Bristol Myers Squibb Q3 2026: revenue up 7% to $13.1B, but $1.56B of deal charges cut EPS 3% to $1.05

Bristol Myers Squibb's third quarter of 2026 (three months ended September 30) was a good quarter for sales and a weak one for reported profit, and the reason for the gap is a set of licensing deals. Total revenue rose 6.9% to $13.07 billion. Net income attributable to BMS slipped 1.8% to $2.16 billion, and diluted EPS fell 3% to $1.05. The drag was $1.56 billion of "acquired IPRD" (in-process research and development: upfront and milestone payments for drug programs licensed from other companies, which BMS must expense at once). That compares with $633 million a year ago. Most of it was $775 million for a license from China's Hengrui and a $500 million anniversary payment to BioNTech.

Key metrics

Note on operating margin: BMS's income statement has no "operating income" line. As in our Q2 report, we compute it as revenue minus cost of products sold, SG&A, R&D, acquired IPRD and amortization of acquired intangibles. That is every expense line except "Other (income)/expense, net", which mixes interest, royalty income, investment gains and restructuring. The result is $2,843M this quarter versus $3,006M a year earlier. This is our calculation, not a figure BMS reports. Without acquired IPRD, the same margin would be 33.7%, up from 29.8%.

Note on cash flow: BMS reports cash flow only year to date. We derived the quarter by subtracting the six-month figure in the Q2 10-Q ($4,497M in 2026, $5,871M in 2025) from the nine-month figure in this 10-Q ($8,678M and $12,182M).

Year to date (nine months): revenue was $37.53B, up 5.2%. Net income attributable to BMS was $8.16B, up 36.7%, and diluted EPS was $3.98, up from $2.93. The nine-month comparison benefits from last year's $1.5B BioNTech upfront payment in Q2 2025.

Growth Portfolio: +12%, slower than Q2

BMS splits its drugs into a Growth Portfolio (newer drugs with years of patent life left) and a Legacy Portfolio (older drugs, most facing or already hit by generics). The Growth Portfolio rose 11.7% to $7.66 billion and made up 59% of revenue.

What the table shows:

• Opdivo is shifting to its injectable version, not losing to a rival. Opdivo, an IV-drip cancer immunotherapy, fell 6%. Opdivo Qvantig, the same drug injected under the skin, grew fivefold. Together they were $2,708M, up 4.2%. The shift matters because Qvantig has its own, longer patent protection.
• Four drugs did most of the work. Breyanzi (a CAR-T cell therapy for blood cancers), Camzyos (for a thickened heart muscle), Reblozyl (anemia in blood disorders) and Opdualag (melanoma) together added $494M year on year.
• Cobenfy went backwards. The schizophrenia drug was the launch investors watched most. It made $57M, down from $63M in Q2, and is still under 0.5% of revenue.
• Growth slowed from Q2's 14.6% to 11.7%. The Growth Portfolio added $805M year on year. The older non-Eliquis drugs lost $894M, so the newer drugs alone are not yet covering the generic losses.

Legacy Portfolio: Eliquis carried it

Without Eliquis, the Legacy Portfolio fell 55%, from $1,619M to $725M. Revlimid and Pomalyst, both multiple myeloma drugs, lost the most. U.S. generic lenalidomide (Revlimid's copy) has had no volume caps since January 31, 2026, and generic Pomalyst entered the U.S. in March 2026.

Eliquis rose 25% because of a pricing change more than because of more patients. The filing says: "In 2026, the Company reduced the list price for Eliquis in the U.S., which resulted in higher realized average net selling prices due to lower rebates." Put simply, BMS cut the sticker price and now gives back much less in rebates, so it keeps more per prescription. The Medicare "maximum fair price" for Eliquis, which the government set under the Inflation Reduction Act, also took effect on January 1, 2026. The filing gives no separate dollar figure for it.

The effect shows across the company:

• Gross product sales (at list price) fell 20%, from $22.49B to $17.97B, while net product sales rose 6.4%.
• U.S. gross-to-net adjustments (the discounts and rebates taken off list-price sales) fell from $9.8B to $4.4B.
• Medicaid and Medicare rebates fell from $4,887M to $1,649M.

Eliquis has two deadlines. Its composition-of-matter patents and their extensions (SPCs) in the EU expire in November 2026. In the U.S., BMS and Pfizer sued in October 2026 an applicant seeking to sell apixaban, the generic name for Eliquis.

U.S. vs. international

All of the growth came from the U.S., mostly from Eliquis pricing and Growth Portfolio demand. International sales were flat. (The earnings release adds "Other" to international and reports $4.0B, up 3%.)

