10-K: Bristol-Myers Squibb 2025: Growth Portfolio Drives Revenue Amidst Legacy Erosion

Bristol-Myers Squibb reports flat 2025 revenues, with strong growth in its new portfolio offsetting declines from generic competition and increased government rebates.

Summary

• Total Revenues were $48,194 million in 2025, relatively flat compared to $48,300 million in 2024.
• Diluted GAAP Earnings Per Share (EPS) significantly improved to $3.46 in 2025 from a loss of $(4.41) in 2024.
• Non-GAAP EPS increased substantially to $6.15 in 2025 from $1.15 in 2024.
• Growth Portfolio revenues increased 17% to $26,409 million in 2025, driven by higher demand and new indication launches.
• Legacy Portfolio revenues decreased 15% to $21,785 million in 2025, primarily due to generic erosion of Revlimid, Pomalyst, Sprycel, and Abraxane.
• U.S. revenues decreased 2% in 2025, impacted by higher government channel rebates.
• International revenues increased 5% (3% excluding foreign exchange impacts) in 2025.
• Acquired In-Process Research and Development (IPRD) expenses significantly decreased to $3,721 million in 2025 from $13,373 million in 2024.
• Amortization of acquired intangible assets decreased by 63% to $3,317 million in 2025, primarily due to Revlimid and Pomalyst acquired marketed product rights being fully amortized.
• Net debt position decreased by $4.4 billion to $(34,043) million as of December 31, 2025.
• Cash flow provided by operating activities was $14,156 million in 2025, a $1.0 billion decrease from 2024, primarily due to higher Gross-to-Net (GTN) payments.
• The company completed the acquisition of Orbital Therapeutics for $1.7 billion (net $1.5 billion cash) and obtained a global exclusive license from Philochem for OncoACP3 for $350 million upfront.
• A strategic collaboration was entered into with BioNTech for the co-development and co-commercialization of pumitamig, involving an upfront payment of $1.5 billion.
• A new radiopharmaceutical manufacturing facility was opened in Indianapolis, Indiana, and a cell therapy manufacturing facility was completed in Leiden, Netherlands, both in 2025.
• An agreement with the U.S. government was announced in December 2025, including providing Eliquis for free to the Medicaid program effective January 1, 2026, and offering direct-to-patient access for several products at approximately 80% discounts.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, with strong growth in the new product portfolio and significant improvements in GAAP and Non-GAAP EPS, despite challenges from generic erosion and pricing pressures on legacy products.

Positives

• Diluted GAAP EPS significantly improved to $3.46 in 2025 from a loss of $(4.41) in 2024, driven by lower Acquired IPRD charges and reduced amortization of acquired intangible assets.
• Non-GAAP EPS increased substantially to $6.15 in 2025 from $1.15 in 2024, reflecting improved underlying business performance.
• Growth Portfolio revenues increased 17% to $26,409 million in 2025, demonstrating successful uptake and expansion of newer products.
• Key product approvals and label updates include Breyanzi for relapsed or refractory FL, MCL, and MZL; Camzyos for oHCM in Japan and simplified patient monitoring; Opdivo + Yervoy for HCC and MSI-High CRC; Opdivo Qvantig for multiple adult solid tumors; Augtyro for NSCLC and NTRK-positive solid tumors; and Inrebic for myelofibrosis.
• Strategic acquisitions and collaborations, such as Orbital Therapeutics (in vivo CAR T-cell therapy), BioNTech (pumitamig bispecific antibody), and Philochem (OncoACP3 radiopharmaceutical), enhance the company's pipeline.
• Expansion of manufacturing capabilities with the opening of a new radiopharmaceutical facility in Indianapolis and the completion of a cell therapy facility in Leiden, Netherlands.
• Net debt position decreased by $4.4 billion in 2025, improving financial flexibility.
• Cost savings from the ongoing strategic productivity initiative contributed to a 14% decrease in Selling, General and Administrative expenses and an 11% decrease in Research and Development expenses.
• Positive topline results were announced for the Phase III SCOUT-HCM trial evaluating Camzyos in adolescents with oHCM, meeting its primary endpoint.
• Positive data from the pivotal Phase III POETYK PsA-1 and POETYK PsA-2 trials for Sotyktu in adults with active psoriatic arthritis were reported.
• Partner Zenas BioPharma, Inc. announced positive results from the Phase III INDIGO trial of obexelimab in Immunoglobulin G4-Related Disease (IgG4-RD), meeting its primary endpoint.

