Bristol-Myers Squibb Company BMY is scheduled to report fourth-quarter 2019 results on Feb 6, before market open.

The company’s shares have rallied 23.8% in the past year compared with the industry’s growth of 10.2%.

Bristol-Myers has an excellent track record. The company delivered a positive earnings surprise of 8.30%, on average, in the trailing four quarters. In the last reported quarter, the company delivered a positive earnings surprise of 10.38%.

Bristol-Myers Squibb Company Price, Consensus and EPS Surprise

Bristol-Myers Squibb Company price-consensus-eps-surprise-chart | Bristol-Myers Squibb Company Quote

Let’s see how things are shaping up for the upcoming announcement.

Factors Driving Growth

Bristol-Myers’ key immuno-oncology drug, Opdivo, is likely to have maintained its stellar performance in the to-be-reported quarter. The drug, which is approved for multiple indications, generated sales of $5.4 billion in the first nine months of 2019, increasing 10% year over year. Sales for the third quarter came in at $1.8 billion. The momentum is likely to have continued in the fourth quarter, owing to demand resulting from the rapid commercial acceptance of the drug for several indications, including melanoma, renal cell carcinoma, hepatocellular carcinoma and second-line non-small-cell lung cancer (NSCLC).

Blood thinner drug, Eliquis, witnessed strong growth in the first nine months of 2019 and was the top revenue generator in the third quarter with sales of $1.9 billion, a trend that most likely continued in the fourth quarter propelled by market share increases.

Arthritis drug, Orencia, raked in sales of $2.2 billion in the first nine months of 2019, up 10% year over year, and $767 million in the third quarter. The drug has most likely boosted the top line in the fourth quarter as well.  In December 2019, the FDA has granted Breakthrough Therapy designation to Orencia  for the prevention of moderate-to-severe acute graft-versus-host disease (GvHD) in hematopoietic stem cell transplants from unrelated donors.

Oncology drug, Sprycel, is also likely to have maintained momentum.

However, the virology business has most likely witnessed a decline in the fourth quarter.

In November 2019, Bristol-Myers completed the acquisition of Celgene Corporation following the receipt of regulatory approval from all government authorities as required by the merger agreement.

The acquisition added oncology drug, Revlimid, to Bristol-Myers portfolio. Revlimid sales came in at $2.8 billion in the third quarter of 2019, up 13% year over year, driven primarily by the adoption of the triplet therapy for myeloma, resulting in increases in treatment duration and market share. Similar contributions are expected in the fourth quarter as well.

In November 2019, the FDA approved Celgene’s Reblozyl for the treatment of anemia in adult patients with beta thalassemia, who require regular red blood cell (RBC) transfusions. The drug was developed in collaboration with Acceleron Pharma Inc. XLRN. The top line is likely to have got a boost from the incremental contribution of Reblozyl.

Apart from the top and bottom-line numbers, investors will focus on updates on label expansion of drugs. In December 2020, the European Commission (EC) approved a new indication for Revlimid (lenalidomide), in combination with rituximab (anti-CD20 antibody), for the treatment of adult patients with previously treated follicular lymphoma.

Key Anticipated Updates

Bristol-Myers recently withdrew its application in the European Union (EU) for the combination of Opdivo (nivolumab) and Yervoy (ipilimumab) for the treatment of advanced non-small cell lung cancer (NSCLC) based on data from CheckMate-227.

Though the Committee for Medicinal Products for Human Use (CHMP) acknowledged the integrity of the patient data, it determined that a full assessment of the application was not possible following the multiple protocol changes the company made in response to the rapidly evolving science and data. Consequently, Bristol-Myers has no plans to resubmit this application in the EU.

In January 2020, the FDA granted a Priority Review status to the Opdivo-Yervoy combination for the treatment of first-line NSCLC.

The FDA has accepted the supplemental Biologics License Application (sBLA) and granted Breakthrough Therapy designation to the combination for the treatment of patients with advanced hepatocellular carcinoma (HCC) previously treated with sorafenib. The FDA granted a Priority Review to the application, with a Prescription Drug User Fee Act (PDUFA) goal date of Mar 10, 2020.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Bristol-Myers this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Bristol-Myers is -2.64% as the Zacks Consensus Estimate stands at 88 cents and the Most Accurate Estimate stands at 86 cents.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks to Consider

Here are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Merck MRK has an Earnings ESP of +1.05% and a Zacks Rank #3. The company is scheduled to release results on Feb 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

Regeneron REGN has an Earnings ESP of +5.39% and a Zacks Rank #3. The company is scheduled to release results on Feb 6.

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Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
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