UPDATED: Bristol Myers cutting $1.5B in costs in less than 2 years, with 2,200 employees impacted in 2024

Bristol Myers Squibb is the latest large pharma to wield the restructuring ax, with plans to cut $1.5 billion in costs by the end of 2025, including laying off more than 2,000 employees.

The massive restructuring plans included in BMS’ first-quarter earnings report (PDF) Thursday detail an overhaul across the business, including site closures and a “pipeline rationalization.” The company also said it would undergo a “reduction of management layers” and reduce third-party spending. All told, about 2,200 employees are expected to be laid off in 2024. The changes are an attempt to be more "agile," according to CEO Chris Boerner, Ph.D.

On this morning's earnings call, Chief Financial Officer David Elkins said about two-thirds of the savings could come from R&D spending with the other third cut from MS&A. Chief Medical Officer Samit Hirawat, M.D., subsequently specified that the company was ending work on about a dozen programs, including CTLA4- , SIRPα- and BET-targeting meds. 

"Throughout the year we'll continue to look at these same principles and see what else we need to take out from our pipeline and either externalize it or not be able to develop it further," he said. 

BMS plans to reinvest the savings in potential blockbusters. One asset that Chief Commercial Officer Adam Lenkowsky highlighted was cell therapy Breyanzi, saying BMS was "very excited about this product" after stabilizing U.S. sales in the first quarter. 

"We anticipate robust growth this year," he said. Among the layoffs are teams in Washington state, including staffers working on Breyanzi, according to sources familiar with the decision. 

The New Jersey drugmaker brought in $11.9 billion in revenue for the quarter, up 5% compared to the same period in 2023, driven by Yervoy, Reblozyl and Opdualag. But there were signs of trouble, namely a 6% drop in global Opdivo sales. 

BMS' latest announcement means that Big Pharma’s season of restructurings continues unabated. Sanofi has been laying off employees and cutting earlier-stage research after a “full pipeline reprioritization,” detailed by Houman Ashrafian, Ph.D., to staff. Much of the cost-savings have centered on dwindling investments in oncology, shifting resources to immunology and inflammation research. 

Pfizer’s multibillion-dollar restructuring in 2023 cost jobs across the globe, with the pharma most recently ending research at a site in Boulder, Colorado, and closing down an internal R&D subunit that worked closely with physician-scientists to develop new drugs. Biogen also turned to layoffs last year, cutting 1,000 employees. 

Over the last six months, BMS has been aggressive on the M&A front, spending $14 billion on Karuna Therapeutics and $4.1 billion on radiopharma biotech RayzeBio. Karuna’s late-stage schizophrenia treatment, KarXT, is expecting an FDA approval decision in September 2024.

Elkins set expectations high, saying KarXT could be a billion-dollar blockbuster in multiple indications. The company is currently hiring neuroscience field reps to hit the ground running assuming the drug is approved in the last quarter of the year.