Negatives

• Total revenues were relatively flat year-over-year, indicating challenges in overall growth despite new product successes.
• Legacy Portfolio revenues decreased 15% due to significant generic erosion, particularly for Revlimid, Pomalyst, Sprycel, and Abraxane.
• U.S. revenues decreased 2%, impacted by higher government channel rebates.
• U.S. revenues for Abecma decreased 14% due to increased competition in BCMA targeted therapies.
• U.S. revenues for Zeposia decreased 3% due to lower demand, and U.S. revenues for Sotyktu decreased 5% due to lower average net selling prices.
• Eliquis will be provided for free to the Medicaid program effective January 1, 2026, as part of the U.S. Government Agreement, which will negatively impact future revenue.
• The 'maximum fair price' under the Inflation Reduction Act (IRA) will apply to Eliquis (effective January 1, 2026) and Pomalyst (effective January 1, 2027) in the U.S. Medicare channel, leading to reduced prices.
• Orencia was selected for government-set price negotiation starting in 2028 under the IRA.
• Royalties related to Keytruda* and Tecentriq* are expected to terminate on December 31, 2026, and royalties from the diabetes business terminated on December 31, 2025, impacting future royalty income.
• The Phase III ODYSSEY-HCM trial evaluating Camzyos for non-obstructive hypertrophic cardiomyopathy (nHCM) did not meet its dual primary endpoints.
• The Phase III ARISE trial evaluating Cobenfy as an adjunctive treatment for schizophrenia did not meet the threshold for statistical significance for its primary endpoint.
• The Phase III RELATIVITY-098 trial for Opdualag in adjuvant melanoma did not meet its primary endpoint of recurrence-free survival.
• The Phase III INDEPENDENCE trial for Reblozyl in myelofibrosis-associated anemia did not meet its primary endpoint of red blood cell transfusion independence.
• Irregularities were identified in the Phase III ADEPT-2 study for Cobenfy in Alzheimer's Disease psychosis, requiring additional patient enrollment.
• Cash flow from operating activities decreased by $1.0 billion in 2025, primarily due to higher GTN payments.
• Litigation and other settlements resulted in charges of $434 million in 2025.
• A loss on debt redemption of $356 million was recognized in 2025.
• An intangible asset impairment charge of $564 million was recorded for Augtyro in 2025 due to lower revised cash flow projections.
• IPRD impairment charges of $385 million were recorded in 2025 due to pipeline reprioritization and revised cash flow projections for oncology assets.

