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Bristol-Myers Squibb Q1 Earnings: Is CEO Caforio's Sudden Departure A Concern?


  • Bristol-Myers Squibb Company announced Q1 2023 earnings yesterday - and the shock departure of its longtime CEO Giovanni Caforio the day before.
  • Caforio oversaw the $74bn acquisition of Celgene - battling his own biggest shareholder to get the deal done.
  • BMY's actual Q123 earnings saw revenues decline year-on-year, although EPS grew, and guidance for 2023 was upheld.
  • Sales of new products were a little lower than might be expected however - concerns as major products like Revlimid have lost patent protection.
  • With Opdivo and Eliquis also losing patent protection this decade, Caforio's sudden departure may look a little suspicious - is the departing leaving his successor a poisoned chalice?
  • We're currently running a sale for our private investing group, Haggerston BioHealth, where members get access to portfolios, market alerts, real-time chat, and more. Learn More »

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The New York based Pharma giant Bristol-Myers Squibb Company (NYSE:BMY) announced its Q1 2023 earnings yesterday, but before it did so, the company dropped a bombshell.

Chief Executive Officer Giovanni Caforio shared the

This article was written by

Edmund Ingham profile picture

Edmund Ingham is a biotech consultant. He has been covering biotech, healthcare, and pharma for over 5 years, and has put together detailed reports of over 1,000 companies. He leads the investing group Haggerston BioHealth.

The group is for both novice and experienced biotech investors. It provides catalysts to look out for and buy and sell ratings. It also provides product sales and forecasts for all the Big Pharmas, forecasting, integrated financial statements, discounted cash flow analysis and market by market analysis. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BMY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (26)

Dividend Ambassador profile picture
Good summary. Even if BMY can just keep profits at or near the level of 2022 through 2025 or 2026 when growth resumes that will be a MAJOR accomplishment. BMY has MASSIVELY increased free cash flow and profits since announcing the CELG acquisition. The valuations are extremely low. PE 8 or PE 8.5 and BMY can keep buying back tons of stock while valuations remain depressed until all the new molecules allow them to resume growing the bottom line even more than they already have in the past few years.

Remember folks, BMY earned $2 adjusted per share in 2015 and is now making around $8 a share adjusted, last year and this year. People are losing site of this fact. There has been a massive step up in earnings. To maintain that while repositioning for the LOE’s before resuming growth in a couple to a few years would be fantastic.
bbob68 profile picture
I see that a couple of commentators have mentioned the litigation over the CVR case involving former Celgene stockholders. Does the author have any insights/comments in that regard?
dachorses profile picture
He might have tripled revenues, etc, etc, etc but the share price depending on when you bought in 2015 has basically gone sideways where most other big pharma plays have outperformed, so IMO I rather see a change.
Steve Rasher profile picture
@Edmund Ingham Thanks for the article, but I believe the headline and theme of Giovanni Cafario's "sudden retirement" is a bit of hyperbole. Rather, as $BMY's PR, see: news.bms.com/... aptly explains this is a well thought out succession plan of the CEO role. Moreover, Cafario is not leaving the company as you seem to suggest in your article, but, rather, he is remaining as Executive Chairman, and, thus, he will remain intimately involved in the company's affairs, albeit not with a hand on the rudder regarding day-to-day matters. I commend $BMY and its BoD for such a thoughtful and well executed transition. The stock selloff, if, indeed, attributable to Cafario stepping down as CEO, is much ado about nothing. Steve
Edmund Ingham profile picture
@Steve Rasher thanks Steve good points well made - although I think Caforio does plan to step away permanently - the Executive Chairman role is only temporary I believe.
Steve Rasher profile picture
@Edmund Ingham Of course the Executive Chairman role is temporary, but this is what a well managed succession plan looks like. We will see a smooth transition, and I strongly expect that we will not see significant changes in strategy as Boerner has been by Cafario's side for a number of years. I don't find it odd at all that Cafario is stepping aside in the middle of the transition process as it is moving forward and Boerner is well equipped to continue executing on it. Steve
Steve Kean profile picture
@Steve Rasher I agree, this is exactly how any executive retirement should be managed. The transition period is perfect, you don’t want it to be too short nor too long.
Rex Rode profile picture
Well maybe, just maybe, this has to do with the ongoing 8 billion dollar CVR case....
Dividend Ambassador profile picture
@Rex Rode Rex, c’mon, that is ridiculous. BMY did absolutely NOTHING wrong. They followed the terms of the CVR payout/non-payout PERFECTLY to the letter. The Feds dragged their feet using COVID as an excuse and the CVR terms did not include a “pandemic” clause or an “act of God clause”. It would be financial mismanagement to give in to greedy CELG CVR holders who want something for nothing. You have NEVER once provided even a single piece of evidence that BMY conspired with the Feds to slow down the approval. Not a single email. NOTHING. And either has anyone else.
Rex Rode profile picture
@killiondt It's public knowledge that BMY was woefully unprepared for two of the FDA inspections. The FDA cited issues that were almost purposely mismanaged. There's also other deeper issues here too. As U know, the main case is working through the courts with the final discovery period to end in about 11 months. I believe BMY will be looking to settle in early 2024. That said, I'm unsure if the CVR group will even want to settle. Time will tell but don't discount this Nov. departure by Cafario as coincidental. There are reasons he's leaving. They are just not telling U or the other shareholders now. Just give it a little time.
kpmedia profile picture
@killiondt BMY mishandled the filings, and then the CVR conveniently ran out of time just before the refiled filings. They screwed up, not the CELG shareholders. Time to pay up.
One more thing before you go, Mr Cafario. There is the tiny matter of settling the $6.4 billion lawsuit with holders of the Celgene CVR that you engineered to lower the price of the deal to acquire Celgene along with the successful pipeline of drugs which has worked out so well for BMY.
Dividend Ambassador profile picture
@Going Forward Going Forward, you are going backward. The CELG CVR deal had no pandemic clause. That is the excuse the Feds used for delay in approval process. BMY would be mistreating its own shareholders to give money to the CVR holders that it DOES NOT OWE!
Rex Rode profile picture
@killiondt have U ever taken the time to read the FDA inspection report/s? Also, the FDA reports on the misfiling that took place initially? It's pretty clear purposeful mistakes were made. This is public information. Plus, there's a possible smoking gun issue too. As I have said from the beginning, I expect BMY to eventually offer a settlement in the 3-4 billion range. However, after the discovery period ends, the CVR group might feel their case is so strong they will reject any settlement offer and take this to court.
Dividend Ambassador profile picture
@Rex Rode You never give up! Do you have a link to the inspection report and/or the FDA reports on the “misfiling”? Anyway glad you are finally pointing to something on paper. Can’t wait to read.
Puche profile picture
A solid summary. We’ll balanced and informative. Solid job. Well done.

Of course that’s just my two cents. Slow and steady! Good luck to all!

Long BMY and dripping dividends and adding to position on pullbacks (recently). Stock has paid off well since right before the CELG deal closed. Add in all the dividends and premiums collected from the derivative side and I’m pleased. OMO the stock continues to be cheap but no doubt there are risks moving forward. Once street buys the LT story, investors should see a quick upward breakout. Again my two cents.
Caforio's departure is not a "shock" or "sudden" this is just hyperbole. In the works for 2+ years, if it had not been for the pandemic he would have left earlier. You can search for hidden meaning but there is none.
littlecubbie2019 profile picture
I agree. I am concerned by the news of him leaving. Long bmy
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