3 major earnings updates: Bristol-Myers, Lilly, & Valeant all soar past expectations
- American pharma giants Eli Lilly and Bristol-Myers Squibb both reported Q2 earnings on Thursday that significantly beat analyst expectations. Meanwhile, Canada's Valeant pharma reported a quarterly loss—but still beat estimates from Wall Street and raised full-year expectations.
- BMS and Lilly significantly outpaced estimates, with earnings per share of 53 cents and 90 cents, respectively. That's a far cry from various analysts' consensus expectations of 34 cents and 74 cents, respectively.
- Valeant posted a Q2 loss of $53 million—a significant decline from this period one year ago, when the company posted a profit. But it still wound up outperforming with EPS of $2.56 versus the $2.46 estimate, and the loss makes sense considering Valeant's "growth-by-acquisition" strategy. Lilly shares were up modestly in morning trading, BMS shares were down modestly, and Valeant share were up nearly 4%.
All in all, Thursday has been an impressive one for big pharmas and their quarterly earnings. Let's get down to the numbers.
For Lilly, the downward effect of generics and currency fluctuations (led by a strong dollar) were offset by a signficant surge from its animal health business (whose revenues rose nearly 40%). However, several major assets saw lower sales, including Alimta, Cymbalta, and Humalin—but Lilly expressed optimism for future growth, citing potential new hits such as the diabetes drugs Jardiance and Trulicity the cancer medication Cyramza.
Bristol-Myers, whose rock star anti-PD-1 cancer immunotherapy Opdivo has been raking in (mostly) victory after victory, had a big quarter, too, with a 7% rise in revenues—$400 million more than analyst expectations. And that was actually dampened by the continued effect of a strong dollar. Without currency fluctuation, those revenues would have been up a stellar 16%. A major reason for this, beyond Opdivo (which saw $122 million in quarterly sales?). The hepatitis C treatments Daklinza and Sunvepra, which smashed expectations with $479 million in sales, as opposed to the expected $260 million. BMS is raising its full-year profit expectations on the report.
As for Valeant, the "growth-by-acquisition" giant, the company yet again beat analysts' estimates (a continuing trend with Valeant). This was led by the strength of its dermatology business, and the company raised its expectations for the year thanks to strong expected sales of the irritable bowel syndrome drug Xifaxan (which it gained from its acquisition of Salix earlier this year). Valeant also struck a deal to buy the large Egyptian pharma Amoun for $800 million just last week. Valeant's share price has literally doubled from exactly one year ago, from $124 per share on July 23, 2014, to $246 per share in morning trading today.