Bristol Myers Squibb Reports Third Quarter 2020 Financial Results
November 5, 2020- Reports Third Quarter Revenues of $10.5 Billion
- Posts GAAP EPS of $0.82 and Non-GAAP EPS of $1.63
- Extends and Strengthens Leading Cardiovascular Franchise with Planned MyoKardia Acquisition
- Delivers Significant Pipeline and Regulatory Milestones
- Achieves Positive Results from POETYK-PSO-1 Evaluating Deucravacitinib (TYK2 inhibitor) for the Treatment of Moderate to Severe Plaque Psoriasis
- Raises 2020 GAAP and Non-GAAP EPS Guidance; Reaffirms 2021 Non-GAAP EPS Guidance
NEW YORK–(BUSINESS WIRE)–$BMY—Bristol Myers Squibb (NYSE:BMY) today reports results for the third quarter of 2020, which reflect strong product sales, continued pipeline advancement and robust operating performance.
“I am proud of the significant achievements of our new company over the past year, and the strong foundation we have created for near- and long-term growth” said Giovanni Caforio, M.D., board chair and chief executive officer, Bristol Myers Squibb. “Our financial strength and flexibility combined with our robust inline businesses, multiple launches and progress in our deep pipeline, including the promising results from the deucravacitinib trial, strongly position the company to deliver our mission and help more patients. The strength of our third quarter performance is a testament to the commitment of our people who continue to innovate and deliver novel medicines for patients with serious disease.”
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Third Quarter |
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$ amounts in millions, except per share amounts |
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|
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2020 |
2019 |
Change |
|
Total Revenues |
$10,540 |
$6,007 |
75% |
|
GAAP Diluted EPS |
0.82 |
0.83 |
(1)% |
|
Non-GAAP Diluted EPS |
1.63 |
1.17 |
39% |
|
Total Pro Forma Revenues* |
10,540 |
9,962 |
6% |
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|
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*The pro forma revenues assume the company’s acquisition of Celgene (Celgene Acquisition) and its divestiture of Otezla® to Amgen Inc. (Otezla® Divestiture) occurred on January 1, 2019 and exclude foreign currency hedge gains and losses. Management believes that measuring revenue rates on a comparable pro forma basis is an appropriate way for investors to best understand the underlying performance of the business. The pro forma revenue is presented for informational purposes only and does not purport to represent what the company’s results of operations or financial position would have been if the company’s planned acquisition of MyoKardia, Inc. (MyoKardia) occurred on January 1, 2019 nor does it purport to project the results of operations or financial position for any future period or as of any future date. See “Worldwide Pro Forma Revenue” in Quarterly Package of Financial Information for this quarter, which is available on bms.com/investors/financial-reporting/quarterly-results, for information on the revenue of the company and Celgene on a stand-alone basis for the prior-year period. Otezla® is a trademark of Amgen Inc. |
THIRD QUARTER FINANCIAL RESULTS
All comparisons are made versus the same period in 2019 unless otherwise stated.
- Bristol Myers Squibb posted third quarter revenues of $10.5 billion, an increase of 75% on a reported basis and 6% on a pro forma basis. The increase was driven primarily by the impact of the Celgene Acquisition, which was completed on November 20, 2019.
- U.S. revenues increased 88% to $6.5 billion in the quarter. International revenues increased 58% to $4.0 billion in the quarter. When adjusted for foreign exchange impact, international revenues increased 57%.
- Gross margin as a percentage of revenue increased from 70.2% to 76.3% in the quarter primarily due to product mix, partially offset by the unwinding of inventory purchase price accounting adjustments.
- Marketing, selling and administrative expenses increased 62% to $1.7 billion in the quarter primarily due to $500 million of costs associated with the broader portfolio resulting from the Celgene Acquisition.
- Research and development expenses increased 81% to $2.5 billion in the quarter primarily due to $900 million of costs associated with the broader portfolio resulting from the Celgene Acquisition.
- Amortization of acquired intangible assets was $2.5 billion in the quarter primarily due to the Celgene Acquisition.
