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Bristol-Myers Squibb Reports First Quarter Financial Results

BusinessWire

NEW YORK–(BUSINESS WIRE)–lt;a href=”https://twitter.com/search?q=%24BMY&src=ctag” target=”_blank”gt;$BMYlt;/agt;–Bristol-Myers
Squibb Company (NYSE:BMY) today reported results for the first
quarter of 2019 which were highlighted by strong demand for Opdivo
(nivolumab) and Eliquis
(apixaban) and a robust operating performance across the portfolio.

“We had a very good first quarter during which the company remained
focused on delivering strong sales growth of our prioritized brands and
continuing to advance the science in our disease areas of focus,” said Giovanni
Caforio, M.D., chairman and chief executive officer, Bristol-Myers
Squibb. “We also achieved approval from Bristol-Myers Squibb and Celgene
shareholders to move forward with the acquisition. Looking forward, we
are focused on our integration planning with Celgene and creating a
leading biopharma company, with potential first-in- and best-in-class
medicines, to address the unmet needs of our patients and create
long-term substantial growth.”

First Quarter
$ amounts in millions, except per share amounts

2019

2018

Change
Total Revenues $5,920 $5,193 14%
GAAP Diluted EPS 1.04 0.91 14%
Non-GAAP Diluted EPS 1.10 0.94 17%

FIRST QUARTER FINANCIAL RESULTS

ACQUISITION OF CELGENE CORPORATION

In April, the company announced its shareholders voted to approve the
company’s pending acquisition of Celgene Corporation. The company
continues to expect to close the acquisition in the third quarter. (link)

FIRST QUARTER PRODUCT AND PIPELINE UPDATE

Product Sales/Business Highlights

Global revenues for the first quarter of 2019, compared to the first
quarter of 2018, were driven by:

Opdivo

Clinical

Eliquis

Clinical

Sprycel

Regulatory

2019 FINANCIAL GUIDANCE

Bristol-Myers Squibb is increasing its 2019 GAAP EPS guidance range to
$3.84 – $3.94 and confirming its non-GAAP EPS guidance range of $4.10 –
$4.20. Both GAAP and non-GAAP guidance assume current exchange rates.
Key 2019 GAAP and non-GAAP line-item guidance assumptions are:

The financial guidance for 2019 excludes the impact of any potential
future strategic acquisitions and divestitures, including any impact of
the Celgene acquisition other than expenses incurred in the first
quarter of 2019, and any specified items that have not yet been
identified and quantified. The non-GAAP 2019 guidance also excludes
other specified items as discussed under “Use of Non-GAAP Financial
Information.” Details reconciling adjusted non-GAAP amounts with the
amounts reflecting specified items are provided in supplemental
materials available on the company’s website.

Guidance inclusive of the Celgene acquisition will be provided after the
close of the transaction. The company’s previously announced sale of the
UPSA consumer health business to Taisho Pharmaceutical Holdings Co.,
Ltd. for $1.6 billion is anticipated to be completed in July 2019.

Use of Non-GAAP Financial Information

This earnings release contains non-GAAP financial measures, including
non-GAAP earnings and related EPS information, that are adjusted to
exclude certain costs, expenses, gains and losses and other specified
items that are evaluated on an individual basis. These items are
adjusted after considering their quantitative and qualitative aspects
and typically have one or more of the following characteristics, such as
being highly variable, difficult to project, unusual in nature,
significant to the results of a particular period or not indicative of
future operating results. Similar charges or gains were recognized in
prior periods and will likely reoccur in future periods, including
acquisition and integration expenses, restructuring costs, accelerated
depreciation and impairment of property, plant and equipment and
intangible assets, R&D charges or other income resulting from up-front
or contingent milestone payments in connection with the acquisition or
licensing of third-party intellectual property rights, divestiture gains
or losses, pension, legal and other contractual settlement charges and
debt redemption gains or losses, among other items. Deferred and current
income taxes attributed to these items are also adjusted for considering
their individual impact to the overall tax expense, deductibility and
jurisdictional tax rates. Non-GAAP information is intended to portray
the results of the company’s baseline performance, supplement or enhance
management, analysts and investors overall understanding of the
company’s underlying financial performance and facilitate comparisons
among current, past and future periods. For example, non-GAAP earnings
and EPS information is an indication of the company’s baseline
performance before items that are considered by us to not be reflective
of the company’s ongoing results. In addition, this information is among
the primary indicators that we use as a basis for evaluating
performance, allocating resources, setting incentive compensation
targets and planning and forecasting for future periods. This
information is not intended to be considered in isolation or as a
substitute for net earnings or diluted EPS prepared in accordance with
GAAP and may not be the same as or comparable to similarly titled
measures presented by other companies due to possible differences in
method and in the items being adjusted.