Risks

• Increased pricing pressure and other restrictions in the U.S. and abroad, including from the IRA, 340B program, and state-level actions, continue to negatively affect revenues and profit margins.
• Difficulties or delays in the development and commercialization of new products, with a high rate of failure inherent in the R&D process (e.g., approximately 93% of small molecules and 91% of biologics fail from Phase I).
• Loss of market exclusivity earlier than expected due to patent challenges or generic/biosimilar competition, as seen with Eliquis in Europe and Revlimid in the U.S. and EU.
• Intense competition from other biopharmaceutical companies and generic manufacturers, leading to progressive price reductions, decreased sales volume, or both.
• Difficulties, delays, and disruptions in the supply chain, manufacturing, distribution, and sale of products due to factors like product seizures/recalls, non-compliance with cGMP, geopolitical factors, reliance on sole/single source suppliers, and evolving manufacturing processes for complex therapies.
• Litigation claiming infringement of intellectual property could result in significant damages or injunctions preventing the manufacture, sale, or use of affected products.
• Legal matters, including antitrust, securities, pricing, sales and marketing practices, environmental, and product liability cases, could adversely affect operations, profitability, or financial condition.
• Compliance costs and negative results of non-compliance with extensive global regulations, including those related to cybersecurity, data protection, storage, and privacy, are increasing.
• Expectations relating to environmental, social, and governance (ESG) considerations and related reporting obligations expose the company to potential liabilities, increased costs, and reputational harm.
• Changes to tax regulations, such as Pillar Two legislation and the OBBBA, could negatively impact earnings.
• Failure of third parties (suppliers, vendors, outsourcing partners, alliance partners) to meet their contractual, regulatory, and other obligations could have a material adverse impact on the business.
• Product labeling changes for marketed products, such as the boxed warning for CAR-T cell therapies regarding T-cell malignancies, could negatively impact revenues and profit margins.
• The illegal distribution and sale by third parties of counterfeit or unregistered versions of products or stolen products could harm revenues, earnings, and reputation.
• Use of social media platforms can present risks and challenges, including brand damage, information leakage, and liability.
• Dependence on information technology systems, including artificial intelligence programs, and the risk of cybersecurity incidents that could disrupt business and result in theft of proprietary information.
• Dependence on several key products (Eliquis, Opdivo, Opdivo Qvantig, Orencia, Reblozyl, Yervoy) for a majority of revenues, cash flows, and earnings, making the company vulnerable to issues affecting these products.
• Failure to execute the business strategy or to identify and effectively manage acquisitions, divestitures, alliances, and other portfolio actions could adversely impact growth and profitability.
• Significant indebtedness could have negative consequences, reducing financial flexibility and potentially leading to credit rating downgrades.
• Adverse changes in U.S. and global economic and political conditions, including currency fluctuations, global inflation, geopolitical conflicts, and pandemics, could adversely affect operations and profitability.
• There is no guarantee that the company will pay dividends or repurchase stock in the future.
• The company's amended bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain lawsuits, which could limit stockholders' ability to obtain a judicial forum they find favorable.

Future Outlook

The company expects continued generic erosion within its Legacy Portfolio in 2026, primarily due to Revlimid and Pomalyst in the U.S. It anticipates realizing approximately $2.0 billion in cost savings by the end of 2027 from its strategic productivity initiative. Capital expenditures are expected to be approximately $1.3 billion in 2026. The company plans to open a new state-of-the-art R&D facility in San Diego, California during 2026. Topline data for milvexian LIBREXIA-AF and LIBREXIA-STROKE trials are expected in 2026. The PDUFA goal date for Sotyktu sNDA for active psoriatic arthritis is March 6, 2026, and for Opdivo sBLA in cHL is April 8, 2026.

Management Comments

• Our principal strategy is to combine the resources, scale and capability of a large pharmaceutical company with the speed, agility and focus on innovation typically found in the biotech industry.
• Our focus as a biopharmaceutical company is on discovering, developing and delivering transformational medicines for patients facing serious diseases in areas where we believe that we have an opportunity to make a meaningful difference: oncology, hematology, immunology, cardiovascular, neuroscience and other areas where we can also create long-term value.
• Our priorities are to focus on transformational medicines where we have a competitive advantage, drive operational excellence throughout the organization and strategically allocate capital for long-term growth and shareholder returns.
• We continue to expect to realize approximately $2.0 billion in cost savings by the end of 2027 in connection with the 2025 expansion of our ongoing strategic productivity initiative.
• We believe that driving long-term business value is at the heart of living our purpose, enabling us to be leaders and difference-makers for generations to come.

Industry Context

StockSavvy.ai notes that Bristol-Myers Squibb's strategic shift towards a 'Growth Portfolio' and away from 'Legacy Portfolio' products is a common industry response to patent cliffs and generic competition. The significant investment in R&D, acquisitions (Orbital, RayzeBio, Karuna, Mirati), and collaborations (BioNTech, Philochem, BioArctic) reflects the intense competition in biopharmaceuticals, particularly in oncology, hematology, and immunology, where companies are racing to develop novel modalities like CAR-T cell therapies and radiopharmaceuticals. The increasing pressure from government pricing regulations, such as the IRA in the U.S., is a pervasive industry trend forcing companies to adapt pricing strategies and seek new market access approaches, as evidenced by BMS's U.S. Government Agreement. The focus on digital capabilities and AI in R&D and commercialization also aligns with broader industry efforts to enhance productivity and accelerate drug development.