- The effective tax rate was 16.8% in the quarter. The effective tax benefit rate was 1.3% in the same period a year ago due to jurisdictional tax rates and other tax impacts attributed to pension settlement charges and the UPSA business divestiture gain.
- The company reported net earnings attributable to Bristol Myers Squibb of $1.9 billion, or $0.82 per share, in the third quarter, compared to net earnings of $1.4 billion, or $0.83 per share, for the same period a year ago. The results in the current quarter include costs and expenses resulting from purchase price accounting, contingent value rights fair value adjustments, equity investment gains and other acquisition and integration expenses.
- The company reported non-GAAP net earnings attributable to Bristol Myers Squibb of $3.7 billion, or $1.63 per share, in the third quarter, compared to non-GAAP net earnings of $1.9 billion, or $1.17 per share, for the same period a year ago. A discussion of the non-GAAP financial measures is included under the “Use of Non-GAAP Financial Information” section.
THIRD QUARTER PRODUCT REVENUE HIGHLIGHTS
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$ amounts in millions |
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Product |
Quarter Ended |
% Change from Quarter |
% Change from Quarter |
|
$3,027 |
N/A* |
10% |
|
|
$2,095 |
9% |
9% |
|
|
$1,780 |
(2)% |
(2)% |
|
|
$826 |
8% |
8% |
|
|
$777 |
N/A* |
17% |
|
|
$544 |
(3)% |
(3)% |
|
|
$446 |
26% |
26% |
|
|
$342 |
N/A* |
8% |
|
|
$96 |
8% |
8% |
|
|
$96 |
N/A* |
N/A |
|
|
$13 |
N/A* |
N/A |
|
|
$2 |
N/A* |
N/A |
|
|
$3 |
N/A* |
N/A |
|
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*Products were acquired as part of the Celgene Acquisition. |
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**Pro forma product revenues assume the Celgene Acquisition and the Otezla® Divestiture occurred on January 1, 2019 and exclude foreign currency hedge gains and losses. Management believes that measuring product revenue rates on a comparable pro forma basis is an appropriate way for investors to best understand the underlying performance of the business. See “Worldwide Pro Forma Revenues” in the Quarterly Package of Financial Information for this quarter, which is available on bms.com/investors/financial-reporting/quarterly-results, for information on the product revenue of the company and Celgene for the prior-year period. Otezla® is a registered trademark of Amgen, Inc. |
FIRST NINE-MONTHS PRODUCT REVENUE HIGHLIGHTS
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$ amounts in millions |
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Product |
Nine Months Ended |
% Change from Nine |
% Change from Nine |
|
Revlimid |
$8,826 |
N/A* |
10% |
|
Eliquis |
$6,899 |
17% |
17% |
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Opdivo |
$5,199 |
(4)% |
(4)% |
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Orencia |
$2,290 |
5% |
5% |
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Pomalyst/Imnovid |
$2,235 |
N/A* |
22% |
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Sprycel |
$1,576 |
1% |
1% |
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Yervoy |
$1,211 |
10% |
10% |
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Abraxane |
$950 |
N/A* |
4% |
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Empliciti |
$290 |
10% |
10% |
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Reblozyl |
$159 |
N/A* |
N/A |
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Inrebic |
$40 |
N/A* |
N/A |
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Zeposia |
$3 |
N/A* |
N/A |
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Onureg |
$3 |
N/A* |
N/A |
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*Products were acquired as part of the Celgene Acquisition. |
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**Pro forma product revenues assume the Celgene Acquisition and the Otezla® Divestiture occurred on January 1, 2019 and exclude foreign currency hedge gains and losses. Management believes that measuring product revenue rates on a comparable pro forma basis is an appropriate way for investors to best understand the underlying performance of the business. See “Worldwide Pro Forma Revenues” in the Quarterly Package of Financial Information for this quarter, which is available on bms.com/investors/financial-reporting/quarterly-results, for information on the product revenue of the company and Celgene for the prior-year period. |
THIRD QUARTER PRODUCT AND PIPELINE UPDATE
Oncology and Hematology
Opdivo
Regulatory
