Bristol Myers Squibb's Q3 Earnings: Cobenfy Challenges and Industry-Wide Pricing Discussions

Bristol Myers Squibb (BMS) reported better-than-expected third-quarter earnings, with total revenue of $12.2 billion. However, the company faced questions about the slow uptake of its recently approved schizophrenia drug, Cobenfy, and ongoing discussions about drug pricing with the U.S. government.

Cobenfy's Market Challenges and Future Prospects

Cobenfy, approved by the FDA in September 2024 as the first novel drug for schizophrenia in 35 years, generated $43 million in sales for the quarter, falling short of analyst estimates. BMS CFO David Elkins reported that the drug has brought in $105 million to date. Despite the lower-than-expected figures, CEO Chris Boerner remained optimistic, citing "steady growth" and positive feedback from physicians.

The company acknowledged challenges in breaking into the market with Cobenfy's new mechanism of action, emphasizing the need to change "deeply ingrained D2 [dopamine] prescribing habits through education." BMS is also exploring Cobenfy's potential in Alzheimer's disease, with three ongoing studies: ADEPT-2, ADEPT-4, and ADEPT-1. The company anticipates needing positive results from two of these three studies to support regulatory approval for Alzheimer's disease psychosis.

Strong Performance from Growth Portfolio

While Cobenfy faced challenges, BMS's growth portfolio performed well overall. Key contributors included:

• Opdivo (cancer treatment): $2.5 billion
• Breyanzi (CAR T therapy): $359 million, up 58% year over year
• Camzyos: $296 million, an increase of 88%

The growth portfolio accounted for $6.9 billion in revenue, more than half of BMS's total Q3 revenue. In light of these results, BMS raised its full-year 2025 revenue guidance from $46.5-$47.5 billion to $47.5-$48 billion.

Drug Pricing Negotiations and Industry Concerns

As with other pharmaceutical companies this earnings season, BMS addressed questions about ongoing drug pricing negotiations with the U.S. government. CEO Boerner described the discussions as "frequent" and "constructive," though not always fully aligned.

Boerner expressed agreement with the need for price equalization, stating, "U.S. prices need to come down." He highlighted progress in markets like the U.K. but emphasized the importance of preserving the U.S. ecosystem for innovation while achieving pricing objectives.

The company is closely monitoring various issues, including the potential impact of the current federal government shutdown and ongoing discussions about Most Favored Nation drug pricing and tariffs. These factors could have significant implications for the pharmaceutical industry as a whole.