What the headline numbers hide

• The deal charges are real costs, but they come and go. Acquired IPRD was $1,558M: $775M for the Hengrui license ($600M upfront plus a $175M payment due in 2027), $500M to BioNTech and $250M of SystImmune milestones. BMS keeps these charges in its non-GAAP figures, so adjusted EPS also fell, by 17% to $1.35. The release puts the net EPS hit from IPRD and licensing income at $0.58 this quarter, against $0.20 last year. Without it, adjusted EPS would have been about $1.93, against about $1.83, a rise of roughly 5%. That figure is our calculation from the release's numbers.
• A low tax rate helped a lot. The effective tax rate fell from 29.5% to 14.8%. The filing credits the mix of earnings across countries, plus $160M of tax reserves booked in Q3 2025 that did not recur. At last year's rate, net income would have been about $370M lower. That is roughly $0.18 a share and covers about half of the IPRD swing.
• Some lost income is permanent. The diabetes royalties from AstraZeneca ($286M in Q3 2025) ended on December 31, 2025. Interest expense fell by $77M.
• Gross margin slipped from 71.9% to 68.3%. The filing blames higher Eliquis profit-sharing with Pfizer, plus a one-time $140M contract-termination charge. That charge is not among BMS's non-GAAP adjustments, so it also lowers adjusted EPS.
• Cash flow lags profit. Operating cash flow for nine months fell $3.5B to $8.68B. The filing says the drop was "primarily driven by lower net customer receipts" after generic losses and the Eliquis list-price cut. The cash flow statement shows $3.87B more paid out on rebates and discounts than accrued, against a $1.96B build-up a year ago. In the quarter, cash covered net income 1.9 times. For nine months the ratio was 1.06, against 2.0 last year. That is consistent with old, larger rebates still being paid out, and the drag should fade once they are cleared.
• GAAP vs adjusted. The $0.30 a share gap between GAAP EPS ($1.05) and non-GAAP EPS ($1.35) is mostly amortization of acquired intangibles ($458M) and $187M of restructuring. BMS has booked restructuring every year under its cost-saving programmes. Amortization fell 45% after the Pomalyst intangible was fully amortized in Q4 2025.
• No buyback help. BMS repurchased no shares in the nine months, and diluted shares rose 0.7% to 2,053M. Dividends were $1,287M in the quarter (derived from the year-to-date figures).

On balance the quarter is understated. Before the acquired-IPRD charges, pre-tax profit rose 9%, yet reported EPS fell 3% because deal payments were $925M higher than a year ago. The unusually low 14.8% tax rate offset about half of that hit.

Did last time's read hold up?

Our Q2 report expected the second half to look like Q2. Partly right:

• Eliquis kept growing. It rose 25% (Q2: +22%).
• Revlimid and Pomalyst kept shrinking. They fell 47% and 81%.
• The Growth Portfolio missed the "mid-teens" we expected. It grew 11.7%, against 14.6% in Q2.
• Both regulatory decisions we flagged went BMS's way. The FDA approved iberdomide (now Zenbexus) for multiple myeloma on August 13. It approved Camzyos for patients from 30 kg on September 30.
• Cobenfy is still small. It fell back to $57M.
• Cash flow, which we named as the best test of the Eliquis price reset, is still weak. Quarterly operating cash fell by a third from a year ago.

Takeaway: The 3% EPS decline comes from BMS's licensing deals, not from its drug sales. Pre-tax profit before $1.56B of acquired IPRD grew 9%. The quality of that growth is thin, though. Eliquis added more revenue than the whole company did, gross margin fell 3.6 points and cash flow fell by a third. The Growth Portfolio's 12% growth still does not cover the $894M lost to generics on the other older drugs.

Guidance and outlook

From the October 29, 2026 earnings release (8-K Exhibit 99.1), BMS's full-year 2026 non-GAAP guidance:

The EPS range looks like a cut, but the whole change is the deal charges. Without acquired IPRD and licensing income, the range moved up from about $6.77–7.02 to $6.95–7.15 (our arithmetic from the table). The revenue midpoint rose by $500M. With $4.97 of non-GAAP EPS through nine months, the new range implies $1.38–1.58 for Q4. Q3's 68.3% gross margin was below the 69–70% target, while the nine-month figure is about 70%. Another quarter like Q3 would put the full-year target at risk.

Our read: Q4 should look much like Q3. Expect high-single-digit revenue growth led by Eliquis pricing and the newer drugs, and continued collapse in Revlimid and Pomalyst. Three things to watch:

1. Eliquis in Europe after the EU patents and SPCs expire in November 2026. International Eliquis sales could start to fall from Q4.
2. Operating cash flow. It should recover toward net income once the old Eliquis rebates are paid out. Another quarter far below 2025 would suggest the pricing reset is worth less than the revenue line implies.
3. Whether the Growth Portfolio speeds back up. It needs about $900M a year of extra sales to cover the older drugs' generic losses. In Q3 it added $805M. Pomalyst also faces its Medicare-set price from January 1, 2027, though generics have already taken most of its sales.

Source: Bristol-Myers Squibb Form 10-Q for the quarter ended September 30, 2026 (filed October 29, 2026); six-month cash flow figures from the Form 10-Q for the quarter ended June 30, 2026. Guidance and the acquired-IPRD EPS impact are from the Q3 2026 earnings release, Exhibit 99.1 to the Form 8-K filed October 29, 2026. Non-GAAP EPS is a company-defined measure that excludes items BMS designates as specified; it is not a GAAP figure.