- In October, the company and Exelixis, Inc.(NASDAQ: EXEL) announced the U.S. Food and Drug Administration (FDA) has accepted the supplemental Biologics License Application (sBLA) and supplemental New Drug Application (sNDA), respectively, for OPDIVO® (nivolumab) in combination with CABOMETYX® (cabozantinib) for patients with advanced renal cell carcinoma (RCC). The U.S. FDA granted Priority Review to both applications and assigned a Prescription Drug User Fee Act (PDUFA) goal date, or target action date, of February 20, 2021. (link)
- In October, the company announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has recommended approval of Opdivo for the treatment of adults with unresectable advanced, recurrent or metastatic esophageal squamous cell carcinoma (ESCC) after prior fluoropyrimidine- and platinum-based combination chemotherapy. (link)
- In October, the company announced the U.S. FDA approval of Opdivo plus Yervoy® (ipilimumab) for the first-line treatment of adult patients with unresectable malignant pleural mesothelioma (MPM). (link)
- In September, the company announced CHMP of the EMA recommended approval of Opdivo plus Yervoy with two cycles of platinum-based chemotherapy for the first-line treatment of metastatic non-small cell lung cancer (NSCLC) in adults whose tumors have no sensitizing EGFR mutation or ALK translocation. (link)
- In September, the company announced that the EMA validated a type II variation application for Opdivo plus Yervoy for the treatment of patients with previously untreated, unresectable MPM. (link)
Clinical
- In October, the company announced that the Phase 3 CheckMate -816 trial met its primary endpoint of pathologic complete response (pCR) in resectable NSCLC. (link)
- In October, the company announce that CheckMate -915, a randomized Phase 3 study evaluating Opdivo plus Yervoy versus Opdivo for patients who have had a complete surgical removal of stage IIIb/c/d or stage IV melanoma, did not reach statistical significance for the co-primary endpoint of recurrence-free survival in the all-comer (intent-to-treat) population. (link)
- In September, the company announced that CheckMate -274, a Phase 3 trial evaluating Opdivo after surgery in patients with high-risk, muscle invasive urothelial carcinoma, met its primary endpoints in an interim analysis. (link)
- In August, the company announced that CheckMate -577, a Phase 3 trial evaluating Opdivo as an adjuvant therapy for patients with resected esophageal or GEJ cancer, met its primary endpoint of disease-free survival. (link)
- In August the company announced that CheckMate -649, a Phase 3 trial evaluating Opdivo plus chemotherapy compared to chemotherapy alone as a first-line treatment for metastatic gastric cancer, GEJ cancer or esophageal adenocarcinoma, met both primary endpoints of overall survival (OS) at a pre-specified interim analysis and progression-free survival (PFS) at final analysis. (link)
Medical Conferences
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In September, at the European Society for Medical Oncology (ESMO) Virtual Congress 2020, the company announced important new data and analysis across its oncology portfolio (link), including:
- First results from the Phase 3 CheckMate -577 trial evaluating Opdivo as an adjuvant treatment versus placebo in patients with esophageal or gastroesophageal junction (GEJ) cancer following neoadjuvant chemoradiation therapy (CRT) and tumor resection. (link)
- Primary results from CheckMate -649, a Phase 3 trial evaluating Opdivo plus chemotherapy as a first-line treatment in patients with unresectable advanced or metastatic gastric cancer, GEJ cancer or esophageal adenocarcinoma compared to treatment with chemotherapy alone. (link)
- First presentation of detailed results from the Phase 3 CheckMate -9ER trial evaluating Opdivo in combination with CABOMETYX® (cabozantinib) in patients with previously untreated advanced RCC. (link)
- Four-year follow-up results from the Phase 3 CheckMate -214 clinical trial comparing Opdivo plus Yervoy to sunitinib in the treatment of advanced RCC. (link)
- In August, during the 2020 World Conference on Lung Cancer Virtual Presidential Symposium, the company announced results from the Phase 3 CheckMate -743 trial, evaluating OS with Opdivo plus Yervoy in patients with previously untreated, unresectable malignant pleural mesothelioma. ( link)
REVLIMID®
Patent Update
- In September, the company announced that its wholly owned subsidiary, Celgene, and Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. settled their litigation related to patents for REVLIMID (lenalidomide). (link)
Onureg
Regulatory
