Bristol Myers Beats Earnings Expectations. It’s Still Optimistic About New Schizophrenia Drug.

Bristol Myers Squibb stock is down 18% this year as of the close of trading on Wednesday. (GEORGES GOBET / AFP / Getty Images)

A drug trial failure this spring has had no impact on the market for one of Bristol Myers Squibb’s most closely-watched new medicines, the company’s chief commercialization officer, Adam Lenkowsky, told Barron’s ahead of the company’s earnings release Thursday.

The drug, called Cobenfy, is one of the key products Bristol is counting on to take up the slack as patents on three of its top-selling drugs expire in the coming years.

Currently approved to treat schizophrenia, the company is testing Cobenfy in a long list of other conditions. In April, however, the drug failed a late-stage trial called ARISE.

“It’s not the outcome that we had hoped,” Lenkowsky acknowledged Wednesday. Still, he said, “the ARISE data has had no impact, and we don’t believe it will have any impact on the long-term growth of Cobenfy, nor the long-term growth profile of the company. And so it continues to perform very well in the market.”

Lenkowsky said that Cobenfy prescriptions are growing week to week.

On Thursday morning, the company reported sales of Cobenfy for the second quarter of the year that slightly beat Wall Street expectations, along with overall sales and earnings results that also came in ahead of estimates.

The company also raised its full-year revenue guidance. It dropped its non-GAAP earnings guidance to reflect charges related to a deal it signed with BioNTech in June for the rights to jointly develop and sell an experimental cancer medicine.

Bristol stock had gained 3.1% in premarket trading Thursday morning. The shares are down 18% this year as of the close of trading on Wednesday, trailing the S&P 500 Health Care sector index , down 2.7%, and the broader S&P 500 , which is up 8.5%.

The stock is falling as the company enters into an anticipated multi-year sales and earnings slide. Patents expire this year on its cancer medicine Yervoy, and in 2028 on its two best-selling drugs, the blood thinner Eliquis and the cancer medicine Opdivo. FactSet estimates have Bristol’s sales dropping to $46.3 billion this year from $48.3 billion last year, before bottoming out at $37 billion in 2029.

In the second quarter of this year, however, the company performed better than expected, according to results the released Thursday. Revenue was $12.3 billion, better than the $11.4 billion FactSet consensus estimate. Non-GAAP earnings were $1.46 per share, better than the $1.07 per share consensus estimate.

“We’re making good progress on diversifying our portfolio,” Bristol CFO David Elkins told Barron’s.

The company raised its revenue guidance, saying it now expects between $46.5 billion and $47.5 billion in 2025, up from its prior guidance of between $45.8 billion and $46.8 billion.

On earnings, the company now expects non-GAAP earnings of between $6.35 and $6.65 per share in 2025, including a $0.57 per share negative impact related to the BioNTech deal. That’s down from its prior estimate of between $6.70 and $7 per share, though an increase excluding the impact of the BioNTech agreement.

“Once you adjust for that, the underlying EPS we increased by 20 cents,” Elkins said. “So, off to a good start.”

The company has split its products into two buckets, what it calls a “Legacy Portfolio” of older medicines, and a “Growth Portfolio.” Growth Portfolio sales were up 18% compared to the same quarter last year, while Legacy Portfolio sales were up 1%.

Sales of Cobenfy were $35 million in the second quarter, just ahead of the FactSet consensus estimate of $32 million.

In April, the company said that in the ARISE trial—which tested Cobenfy in combination with other schizophrenia drugs—there was not a statistically significant difference in symptoms between patients who added Cobenfy to the commonly-used treatment regimen, and those who added a placebo instead.

That was bad news for Bristol, and raised new questions about its big plans to test and launch the drug in a long list of neurological conditions. Lenkowsky brushed aside those concerns. He said the company has started seven new Phase 3 trials of Cobenfy.

“We believe not only will this be a big drug in schizophrenia, but this is going to be a multi-billion dollar drug fueled by additional indications as well,” Lenkowsky said.

The company will announce the results of another trial of Cobenfy, this one in patients with Alzheimer’s disease psychosis, later this year.

Corrections & Amplifications: Bristol Myers Squibb CFO David Elkins spoke about diversifying the company’s portfolio and the quarter’s EPS. A previous version incorrectly attributed those quotes to CEO Chris Boerner.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com