BMY's 2026 Legacy Erosion Accelerates, Testing Growth Portfolio Resilience Amid Oncology Competition

What happened

Bristol Myers Squibb's legacy drugs are experiencing sharp generic erosion in 2026, intensifying pressure on top-line revenue as expected from prior warnings. Eliquis growth and management guidance provide some offset, but this key asset faces ongoing IRA negotiation risks and competitive headwinds in oncology. The DeepValue report confirms that BMY's Growth Portfolio now represents 47% of revenue with mid-teens growth, yet it must accelerate to counterbalance Legacy declines estimated at ~64% of 2025 revenue at LOE risk by 2030. High leverage at net debt/EBITDA of ~12.9x and integration challenges from recent M&A add complexity to the company's turnaround efforts. Despite these hurdles, strong free cash flow and a ~44% discount to DCF value offer potential upside, contingent on successful execution of new launches and deleveraging.

Implication

The accelerated legacy decline in 2026 highlights the critical need for BMY's Growth Portfolio to deliver robust revenue growth, particularly in competitive oncology markets where assets like Opdivo face stiff rivalry. Eliquis remains a pivotal driver, but its growth trajectory is vulnerable to IRA pricing pressures and future generic entries, requiring careful monitoring of guidance updates. Elevated leverage restricts financial maneuverability, making consistent free cash flow generation and progress toward the $10B debt-reduction goal by 2026 essential for reducing balance-sheet risk. Pipeline successes, such as for Breyanzi or radiopharma programs, are necessary to validate the renewal thesis and justify the stock's current discount to intrinsic value. Without clear evidence of offsetting legacy losses and deleveraging, the 'POTENTIAL BUY' stance could deteriorate, urging a cautious, show-me approach from value-focused investors.

Thesis delta

The new article on 2026 projections does not shift the core thesis, as the DeepValue report already anticipated severe legacy erosion and the reliance on Growth Portfolio offset. However, it reinforces that the pace of decline is materializing as feared, underscoring the urgency for execution on new launches and cost savings. This confirmation emphasizes that investor vigilance should center on quarterly revenue mix shifts and deleveraging progress to assess BMY's ability to navigate its steep patent cliff.