Pharmaceutical giant Bristol Myers Squibb announced on Thursday a significant expansion of its ongoing cost reduction initiatives, revealing plans to reduce annual expenses by $2 billion through 2027. The announcement came during the company’s quarterly earnings call, where executives outlined their strategy to navigate upcoming patent expirations for key revenue-generating drugs.
The latest cost-cutting measures build upon previous restructuring efforts announced in April 2023, which affected approximately 2,200 employees. While specific workforce impacts of the new initiative weren’t disclosed, Chief Financial Officer David Elkins indicated the company would achieve savings through broad operational streamlining across various business segments.
The pharmaceutical manufacturer faces significant revenue challenges as patents expire for several of its blockbuster medications. The company is already experiencing some generic competition for Revlimid, its multiple myeloma treatment. More concerning are the looming patent expirations for two major products: the cancer immunotherapy drug Opdivo and the blood thinner Eliquis.
Despite reporting fourth-quarter results that exceeded analyst expectations, with strong performances from products including Eliquis, Camzyos (a heart medication), and Sotyktu (an
anti-inflammatory drug), the company’s 2025 revenue projection of $45.5 billion fell short of Wall Street estimates by approximately $1 billion. This forecast represents a roughly 6% decline from 2024 figures, reflecting anticipated generic competition across multiple product lines.
CEO Chris Boerner emphasized that these cost-reduction measures will help transform Bristol Myers into a “leaner, more focused company” as it addresses these market challenges. The company has already achieved $1.1 billion in annual savings toward its previous $1.5 billion target, though those initial savings were largely reinvested in the business, according to Elkins. The new $2 billion reduction plan differs in that these savings will directly improve the bottom line, with half of the cuts expected to be realized in 2025.
To offset revenue losses from patent expirations, Bristol Myers has pursued an aggressive acquisition strategy, including recent purchases of RayzeBio, Mirati Therapeutics, and Karuna Therapeutics. These acquisitions have strengthened the company’s pipeline in oncology and neurological treatments, with Karuna’s Cobenfy already showing promising market performance.
The company’s growth portfolio, which includes newer medications such as Camzyos, the cell therapy Breyanzi, and immunotherapy Opdualag, demonstrated strong performance with approximately 21% growth in 2024. However, this wasn’t enough to completely offset concerns about future revenue decline, leading financial analyst John Boylan of Edward Jones to note that the lower-than-expected guidance “tarnished” what was otherwise a “strong quarter” for the company.
The strategic moves reflect Bristol Myers’ efforts to maintain financial stability while transitioning through a period of
significant market changes. With combined annual revenues of nearly $26 billion from Eliquis and Opdivo at stake, the company’s enhanced cost-cutting measures represent a proactive approach to maintaining profitability amid impending generic competition. The implementation of these efficiency measures, combined with strategic acquisitions and the performance of newer products, illustrates Bristol Myers’ comprehensive strategy to navigate through this challenging period of patent expirations and market transitions.