the past seven days.

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