- In September, the company announced that the U.S. FDA approved Onureg® (azacitidine 300 mg tablets, CC-486) for the treatment of adult patients with acute myeloid leukemia (AML) who achieved first complete remission (CR) or CR with incomplete blood count recovery (CRi) following intensive induction chemotherapy and who are not able to complete intensive curative therapy. (link)
ide-cel
Regulatory
- In September, the company and bluebird bio, Inc. (Nasdaq: BLUE) announced that the U.S. FDA has accepted for Priority Review the Biologics License Application (BLA) for idecabtagene vicleucel (ide-cel; bb2121), the companies’ investigational B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR) T cell immunotherapy, for the treatment of adult patients with multiple myeloma who have received at least three prior therapies, including an immunomodulatory agent, a proteasome inhibitor and an anti-CD38 antibody. The U.S. FDA has set a PDUFA goal date of March 27, 2021. (link)
IDHIFA®
Clinical
- In August, the company announced that the Phase 3 IDHENTIFY study evaluating IDHIFA (enasidenib) plus best supportive care (BSC) versus conventional care regimens, which include BSC only, azacitidine plus BSC, low-dose cytarabine plus BSC or intermediate-dose cytarabine plus BSC, did not meet the primary endpoint of OS in patients with relapsed or refractory acute myeloid leukemia (R/R AML) with an isocitrate dehydrogenase-2 (IDH2) mutation. (link)
Immunology
Deucravacitinib (BMS-986165)
Clinical
- In November, the company announced positive results from the POETYK PSO-1 trial evaluating deucravacitinib, a novel, oral, selective tyrosine kinase 2 (TYK2) inhibitor, for the treatment of patients with moderate to severe plaque psoriasis. POETYK-PSO-1 met both co-primary endpoints evaluating deucravacitinib versus placebo on the Psoriasis Area and Severity Index (PASI 75) and Physician Global Assessment (sPGA) scales and met multiple key secondary endpoints versus Otezla® (apremilast). (link)
Zeposia
Medical Conferences
- In October, at United European Gastroenterology (UEG) Week Virtual 2020, the company announced results from the Phase 3 True North trial evaluating Zeposia in patients with moderate to severe ulcerative colitis. (link)
- In September, at the MSVirtual2020: 8th Joint ACTRIMS-ECTRIMS Meeting, the company announced interim results from the Phase 3 open-label extension trial DAYBREAK, demonstrating the long-term efficacy and safety profile of Zeposia in patients with relapsing forms of multiple sclerosis (MS). (link)
Business Development
- In November, the company and MyoKardia, Inc. (Nasdaq: MYOK) announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in connection with Bristol Myers Squibb’s previously announced tender offer to acquire all outstanding shares of MyoKardia for a purchase price of $225.00 per share in cash, or approximately $13.1 billion. (link)
- In October, the company and MyoKardia, Inc. (Nasdaq: MYOK) announced they have entered into a definitive merger agreement under which Bristol Myers Squibb will acquire MyoKardia for $13.1 billion, or $225 per share in cash. (link)
- In September, the company announced it has successfully completed its transaction to acquire Forbius for their TGF-beta program, including its lead investigational asset AVID200, currently in Phase 1 studies for oncology and fibrosis. (link)
- In August, the company announced that it entered into a definitive agreement with Dragonfly Therapeutics, Inc. (“Dragonfly”) under which Bristol Myers Squibb will be granted the global exclusive license to Dragonfly’s interleukin-12 (IL-12) investigational immunotherapy program, including its extended half-life cytokine DF6002. (link)
Commitment to Diversity and Inclusion
In August, the company and the Bristol Myers Squibb Foundation announced a combined investment of $300 million as part of a series of commitments designed to address health disparities, increase clinical trial diversity and increase the company’s spend with diverse suppliers. The company also announced that it will expand the diversity of its workforce and leadership by doubling Black/African American and Hispanic/Latino representation at executive levels of the company by 2022. (link)
COVID-19 Pandemic Response
During the current world health crisis, the company continues to take all necessary actions to promote public health by carrying out its mission of providing life-saving medicines to the patients who depend on the company and supporting relief efforts across the globe. (link)
- In October, the company and 18 organizations from the healthcare industry created the COVID-19 Testing Industry Consortium with the goal to help inform, improve, innovate and accelerate various aspects of testing, ranging from research to clinical diagnostic applications. (link)
