Bristol Myers Squibb Co. : Bristol-Myers Squibb Delivers a Solid First Quarter with Strong Operating Results and Key R&D Milestones
04/26/2012| 07:35am US/Eastern
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Net Sales Rose 5% to $5.3 Billion in the First Quarter
GAAP EPS Increased 12% to $0.64 in the First Quarter; Non-GAAP EPS
Increased 10% to $0.64
Received Positive European Advisory Opinion for FORXIGA®
for the Treatment of Type 2 Diabetes
Presented Important New Clinical Data from HCV Franchise at EASL
Confirms 2012 GAAP and non-GAAP EPS Guidance Range of $1.90 to $2.00
Bristol-Myers
Squibb Company (NYSE: BMY) today announced first quarter results
that included double-digit earnings growth and important R&D milestones
in its metabolics and hepatitis C (HCV) franchises. The Company also
confirmed guidance for 2012.
"This first quarter performance continues to demonstrate our ability to
balance delivering strong financial results in the short-term with
positioning the Company for long-term success," said Lamberto
Andreotti, chief executive officer, Bristol-Myers Squibb. "We
reported good financial performance at both the top and bottom lines, a
positive opinion in Europe on FORXIGA for the treatment of type 2
diabetes and the presentation of important new clinical data from the
Company's HCV franchise," Andreotti said.
First Quarter
$ amounts in millions, except per share amounts
2012
2011
Change
Net Sales
$
5,251
$
5,011
5
%
GAAP Diluted EPS
0.64
0.57
12
%
Non-GAAP Diluted EPS
0.64
0.58
10
%
FIRST QUARTER FINANCIAL RESULTS
Bristol-Myers Squibb posted first quarter 2012 net sales of $5.3
billion, an increase of 5% compared to the same period a year ago.
U.S. net sales increased 6% to $3.5 billion in the quarter compared to
the same period a year ago. International net sales increased 2% to
$1.8 billion.
Gross margin as a percentage of net sales was 75.2% in the quarter
compared to 73.2% in the same period a year ago.
Marketing, selling and administrative expenses increased 8% to $1
billion in the quarter.
Advertising and product promotion spending decreased 9% to $194
million in the quarter.
Research and development expenses decreased 3% to $909 million in the
quarter.
The effective tax rate on earnings before income taxes was 26.9% in
the quarter, compared to 22.6% in the first quarter last year.
The Company reported net earnings attributable to Bristol-Myers Squibb
of $1.1 billion, or $0.64 per share, in the quarter compared to $986
million, or $0.57 per share, a year ago.
The Company reported non-GAAP net earnings attributable to
Bristol-Myers Squibb of $1.1 billion, or $0.64 per share, in the first
quarter, compared to $1.0 billion, or $0.58 per share, for the same
period in 2011. An overview of specified items is discussed under the
"Use of Non-GAAP Financial Information" section.
Cash, cash equivalents and marketable securities were $8.6 billion,
with a net cash position of $3.2 billion, as of March 31, 2012.
FIRST QUARTER PRODUCT AND PIPELINE UPDATE
Bristol-Myers Squibb's global sales growth in the first quarter was led
by, YERVOY®,
which had sales of $154 million in the quarter, ONGLYZA®/KOMBIGLYZE®
which grew 99%, SPRYCEL®
which grew 34%, ORENCIA®
which grew 28% and BARACLUDE®
which grew 18%.
ELIQUIS®
In February, the U.S. Food and Drug Administration (FDA) extended the
action date by three months for the New Drug Application for ELIQUIS
for the prevention of stroke and systemic embolism in patients with
atrial fibrillation. The new Prescription Drug User Fee Act (PDUFA)
date--the date by which action from the FDA is expected--is June 28,
2012. The Company co-develops ELIQUIS with its partner, Pfizer.
In March, the Company and its partner presented data at the American
College of Cardiology annual meeting in Chicago. Additional analyses
were presented from the ARISTOTLE and AVERROES clinical trials. These
two large Phase III clinical trials compared ELIQUIS to warfarin and
aspirin, respectively, for the prevention of stroke or systemic
embolism in patients with atrial fibrillation.
FORXIGA
In April, the Marketing Authorization Application for FORXIGA received
a positive opinion from Europe's Committee for Medicinal Products for
Human Use (CHMP) for use--as an adjunct to diet and exercise--as
monotherapy in metformin intolerant patients, or in combination with
other glucose lowering medicinal products including insulin. The
CHMP's positive opinion will now be reviewed by the European
Commission, which has authority to approve medicines for the European
Union. The Company co-develops and co-commercializes FORXIGA with its
partner, AstraZeneca.
