Bristol-Myers Squibb is losing patent protection, but it is preparing to expand its portfolio
The pharmaceutical company Bristol-Myers Squibb (BMY) will lose patent protection for several of its popular drugs in the coming years.
It is likely to harm its revenue, but it has already assembled a portfolio of promising candidates who will compensate for losses. Bristol-Myers Squibb to lose about $13 billion in annual revenue by 2025 due to the termination of patent protection for drugs such as Eliquis and Revlimid.
But at the same time, management plans to receive from $18 billion to $23 billion in new annual revenue from increased sales of existing drugs and expected new drugs. In addition, Bristol Myers is already working on expanding indications for currently approved drugs and approving new ones.
In total, Bristol-Myers Squibb’s portfolio includes 22 mid- and late-stage clinical programs and more than 60 early-stage programs, each of which can be profitable in the future. In addition, the expansion of the use of drugs and the approval of new ones will ensure stable revenue growth rates in the range of up to 10% per year until 2025.
The company’s free cash flow is currently $14.6 billion because the management of Bristol-Myers Squibb plans to continue repurchasing shares, increasing dividends, and investing in the acquisition of smaller companies. For example, due to the purchase of Celgene in 2019, Bristol-Myers Squibb gained access to one of the best—selling drugs – the blood cancer drug Revlimid. Last year, sales of the drug exceeded $12 billion, but its patent protection expires in 2023.
Another highly profitable drug of the company, Eliquis, will lose protection a few years later. Currently, almost all late-stage candidates are existing medications for expanded use. However, there are new developments.
One of the completely new candidates capable of compensating for losses will be Mavacamten, a drug for treating obstructive Hypertrophic Cardiomyopathy (this heart disease makes it difficult to pump blood).
Thus, Bristol-Myers Squibb is preparing for the changing situation and is working on a diversified portfolio that will help compensate for losses after the termination of patents.
