Bristol Myers Squibb announced Thursday it is implementing major cost-cutting measures including thinning out its management layers. The pharma also reported modest revenue growth despite taking a 6% sales hit for lung cancer therapy Opdivo.
Bristol Myers Squibb revealed in its first-quarter 2024 earnings report on Thursday that it will implement a sweeping “strategic productivity initiative” in a bid to generate approximately $1.5 billion in cost savings through 2025, including eliminating around 2,200 jobs by the end of 2024.
Under the realignment effort, BMS is looking to optimize its operations by reducing management layers, among other cost-cutting measures, according to the company’s Thursday investor presentation. The pharma said it will use these savings to fund innovation, paying particular attention to R&D programs with the highest potential return on investment with an eye toward long-term growth.
These layoffs may already have started. On Wednesday, BioSpace reported that BMS had resumed terminating employees as part of an ongoing effort to thin its workforce by 10%.
BMS will also prioritize the development of its key growth brands and minimize third-party expenditures. Overall, the business strategy should help BMS become “more agile, drive efficiency across the company, and prioritize investing in opportunities where we see the greatest potential” CEO Chris Boerner said in a statement.
“We will disproportionately invest in high-return opportunities, which improves our portfolio ROI and strengthens our growth profile in the second half of the decade,” CFO David Elkins said during an investor call Thursday morning, adding that BMS made the decision to “discontinue and externalize several clinical assets.”
BMS’ restructuring efforts come as the pharma sustained a 6% drop in sales for Opdivo (nivolumab). In the first quarter of 2024, the lung cancer therapy brought in nearly $2.1 billion worldwide, down from a little more than $2.2 billion in revenue during the same period in 2023.
The CAR-T therapy Abecma (idecabtagene vicleucel)—which Elkins said was “impacted by ongoing competitive pressures” and “unfavorable pricing pressures”—also took a 44% sales hit, brining only $82 million worldwide in Q1, compared to $147 million in the same period last year. In April 2024, the FDA approved the use of Abecma as an earlier-line treatment for relapsed or refractory multiple myeloma.
Despite these sales slumps, BMS brought in almost $11.87 billion in Q1, a 6% increase from the same period the prior year and beating consensus estimates, according to an investor note from William Blair analyst Matt Phipps.
Reblozyl (luspatercept), indicated for anemia in beta thalassemia and myelodysplastic syndromes, was a strong driver of BMS’ Q1 growth raking in $354 million worldwide and representing a 72% increase. The melanoma therapy Opdualag (nivolumab/relatlimab) also performed well in the quarter, with sales spiking 76% to $206 million.
The anticoagulant Eliquis (apixaban) was BMS’ top-performing asset bringing in $3.72 billion, which is a 9% jump from the same period in 2023.
BMS also updated its 2024 guidance on Thursday, mostly to reflect spending changes after the acquisition of Karuna and RayzeBio. Total revenue remains unchanged—the company continues to expect a low single-digit percentage increase year-over-year.
Tristan Manalac is an independent science writer based in Metro Manila, Philippines. Reach out to him on LinkedIn or email him at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