Financial Guidance
Bristol Myers Squibb is increasing its 2020 GAAP EPS guidance range from ($0.06) – $0.09 to $0.47 – $0.57. In addition, the company is raising its 2020 non-GAAP EPS guidance range from $6.10 – $6.25 to $6.25 – $6.35 and reaffirming its 2021 non-GAAP EPS guidance range of $7.15 to $7.45. Adjusted 2020 GAAP and non-GAAP line items are:
|
|
GAAP |
non-GAAP |
|
Revenue |
$41.5B – $42.0B |
$41.5B – $42.0B |
|
Gross margin as a percentage of revenue |
Approximately 74% |
Approximately 80% |
|
Marketing, selling and administrative expense |
Approximately $6.9B |
Approximately $6.9B |
|
Research and development expense |
Approximately $10.4B |
Approximately $9.2B |
|
Other (income)/expense, net |
($0.1B) – ($0.3B) |
($0.1B) – $0.1B |
|
Effective tax rate |
Approximately 69% |
Approximately 16% |
|
Weighted average diluted shares |
Approximately 2.3 Billion |
Approximately 2.3 Billion |
|
EPS guidance |
$0.47 – $0.57 |
$6.25 – $6.35 |
The 2020 and 2021 guidance assumes that healthcare systems around the world will continue to adapt, and gradually recover from the impacts from the COVID-19 pandemic.
The 2020 financial guidance excludes the impact of any potential future strategic acquisitions and divestitures, including any impact of the MyoKardia acquisition, and any specified items that have not yet been identified and quantified. The 2020 non-GAAP EPS guidance further excludes other specified items as discussed under “Use of Non-GAAP Financial Information.” A reconciliation of non-GAAP financial measures to the most comparable GAAP measure and the reasons why management believes the use of these measures is important are provided in supplemental materials available on the company’s website. The 2021 non-GAAP EPS guidance incorporates the expected dilution from the MyoKardia acquisition. For the 2021 non-GAAP EPS guidance, there is no reliable or reasonably estimable comparable GAAP measure as discussed below. The financial guidance is subject to risks and uncertainties applicable to all forward-looking statements as described elsewhere in this press release.
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, Facebook, and Instagram.
There will be a conference call on November 5 at 8:30 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 dialing in the U.S. toll free 888-394-8218 or international 786-789-4776, confirmation code: 5151966, or using this link which becomes active 15 minutes prior to the scheduled start time and entering your information to be connected. 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 12:00 p.m. ET on November 5 through 12:00 p.m. ET on November 19, 2020. The replay will also be available through http://investor.bms.com or by dialing in the U.S. toll free 888-203-1112 or international 719-457-0820, confirmation code: 5151966.
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. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available on the company’s website at www.bms.com.
These non-GAAP 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 amortization of acquired intangible assets beginning in the fourth quarter of 2019, including product rights that generate a significant portion of our ongoing revenue, unwind of inventory fair value adjustments, 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 upfront or contingent milestone payments in connection with the acquisition or licensing of third-party intellectual property rights, costs of acquiring a priority review voucher, divestiture gains or losses, stock compensation resulting from accelerated vesting of Celgene awards, certain retention-related employee compensation charges related to the Celgene Acquisition, pension, legal and other contractual settlement charges, interest expense on the notes issued in May 2019 incurred prior to the Celgene Acquisition and interest income earned on the net proceeds of those notes, equity investment and contingent value rights fair value adjustments and amortization of fair value adjustments of debt acquired from Celgene in our 2019 exchange offer, 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. Certain other significant tax items are also excluded such as the impact resulting from internal transfer of intangible assets and the Otezla® Divestiture. This earnings release also provides international revenues excluding the impact of foreign exchange.
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.
Contacts
For more information:
Media: [email protected]
Investor Relations: Tim Power, 609-252-7509, [email protected]; Nina Goworek, 908-673-9711, [email protected].