Comparison to Industry Standards

• The R&D process (target identification to major market approval) typically takes about fifteen years, which is consistent with industry standards.
• Industry success rates from 2020-2024 show approximately 93% of small molecules entering Phase I fail to achieve regulatory approval, and 91% for biologics, indicating BMS's R&D risks are in line with industry norms.
• The decline in revenue for branded products after loss of market exclusivity is a standard industry challenge, with the U.S. market experiencing more rapid declines than most other developed countries.
• The company's strategy to combine resources of a large pharmaceutical company with the agility of biotech is a common approach among large players seeking to maintain innovation and competitiveness.
• The company's investment in novel modalities like cell therapies, protein degraders, ADCs, and radiopharmaceuticals aligns with cutting-edge industry trends in oncology and hematology.

Management Changes

Corporate Governance

Legal Proceedings

• Eliquis U.S.: Patent infringement action initiated against Azurity Pharmaceuticals, Inc. in U.S. District Court for the District of Delaware, challenging a formulation patent.
• Eliquis Europe: Ongoing litigations in multiple European countries against companies seeking to launch generic apixaban products before patent expiration. Final negative decision in UK (generics on market). Final positive decisions in Norway, Spain, Sweden, Switzerland, France, Belgium, Netherlands. Initial negative decisions in Finland, Ireland, Slovakia (appeals pending/overturned). Initial positive decisions in Croatia, Czech Republic, Greece, Portugal (appeals pending). Generics have entered market in Finland, Poland, Portugal while proceedings are pending.
• Pomalyst U.S.: Celgene initiated patent infringement action against Sandoz Inc. in U.S. District Court for the District of New Jersey; settled and dismissed in November 2025.
• Zeposia U.S.: BMS filed patent infringement actions against Synthon BV and Apotex Inc. in U.S. District Court for the District of Delaware; both settled and dismissed in September and November 2025, respectively.
• Plavix* Texas Litigation: BMS and certain Sanofi entities named defendants in a Texas state court action by the Texas AG and a qui tam relator regarding labeling, sales, and promotion of Plavix*. Case removed to U.S. District Court for the Eastern District of Texas. BMS and Sanofi also sued Texas AG to enjoin the lawsuit. No trial dates scheduled.
• Celgene Securities Litigations: Putative class actions and individual actions alleging federal securities law violations against Celgene and officers. Settlement in principle reached for class action (preliminary approval Dec 2025, final hearing May 2026). Settlement reached for individual actions in Jan 2026.
• Contingent Value Rights Litigations: Lawsuits filed against BMS alleging breaches of the Celgene CVR Agreement, specifically failure to use diligent efforts for liso-cel (Breyanzi) FDA approval and failure to permit record inspection. One lawsuit dismissed for lack of subject matter jurisdiction (Sept 2024), appealed by plaintiff. A new lawsuit filed (Nov 2024) with similar allegations; motion to dismiss denied in substantial part (Dec 2025), finding plaintiff to be successor trustee. BMS filed motion for reconsideration/immediate appeal.
• IRA Litigation: BMS filed lawsuit against HHS and CMS challenging constitutionality of IRA drug-pricing program. Court denied BMS's summary judgment motion (April 2024), affirmed by Third Circuit (Sept 2025). BMS filed petition for certiorari at Supreme Court (Dec 2025).
• 340B Litigation: BMS filed lawsuit against HRSA and HHS challenging HRSA's determination regarding cash rebate model for 340B program. U.S. District Court granted HRSA summary judgment (May 2025). BMS appealed to U.S. Court of Appeals for the District of Columbia Circuit (oral argument Nov 2025).
• Thalomid and Revlimid Litigations: Putative class action lawsuits alleging antitrust, consumer protection, and unfair competition violations related to Revlimid patents and copay assistance for Thalomid and Revlimid. Certain complaints dismissed with leave to amend (June 2024), amended complaints filed (Aug 2024), motions to dismiss pending. Related actions pending in San Francisco Superior Court and Philadelphia County Court.
• Pomalyst Antitrust Class Action: Putative class actions alleging antitrust, consumer protection, and unjust enrichment violations related to Pomalyst patents. Complaints dismissed (March 2025), plaintiffs sought leave to amend. Additional similar suit filed (June 2025).
• Environmental Proceedings: Involved in investigation and remediation at 15 current or former facilities and identified as a Potentially Responsible Party (PRP) at approximately 21 former waste disposal or reprocessing facilities. Estimated share of future costs for these sites is $61 million as of December 31, 2025.