In April, the Company and its partner, Lilly, received a complete
response letter from the FDA regarding the filing in first-line
non-small cell lung cancer, which was based on the pivotal FLEX study.
The companies do not plan to resubmit the FLEX filing.
HCV
In April, at the annual meeting of the European Association for the
Study of the Liver (EASL) in Barcelona, Spain, the Company presented
important new clinical data on its HCV portfolio, including:
An interim analysis of data from a Phase II study of
treatment-naďve HCV patients that showed an all-oral combination
of daclatasvir, the Company's NS5A replication complex inhibitor,
and GS-7977, Gilead's nucleotide polymerase inhibitor, achieved
Sustained Virologic Response (SVR4) in 100% of genotype 1
patients, and 91% of genotype 2 and 3 patients.
Data from a Phase II study that showed an all-oral combination of
daclatasvir and asunaprevir, the Company's NS3 protease inhibitor,
achieved SVR24 in 77% of difficult-to-treat patients with genotype
1b.
Data from a Phase IIb study that showed peginterferon lambda-1a
achieved SVR24 rates comparable to peginterferon alfa with fewer
flu-like and musculoskeletal symptoms in treatment-naďve HCV
patients with genotype 2 or 3.
FIRST QUARTER BUSINESS DEVELOPMENT UPDATE
In February, the Company completed its $2.5 billion acquisition of Inhibitex,
Inc., a clinical-stage biopharmaceutical company in Atlanta,
Georgia, whose lead compound, INX-189, a nucleotide polymerase (NS5B)
inhibitor in Phase II development, is part of a class of antivirals
that may play a critical role as the backbone of future direct-acting
antiviral-only combination approached to HCV treatment.
In February, the Company and Duke Translational Medicine Institute
announced the formation of a strategic partnership to broaden
interactions between the two organizations and the initiation of the
first project under the agreement. A cross-organizational team will
co-develop and co-implement protocol for a Phase II study of
BMS-986202, formerly AM152, for the treatment of idiopathic pulmonary
fibrosis.
2012 FINANCIAL GUIDANCE
Bristol-Myers Squibb is confirming its 2012 GAAP and non-GAAP EPS
guidance range of $1.90 to $2.00. Key 2012 non-GAAP guidance assumptions
remain unchanged. The non-GAAP guidance excludes specified items as
discussed under "Use of Non-GAAP Financial Information." Details
reconciling adjusted non-GAAP amounts with the amounts reflected in
specified items are provided in supplemental materials available on the
Company's website.
The financial guidance for 2012 excludes the impact of any potential
strategic acquisitions and divestitures, and any specified items that
have not yet been identified and quantified.
Use of Non-GAAP Financial Information
This press release contains non-GAAP financial measures, including
non-GAAP earnings and related earnings per share information, adjusted
to exclude certain costs, expenses, significant gains and losses and
other specified items. Among the items in GAAP measures but excluded for
purposes of determining adjusted earnings and other adjusted measures
are: restructuring and other exit costs; accelerated depreciation
charges; IPRD and asset impairments; charges and recoveries relating to
significant legal proceedings; upfront, milestone and other licensing
payments for in-licensing of products that have not achieved regulatory
approval which are immediately expensed; and significant tax events.
This information is intended to enhance an investor's overall
understanding of the company's past financial performance and prospects
for the future. For example, non-GAAP earnings and earnings per share
information is an indication of the company's baseline performance
before items that are considered by the company not to be reflective of
the company's ongoing results. In addition, this information is among
the primary indicators the company uses as a basis for evaluating
company performance, allocating resources, setting incentive
compensation targets, and planning and forecasting of future periods.
This information is not intended to be considered in isolation or as a
substitute for net earnings or diluted earnings per share prepared in
accordance with GAAP.
Statement on Cautionary Factors
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
regarding, among other things, statements relating to goals, plans and
projections regarding the company's financial position, results of
operations, market position, product development and business strategy.