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 about
Bristol-Myers Squibb, visit us at BMS.com
or follow us on LinkedIn,
Twitter,
YouTube
and Facebook.
For more information about Bristol-Myers Squibb’s proposed acquisition
of Celgene, please visit https://bestofbiopharma.com.

There will be a conference call on April 25, 2019 at 10:30 a.m. ET
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 webcast of the call at http://investor.bms.com
or by calling the U.S. toll free 888-254-3590 or international
720-543-0302, confirmation code: 7211894. Materials related to the call
will be available at the same website prior to the conference call. A
replay of the call will be available beginning at 1:45 p.m. ET on April
25, 2019 through 1:45 p.m. ET on May 9, 2019. The replay will also be
available through http://investor.bms.com
or by calling the U.S. toll free 888-254-3590 or international
720-543-0302, confirmation code: 7211894.

Website Information

We routinely post important information for investors on our website,
BMS.com, in the “Investors” section. We may use this website as a means
of disclosing material, non-public information and for complying with
our disclosure obligations under Regulation FD. Accordingly, investors
should monitor the Investors section of our website, in addition to
following our press releases, SEC filings, public conference calls,
presentations and webcasts. We may also use social media channels to
communicate with our investors and the public about our company, our
products and other matters, and those communications could be deemed to
be material information. The information contained on, or that may be
accessed through, our website or social media channels are not
incorporated by reference into, and are not a part of, this document.

Cautionary Statement Regarding Forward-Looking
Statements

This earnings release and the related attachments (as well as the oral
statements made with respect to information contained in this release
and the attachments) contains certain “forward-looking” statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, 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 they use words
such as “should,” “could,” “expect,” “anticipate,” “estimate,” “target,”
“may,” “project,” “guidance,” “intend,” “plan,” “believe,” “will” and
other words and terms of similar meaning and expression in connection
with any discussion of future operating or financial performance,
although not all forward-looking statements contain such terms. One can
also identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. These statements are
likely to relate to, among other things, the company’s ability to
execute successfully its strategic plans, including its business
development strategy generally and in relation to its ability to
complete the financing transactions in connection with and to realize
the projected benefits of the company’s pending acquisition of Celgene,
the expiration of patents or data protection on certain products,
including assumptions about the company’s ability to retain patent
exclusivity of certain products and the impact, and result of
governmental investigations. No forward-looking statement can be
guaranteed, including that the company’s future clinical studies will
support the data described in this release, product candidates will
receive necessary clinical and manufacturing regulatory approvals,
pipeline products will prove to be commercially successful, clinical and
manufacturing regulatory approvals will be sought or obtained within
currently expected timeframes or contractual milestones will be achieved.