Related Party Transactions

• BMS and Pfizer jointly develop and commercialize Eliquis, sharing profits and losses equally globally, except in certain countries where Pfizer commercializes and pays BMS a sales-based fee.
• BMS and Ono jointly develop and commercialize Opdivo, Yervoy, and several investigational compounds in Japan, South Korea, and Taiwan, sharing profits, losses, and development costs.
• BMS and Ono also jointly develop and commercialize Orencia in Japan, with co-promotion fees paid based on sales to assigned customer accounts.
• BMS and Janssen jointly develop milvexian, sharing global development costs and, upon approval, global profits and losses equally.
• BMS licenses Reblozyl from Merck, paying tiered royalties of 20% to 24% of net sales.
• Merck licenses Winrevair* from BMS, paying royalties of 22% of net sales.
• BMS and BioNTech entered into a global strategic collaboration for pumitamig, sharing global profits and losses equally (subject to exceptions).
• BMS and SystImmune have a global strategic collaboration for izalontamab brengitecan, jointly developing and commercializing in the U.S. and sharing profits/losses. SystImmune handles China, BMS handles rest of world, with royalties exchanged.

Stakeholder Impact

• Shareholders: Positive impact from improved GAAP and Non-GAAP EPS, reduced debt, and strategic pipeline advancements. Potential negative impact from generic erosion of legacy products, IRA pricing pressures, and ongoing litigation risks. Dividend payments are subject to Board discretion.
• Patients: Benefits from new product approvals and expanded indications (e.g., Breyanzi, Camzyos, Opdivo + Yervoy, Augtyro, Inrebic, Sotyktu). Potential for increased access to certain products through direct-to-patient programs and lower prices under the U.S. Government Agreement. Risks from product labeling changes (e.g., CAR-T cell therapy safety warnings) and potential supply chain disruptions.
• Employees: Strategic productivity initiative aims to streamline operations, potentially impacting workforce. Investments in R&D facilities and upskilling for AI indicate commitment to employee development and future growth opportunities.
• Customers (Wholesalers, Distributors, Pharmacies, Hospitals): Impacted by changes in pricing, rebates, and distribution models (e.g., 340B program, direct-to-patient offerings).
• Creditors: Improved net debt position and new debt issuances indicate active debt management. The credit rating downgrade from S&P (A+ to A) suggests increased leverage concerns.
• Regulatory Authorities: Ongoing engagement with FDA, EMA, HHS, IRS, and other global regulators due to drug approvals, pricing regulations, and tax matters.

Next Steps

• Continue to evaluate the impact of the IRA on results of operations.
• Monitor potential future agreements with government entities regarding pricing and reimbursement.
• Continue to assess the full scope and commercial implications of the OBBBA.
• Continue patient enrollment and advance the ADEPT-2 study for Cobenfy in AD psychosis.
• Expect topline data for milvexian LIBREXIA-AF and LIBREXIA-STROKE trials in 2026.
• PDUFA goal date of March 6, 2026, for Sotyktu sNDA for active psoriatic arthritis.
• PDUFA goal date of April 8, 2026, for Opdivo sBLA in cHL.
• Final approval hearing for Celgene Securities Class Action settlement scheduled for May 2026.
• Opening of a new state-of-the-art R&D facility in San Diego, California during 2026.
• Continue to make capital investments in cell therapy and other manufacturing capabilities.
• Continue to pursue activities to advance and expand the pipeline through internal R&D and business development.
• Continue to realize approximately $2.0 billion in cost savings by the end of 2027 from the strategic productivity initiative.

Key Dates

Recommendation

The company shows a strong pipeline and growth in new products, leading to significantly improved EPS. However, this is offset by substantial generic erosion of legacy products and increasing pricing pressures from government regulations like the IRA, which will continue to impact key revenue drivers like Eliquis and Pomalyst. While strategic acquisitions and R&D investments are positive, the ongoing legal challenges and the inherent risks of drug development warrant a cautious 'hold' stance for a seasoned investor, awaiting clearer trends in revenue stabilization and successful pipeline commercialization against these headwinds.

Keywords

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