These statements may be identified by the fact that they use words such
as "anticipate", "estimates", "should", "expect", "guidance", "project",
"intend", "plan", "believe" and other words and terms of similar meaning
in connection with any discussion of future operating or financial
performance. Such forward-looking statements are based on current
expectations and involve inherent risks and uncertainties, including
factors that could delay, divert or change any of them, and could cause
actual outcomes and results to differ materially from current
expectations. These factors include, among other things, effects of the
continuing implementation of the discounts and pharmaceutical company
fee under the 2010 U.S. health care reform law, governmental laws and
regulations related to Medicare, Medicaid, Medicaid managed care
organizations and entities under the Public Health Service 340B program,
pharmaceutical rebates and reimbursement, market factors, competitive
product development and approvals, pricing controls and pressures
(including changes in rules and practices of managed care groups and
institutional and governmental purchasers), economic conditions such as
interest rate and currency exchange rate fluctuations, judicial
decisions, claims and concerns that may arise regarding the safety and
efficacy of in-line products and product candidates, changes to
wholesaler inventory levels, variability in data provided by third
parties, changes in, and interpretation of, governmental regulations and
legislation affecting domestic or foreign operations, including tax
obligations, changes to business or tax planning strategies,
difficulties and delays in product development, manufacturing or sales
including any potential future recalls, patent positions and the
ultimate outcome of any litigation matter. These factors also include
the company's ability to execute successfully its strategic plans,
including its String of Pearls strategy, the expiration of patents or
data protection on certain products, and the impact and result of
governmental investigations. There can be no guarantees with respect to
pipeline products that future clinical studies will support the data
described in this release, that the products will receive necessary
regulatory approvals, or that they will prove to be commercially
successful; nor are there guarantees that regulatory approvals will be
sought, or sought within currently expected timeframes, or that
contractual milestones will be achieved. For further details and a
discussion of these and other risks and uncertainties, see the company's
periodic reports, including the annual report on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K, filed with or
furnished to the Securities and Exchange Commission. The company
undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise.
Company and Conference Call Information
Bristol-Myers Squibb is a global biopharmaceutical company whose mission
is to discover, develop and deliver innovative medicines that help
patients prevail over serious diseases. For more information, please
visit
www.bms.com or follow us on Twitter at http://twitter.com/bmsnews.
There will be a conference call on April 26, 2012, at 10:30 a.m. EDT
during which company executives will review financial information and
address inquiries from investors and analysts. Investors and the general
public are invited to listen to a live web cast of the call at http://investor.bms.com
or by dialing: 913-981-4915, confirmation code: 4074443 Materials
related to the call will be available at the same website prior to the
call.
ABILIFY® is the trademark of Otsuka Pharmaceutical Co., Ltd.
ATRIPLA® is a trademark of both Bristol-Myers Squibb Co. and
Gilead Sciences, Inc.
AVAPRO®, AVALIDE®, and PLAVIX® are
trademarks of sanofi-aventis.
ERBITUX® is a trademark of ImClone LLC. ImClone Systems is a
wholly-owned subsidiary of Eli Lilly and Company.
ELIQUIS® is a trademark of Pfizer, Inc.
If approved, KOMBIGLYZE™ will be known as KOMBOGLYZE™ in the European
Union.
All other brand names of products appearing in all capital letters are
registered trademarks of the Company or one of its subsidiaries.
BRISTOL-MYERS SQUIBB COMPANY
SELECTED PRODUCTS
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011
(Unaudited, dollars in millions)
The following table sets forth worldwide and U.S. reported net
sales for selected products. In addition, the table includes,
where applicable, the estimated total U.S. prescription change for
the retail and mail-order channels for the comparative periods
presented for certain of the company's U.S. pharmaceutical
products based on third-party data. A significant portion of the
company's U.S. pharmaceutical sales is made to wholesalers. Where
changes in reported net sales differ from prescription growth,
this change in net sales may not reflect underlying prescriber
demand.
Worldwide Net Sales
U.S. Net Sales
2012
2011
% Change
2012
2011
% Change
% Change in U.S. Total Prescriptions
vs. 2011
Three Months Ended March 31,
Key Products
Plavix
$
1,693
$
1,762
(4
)%
$
1,630
$
1,641
(1
)%
(6
)%
Avapro/Avalide
207
290
(29
)%
100
160
(38
)%
(33
)%
Abilify
621
624
-
440
460
(4
)%
4
%
Reyataz
358
366
(2
)%
187
181
3
%
-
Sustiva Franchise
386
343
13
%
251
215
17
%
2
%
Baraclude
325
275
18
%
55
48
15
%
11
%
Erbitux
179
165
8
%
173
162
7
%
N/A
Sprycel
231
172
34
%
93
61
52
%
45
%
Yervoy
154
--
N/A
117
--
N/A
N/A
Orencia
254
199
28
%
169
138
22
%
N/A
Nulojix
1
--
N/A
1
--
N/A
N/A
Onglyza/Kombiglyze
161
81
99
%
118
57
*
78
%
Mature Products and All Other
681
734
(7
)%
119
127
(6
)%
N/A
Total
5,251
5,011
5
%
3,453
3,250
6
%
N/A
* In excess of +/- 100%.
