Bristol Myers Squibb will make even deeper cuts to its organization to enhance efficiencies as it faces the 2028 loss of exclusivity for its blockbuster drugs Eliquis and Opdivo.
Bristol Myers Squibb’s strategic re-organization rolls on with an additional $2 billion in savings through 2027 on top of an ongoing program that had targeted $1.5 billion in cut costs by the end of 2025. The dramatic upheaval of the BMS business, spurred when CEO Chris Boerner took the helm in 2023, has been painful, with layoffs and program discontinuations.
The New Jersey pharma explained in its fourth quarter earnings release that the new savings will come from changes in organizational design and efforts to enhance operational efficiency. The goal is to become a “leaner, more efficient company while investing behind growth brands and promising areas of science,” according to the press release.
The latest update comes as BMS approaches a loss of exclusivity for key assets Eliquis and Opdivo around 2028. Analysts wondered on a fourth quarter earnings call whether there might be additional cuts as this cliff approaches. Boerner could not guarantee this will be the last round of cost cuts but stated that this new round is an extension of what was done last year, after more cost savings were identified during the previous round of cuts.
“We cataloged a number of opportunities for us to become a more agile company, to become more nimble and speedy in terms of how we operate and given where we are on that program, as well as where we are with respect to [loss of exclusivity],” the CEO said on Thursday’s earnings call. “We think it makes sense for us to capitalize on those opportunities now.”
In terms of the loss of exclusivity period, Boerner pointed to growth products like Cobenfy, which was approved in September 2024 for schizophrenia. BMS is planning three Phase III trials of the asset, which was picked up in the $14 billion acquisition of Karuna Therapeutics at the end of 2023.
The company is also on the lookout for deals or partnerships to further build out the pipeline.
“We’re really focused on strengthening our position in the core therapeutic areas that we have today,” Boerner said. “We need to like the science and feel that we’re the rightful owners of it. The financials have to make sense.”
Liking the science was a one of the reasons the Karuna acquisition worked so well, Boerner said. The business development team considered multiple options but ultimately “zeroed in on the science that was coming out of Karuna as compelling.”
“There’s no magic bullet with respect to how you approach business development from from our standpoint, but I think there were a few things that we did well with the Karuna acquisition that will frame how we continue to do business development,” Boerner said.
The decision to buy Karuna wasn’t taken lightly, and the team was careful with the shareholder dollars it was managing, he added. “The senior leadership team of the company owned the decision to move forward with that acquisition.” The executives also took the time to get to know the Karuna leadership team to ensure they could take Cobenfy and develop it in ways the smaller company had not been capable of. But most of all, BMS conducted all this due diligence quickly.
BMS CFO David Elkins said that the original cost savings program has realized $1.1 billion in savings to date, with $400 million to go. “We have entered 2025 with a stronger foundation to deliver on our long-term growth strategy,” Elkins said.
BMS recorded $12.3 billion in revenue for the fourth quarter, an 8% increase and a beat on Leerink Partners’ estimate of $11.6 billion. GAAP earnings per share (EPS) were 4 cents, while non-GAAP was $1.67. Full-year revenue rose 7% to $48.3 billion, with a GAAP EPS loss of $4.41, but non-GAAP was a gain of $1.15.
The revenue increases came from across BMS’s portfolio, including legacy products like Eliquis and Revlimid and growth products like Opdivo, Yervoy and Reblozyl.
The company expects 2025 revenue to be around $45.5 billion, with non-GAAP EPS falling between $6.55 and $6.85.
Editor’s note: This story has been updated to include additional details on the December 2023 Karuna acquisition.