Such forward-looking statements are based on historical performance and
current expectations and projections about the company’s future
financial results, goals, plans and objectives and involve inherent
risks, assumptions and uncertainties, including internal or external
factors that could delay, divert or change any of them in the next
several years, and could cause the company’s future financial results,
goals, plans and objectives to differ materially from those expressed
in, or implied by, the statements. Such risks, uncertainties and other
matters include, but are not limited to, challenges inherent in new
product development, including obtaining and maintaining regulatory
approval; competitive developments affecting current products;
difficulties and delays in product introduction and commercialization;
industry competition from other manufacturers; the company’s ability to
obtain and protect market exclusivity rights and enforce patents and
other intellectual property rights; the risk of an adverse patent
litigation decision or settlement and exposure to other litigation
and/or regulatory actions; pricing controls and pressures (including
changes in rules and practices of managed care organizations and
institutional and governmental purchasers); the impact of any U.S.
healthcare reform and legislation or regulatory action in the U.S. and
markets outside the U.S. affecting pharmaceutical product pricing,
reimbursement or access; changes in tax law and regulations, including
the impact of the Tax Cuts and Jobs Act of 2017 and related guidance;
any significant issues that may arise related to the company’s joint
ventures and other third-party business arrangements; the company’s
ability to execute its financial, strategic and operational plans or
initiatives; the ability to attract and retain key personnel; the
company’s ability to identify potential strategic acquisitions or
transactions and successfully realize the expected benefits of such
transactions, including with respect to the proposed acquisition of
Celgene; the conditions to closing the Celgene transaction will be
satisfied and, if the transaction closes, the company’s ability to
successfully integrate Celgene, manage the impact of the company’s
increased indebtedness, achieve anticipated synergies and effectively
address any risks that Celgene currently faces, including the loss of
patent protection for any of its commercialized products and the failure
to obtain approvals for its pipeline products; difficulties or delays in
manufacturing, distribution or sale of products, including without
limitation, interruptions caused by damage to the company’s and the
company’s suppliers’ manufacturing sites; regulatory decisions impacting
labeling, manufacturing processes and/or other matters; the impact on
the company’s competitive position from counterfeit or unregistered
versions of its products or stolen products; the adverse impact of
cyber-attacks on the company’s information systems or products,
including unauthorized disclosure of trade secrets or other confidential
data stored in the company’s information systems and networks; political
and financial instability of international economies and sovereign risk;
and issuance of new or revised accounting standards.

Forward-looking statements in this earnings release should be evaluated
together with the many uncertainties that affect the company’s business,
particularly those identified in the cautionary factors discussion in
the company’s Annual Report on Form 10-K for the year ended December 31,
2018, as updated by the company’s subsequent Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and other filings with the Securities
and Exchange Commission. The forward-looking statements included in this
document are made only as of the date of this document and except as
otherwise required by federal securities law, the company undertakes no
obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events, changed
circumstances or otherwise.

BRISTOL-MYERS SQUIBB COMPANY
PRODUCT REVENUE
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(Unaudited, dollars in millions)
Worldwide Revenues U.S. Revenues
2019 2018

%
Change

 2019 2018

%
Change

Three Months Ended March 31,
Prioritized Brands
Opdivo $ 1,801 $ 1,511 19% $ 1,124 $ 938 20%
Eliquis 1,925 1,506 28% 1,206 885 36%
Orencia 640 593 8% 449 385 17%
Sprycel 459 438 5% 240 214 12%
Yervoy 384 249 54% 275 162 70%
Empliciti 83 55 51% 58 37 57%
Established Brands
Baraclude 141 225 (37)% 7 10 (30)%
Other Brands(a) 487 616 (21)% 90 147 (39)%
Total $ 5,920 $ 5,193 14% $ 3,449 $ 2,778 24%
(a) Includes Sustiva, Reyataz, Daklinza and all other products that have
lost exclusivity in major markets, over-the-counter brands and
royalty revenue.
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(Unaudited, dollars and shares in millions except per share data)

Three Months Ended
March 31,
2019 2018
Net product sales $ 5,713 $ 4,972
Alliance and other revenues 207 221
Total Revenues 5,920 5,193
Cost of products sold 1,844 1,584
Marketing, selling and administrative 1,006 980
Research and development 1,351 1,250
Other income (net) (260 ) (400 )
Total Expenses 3,941 3,414
Earnings Before Income Taxes 1,979 1,779
Provision for Income Taxes 264 284
Net Earnings 1,715 1,495
Net Earnings Attributable to Noncontrolling Interest 5 9
Net Earnings Attributable to BMS $ 1,710 $ 1,486
Average Common Shares Outstanding:
Basic 1,634 1,633
Diluted 1,637 1,640
Earnings per Common Share
Basic $ 1.05 $ 0.91
Diluted 1.04 0.91
Other income (net)
Interest expense $ 45 $ 46
Investment income (56 ) (36 )
Equity investment gains (175 ) (15 )
Provision for restructuring 12 20
Acquisition and integration expenses 187 —
Litigation and other settlements 1 —
Equity in net income of affiliates — (24 )
Divestiture gains — (45 )
Royalties and licensing income (308 ) (367 )
Transition and other service fees (2 ) (4 )
Pension and postretirement 44 (11 )
Intangible asset impairment — 64
Other (8 ) (28 )
Other income (net) $ (260 ) $ (400 )
BRISTOL-MYERS SQUIBB COMPANY
SPECIFIED ITEMS
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(Unaudited, dollars in millions)

