BMS to cut 2200 jobs, trim pipeline in effort to be more ‘agile’
25 Apr 2024
AcquisitionFinancial StatementExecutive ChangeIPO
Bristol Myers Squibb on Thursday said that around 2200 staff will be impacted by cost-cutting measures that are designed to save about $1.5 billion by the end of 2025, with two-thirds of the savings coming from R&D. The company noted that the initiative includes a reduction in management layers in an effort to speed decision making, along with pipeline rationalisation and site consolidation.
CEO Christopher Boerner, who took over as CEO from Giovanni Caforio at the end of last year, indicated that the “strategic productivity initiative…will allow us to be more agile…and prioritise investing in opportunities where we see the greatest potential." Meanwhile, chief financial officer David Elkins noted that the “vast majority” of the cost savings will come from Bristol Myers Squibb’s legacy operations, rather than from the integration of recent acquisitions.
12 programmes discontinued
The company said that in terms of its pipeline, it will focus on assets and programmes that offer a higher return on investment. Chief medical officer Samit Hirawat noted that around 12 programmes have so far been discontinued or earmarked for externalisation, including its efforts in CTLA4 beyond Yervoy.
“We had set the bar with” Yervoy, Hirawat remarked, adding “we decided that if the data are not going to be better…we shouldn't be continuing that programme.” The executive noted that the same was true for its anti-SIRPα asset, which “did not meet muster,” while the market size for the experimental BET inhibitorBET inhibitor BMS-986158 in myelofibrosis meant it would not be a growth driver.
“The data are pretty good…but really from our perspective [BMS-986158] does not meet the threshold to be [a] driver for our growth potential. So that programme we are not going to be continuing,” Hirawat explained. “Throughout the year, we'll continue to look at these same principles and see what else we need to take out from our pipeline. And either externalise it or not be able to develop it further,” Hirawat said.
Cuts already under way
Bristol Myers Squibb started cutting jobs earlier this year amid plans to terminate a total of 423 employees in San Diego following its $4.8-billion acquisition of Mirati Therapeutics. The company has also recently completed the purchases of Karuna Therapeutics for $14 billion and RayzeBio for $4.1 billion, with associated costs hitting profit in the first quarter.
Bristol Myers Squibb posted a loss of $11.9 billion in the three-month period, versus a profit of $2.3 billion in the prior year. Meanwhile, sales rose 5% to $11.9 billion, topping forecasts of $11.5 billion, with growth led by new drugs such as Reblozyl (+72% to $354 million) and Opdualag (+76% to $206 million), as well as older medicine Eliquis (+9% to $3.7 billion). However, revenue from Opdivo fell 6% to $2.1 billion.
Chief commercialisation officer Adam Lenkowsky explained that Opdivo was hit by changes in buying patterns in the US, but the company is "confident we will see accelerating growth this year."
Bristol Myers Squibb reiterated its sales outlook for the year of low-single-digit growth, but cut its earnings guidance to now include the acquisitions of Karuna and RayzeBio. The drugmaker expects earnings per share of between $0.40 and $0.70, revised down from the earlier range of $7.10 to $7.40 per share.
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