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011
(Unaudited, amounts in millions except per share data)
Three Months Ended March 31,
2012
2011
Net Sales
$
5,251
$
5,011
Cost of products sold
1,303
1,343
Marketing, selling and administrative
1,002
928
Advertising and product promotion
194
214
Research and development
909
935
Provision for restructuring, net
22
44
Litigation expense/(recoveries)
(172
)
--
Equity in net income of affiliates
(57
)
(82
)
Other (income)/expense, net
23
(138
)
Total expenses
3,224
3,244
Earnings before Income Taxes
2,027
1,767
Provision for income taxes
545
400
Net Earnings
1,482
1,367
Net Earnings Attributable to Noncontrolling Interest
381
381
Net Earnings Attributable to BMS
$
1,101
$
986
Earnings per Common Share Attributable to BMS:
Basic
$
0.65
$
0.58
Diluted
$
0.64
$
0.57
Average Common Shares Outstanding:
Basic
1,687
1,702
Diluted
1,706
1,714
Other (income)/expense
Interest expense
$
42
$
31
Investment income
(36
)
(21
)
Intangible asset impairment
38
--
Gain on sale of product lines, businesses and assets
--
(9
)
Other income from alliance partners
(47
)
(23
)
Pension curtailment and settlement charges
--
(3
)
Litigation charges/(recoveries)
--
(102
)
Product liability charges
--
26
Other
26
(37
)
Other (income)/expense
$
23
$
(138
)
BRISTOL-MYERS SQUIBB COMPANY
SPECIFIED ITEMS
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011
(Unaudited, dollars in millions)
Three Months Ended March 31,
2012
2011
Cost of products sold*
$
--
$
23
Marketing, selling and administrative**
8
4
Upfront, milestone and other licensing payments
--
88
IPRD impairment
58
15
Research and development
58
103
Provision for restructuring
22
44
Litigation expense/(recoveries)
(172
)
--
Intangible asset impairment
38
--
Loss on debt repurchase
19
--
Acquisition related items
12
--
Litigation charges/(recoveries)
--
(102
)
Product liability charges
--
26
Other (income)/expense
69
(76
)
Increase/(Decrease) to pretax income
(15
)
98
Income tax on items above
8
(28
)
Specified tax (benefit)/charge***
--
(56
)
Income taxes
8
(84
)
Increase/(Decrease) to net earnings
$
(7
)
$
14
* Specified items in cost of products sold include accelerated
depreciation, asset impairment and other shutdown costs
** Specified items in marketing, selling and administrative include
process standardization implementation costs.
***The 2011 specified tax benefit relates to reclass of tax reserves
that were specified in prior periods.
BRISTOL-MYERS SQUIBB COMPANY
RECONCILIATION OF CERTAIN NON-GAAP LINE ITEMS TO GAAP LINE ITEMS
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011
(Unaudited, dollars in millions)
Three months ended March 31, 2012
GAAP
Specified Items*
Non GAAP
Gross Profit
$
3,948
--
$
3,948
Marketing, Selling and Administrative
1,002
(8
)
994
Research and Development
909
(58
)
851
Other (income)/expense, net
23
(69
)
(46
)
Effective Tax Rate
26.9
%
(0.2
)%
26.7
%
Three months ended March 31, 2011
GAAP
Specified Items*
Non GAAP
Gross Profit
$
3,668
23
$
3,691
Marketing, Selling and Administrative
928
(4
)
924
Research and Development
935
(103
)
832
Other (income)/expense, net
(138
)
76
(62
)
Effective Tax Rate
22.6
%
3.4
%
26.0
%
* Refer to the Specified Items schedules for further details.
BRISTOL-MYERS SQUIBB COMPANY
RECONCILIATION OF NON-GAAP EPS TO GAAP EPS
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011
(Unaudited, amounts in millions except per share data)
Three Months Ended March 31,
2012
2011
Net Earnings Attributable to BMS - GAAP
$
1,101
$
986
Earnings attributable to unvested restricted shares
(1
)
(2
)
Net Earnings used for Diluted EPS Calculation - GAAP
$
1,100
$
984
Net Earnings Attributable to BMS - GAAP
$
1,101
$
986
Less Specified Items*
(7
)
14
Net Earnings - Non-GAAP
1,094
1,000
Earnings attributable to unvested restricted shares
(1
)
(2
)
Net Earnings used for Diluted EPS Calculation - Non-GAAP
$
1,093
$
998
Average Common Shares Outstanding - Diluted
1,706
1,714
Diluted EPS - GAAP
$
0.64
$
0.57
Diluted EPS Attributable to Specified Items
--
0.01
Diluted EPS - Non-GAAP
$
0.64
$
0.58
* Refer to the Specified Items schedules for further details.
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