Three Months Ended
March 31,
2019 2018
Impairment charges $ — $ 10
Accelerated depreciation and other shutdown costs 12 3
Cost of products sold 12 13
Marketing, selling and administrative 1 1
License and asset acquisition charges — 60
IPRD impairments 32 —
Site exit costs and other 19 20
Research and development 51 80
Equity investment gains (175 ) (15 )
Provision for restructuring 12 20
Acquisition and integration expenses 187 —
Divestiture gains — (43 )
Royalties and licensing income — (50 )
Pension and postretirement 49 31
Intangible asset impairment — 64
Other income (net) 73 7
Increase to pretax income 137 101
Income taxes on specified items (43 ) (8 )
Income taxes attributed to U.S. tax reform — (32 )
Income taxes (43 ) (40 )
Increase to net earnings $ 94 $ 61
BRISTOL-MYERS SQUIBB COMPANY
RECONCILIATION OF CERTAIN GAAP LINE ITEMS TO CERTAIN NON-GAAP LINE
ITEMS
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(Unaudited, dollars in millions)
Three Months Ended March 31, 2019
GAAP

Specified
Items(a)

Non-
GAAP
Gross Profit $ 4,076 $ 12 $ 4,088
Marketing, selling and administrative 1,006 (1 ) 1,005
Research and development 1,351 (51 ) 1,300
Other income (net) (260 ) (73 ) (333 )
Earnings Before Income Taxes 1,979 137 2,116
Provision for Income Taxes 264 (43 ) 307
Noncontrolling interest 5 — 5
Net Earnings Attributable to BMS used for Diluted EPS Calculation $ 1,710 $ 94 $ 1,804
Average Common Shares Outstanding – Diluted 1,637 1,637 1,637
Diluted Earnings Per Share $ 1.04 $ 0.06 $ 1.10
Effective Tax Rate 13.3 % 1.2 % 14.5 %
Three Months Ended March 31, 2018
GAAP

Specified
Items(a)

Non-
GAAP
Gross Profit $ 3,609 $ 13 $ 3,622
Marketing, selling and administrative 980 (1 ) 979
Research and development 1,250 (80 ) 1,170
Other income (net) (400 ) (7 ) (407 )
Earnings Before Income Taxes 1,779 101 1,880
Provision for Income Taxes 284 (40 ) 324
Noncontrolling interest 9 — 9
Net Earnings Attributable to BMS used for Diluted EPS Calculation $ 1,486 $ 61 $ 1,547
Average Common Shares Outstanding – Diluted 1,640 1,640 1,640
Diluted Earnings Per Share $ 0.91 $ 0.03 $ 0.94
Effective Tax Rate 16.0 % 1.2 % 17.2 %
(a) Refer to the Specified Items schedule for further details. Effective
tax rate on the Specified Items represents the difference between
the GAAP and Non-GAAP effective tax rate.
BRISTOL-MYERS SQUIBB COMPANY
NET CASH/(DEBT) CALCULATION
AS OF MARCH 31, 2019 AND DECEMBER 31, 2018
(Unaudited, dollars in millions)
March 31, 2019 December 31, 2018
Cash and cash equivalents $ 7,335 $ 6,911
Marketable securities – current 1,429 1,973
Marketable securities – non-current 1,233 1,775
Cash, cash equivalents and marketable securities 9,997 10,659
Short-term debt obligations (381 ) (1,703 )
Long-term debt (5,635 ) (5,646 )
Net cash position $ 3,981 $ 3,310

Contacts

Media:
Priyanka Shah, 609-252-7956, priyanka.shah1@bms.com

Investor Relations:
John Elicker, 609-252-4611, john.elicker@bms.com
or Tim Power, 609-252-7509, timothy.power@bms.com

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