On July 25, 2019 Bristol-Myers Squibb Company (NYSE:BMY) reported results for the second quarter of 2019, which were highlighted by strong sales for Eliquis (apixaban) and Opdivo (nivolumab) and a robust operating performance across the portfolio (Press release, Bristol-Myers Squibb, JUL 25, 2019, View Source [SID1234537759]).
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"We had a very good second quarter where we delivered strong financial results while also advancing our integration planning for the acquisition of Celgene," said Giovanni Caforio, M.D., chairman and chief executive officer, Bristol-Myers Squibb. "Through strong commercial execution and financial discipline we are establishing a solid foundation from which we can build the leading biopharma company, well-positioned to address the unmet needs of our patients and create long-term shareholder value."
SECOND QUARTER FINANCIAL RESULTS
Bristol-Myers Squibb posted second quarter 2019 revenues of $6.3 billion, an increase of 10% compared to the same period a year ago. Revenues increased 13% when adjusted for foreign exchange impact.
U.S. revenues increased 14% to $3.7 billion in the quarter compared to the same period a year ago. International revenues increased 5%. When adjusted for foreign exchange impact, international revenues increased 12%.
Gross margin as a percentage of revenue decreased from 71.5% to 68.2% in the quarter primarily due to product mix and a $109 million impairment charge in connection with the expected sale of manufacturing and packaging operations in Anagni, Italy.
Marketing, selling and administrative expenses decreased 5% to $1.1 billion in the quarter.
Research and development expenses decreased 45% to $1.3 billion in the quarter primarily due to a $1.1 billion charge resulting from the Nektar collaboration in the second quarter last year.
The effective tax rate was 19.0% in the quarter, compared to 26.1% in the second quarter last year. The lower tax rate was due to a non-deductible equity investment loss in the second quarter last year.
The company reported net earnings attributable to Bristol-Myers Squibb of $1.4 billion, or $0.87 per share, in the second quarter, compared to net earnings of $373 million, or $0.23 per share, for the same period in 2018. The results for the second quarter of 2019 include $409 million of Celgene-related acquisition and integration expenses.
The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.9 billion, or $1.18 per share, in the second quarter, compared to net earnings of $1.6 billion, or $1.01 per share, for the same period in 2018. An overview of specified items is discussed under the "Use of Non-GAAP Financial Information" section.
Cash, cash equivalents and marketable securities were $30.4 billion as of June 30, 2019, which includes $18.8 billion of net proceeds from the issuance of new notes in May 2019. The net cash position was $5.4 billion as of June 30, 2019.
ACQUISITION OF CELGENE CORPORATION
In June, the company announced plans to divest OTEZLA in light of concerns expressed by the U.S. Federal Trade Commission. The company expects to close the Celgene transaction by the end of 2019 or beginning of 2020. (link)
In June, the company announced the future leadership team of the combined company effective upon completion of the company’s pending acquisition of Celgene. (link)
OTEZLA is a trademark of Celgene Corporation.
SECOND QUARTER PRODUCT AND PIPELINE UPDATE
Product Sales/Business Highlights
Global revenues for the second quarter of 2019, compared to the second quarter of 2018, were driven by:
Eliquis, which grew by $392 million or 24% increase
Opdivo, which grew by $196 million or 12% increase
Orencia, which grew by 9%
Sprycel, which grew by 2%
Yervoy, which grew by 17%
Opdivo
Clinical
In July, the company announced Part 1a of the Phase 3 Checkmate -227 study evaluating Opdivo plus low dose Yervoy vs. chemotherapy met the co-primary endpoint of overall survival in first-line non-small cell lung cancer (NSCLC) patients whose tumors express PD-L1 ≥1%. (link)
In July, the company announced Part 2 of the Phase 3 Checkmate -227 study evaluating Opdivo plus chemotherapy versus chemotherapy did not meet its primary endpoint of overall survival in first-line non-squamous NSCLC patients regardless of PD-L1 status. (link)
In June, the company announced results of the Phase 3 Checkmate -459 study evaluating Opdivo versus sorafenib as a first-line treatment in patients with unresectable hepatocellular carcinoma (HCC). (link)
In June, at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting 2019, the company announced important new data and analysis from three studies evaluating Opdivo as monotherapy and in combination with Yervoy (ipilimumab):
Checkmate -040: Results from the Phase 1/2 study evaluating Opdivo plus Yervoy in patients with advanced HCC previously treated with sorafenib. (link)
CA209-004: Results from the Phase 1 study evaluating Opdivo plus Yervoy in patients with previously treated or untreated advanced melanoma. (link)
Checkmate -067: Results from the Phase 3 study evaluating patient reported quality of life during extended therapy and following the discontinuation of therapy with Opdivo or Opdivo plus Yervoy in patients with previously untreated unresectable or metastatic melanoma. (link)
In May, the company announced results of the Phase 3 CheckMate -498 trial evaluating Opdivo plus radiation versus temozolomide plus radiation in patients with newly diagnosed O6-methylguanine-DNA methyltransferase-unmethylated glioblastoma multiforme. (link)
Orencia
Clinical
In June, at the Annual European Congress of Rheumatology, the company announced results from the Phase 4 mechanistic study exploring differences in the cellular and molecular mechanisms by which Orencia (abatacept) and adalimumab interfere with disease progression in moderate-to-severe early rheumatoid arthritis patients seropositive for certain autoantibodies. (link)
Empliciti
Clinical
In June, at the Congress of the European Hematology Association (EHA) (Free EHA Whitepaper), the company announced results from the Phase 2 study evaluating Empliciti (elotuzumab) plus pomalidomide and dexamethasone versus pomalidomide and dexamethasone alone in patients with relapsed or refractory multiple myeloma. (link)
SECOND QUARTER BUSINESS DEVELOPMENT UPDATE
In July, the company, Bayer and Ono Pharmaceutical Co., Ltd. announced a clinical trial collaboration to evaluate Opdivo in combination with Bayer’s Stivarga in patients with micro-satellite stable metastatic colorectal cancer.
In July, the company announced the completion of its previously announced sale of its consumer health business, UPSA, to Taisho Pharmaceutical Co., Ltd.
In June, the company announced Catalent, Inc. has agreed to purchase its oral solid, biologics, and sterile product manufacturing and packaging facility in Anagni, Italy.
Stivarga is a trademark of Bayer.
2019 FINANCIAL GUIDANCE
Bristol-Myers Squibb is decreasing its 2019 GAAP EPS guidance range from $3.84 – $3.94 to $3.73- $3.83 and increasing its non-GAAP EPS guidance range from $4.10 – $4.20 to $4.20 – $4.30. Both GAAP and non-GAAP guidance assume current exchange rates. Key revised 2019 GAAP and non-GAAP line-item guidance assumptions are:
Research and development expenses decreasing in the low-double digits for GAAP and increasing in the mid-single digits for non-GAAP.
The financial guidance for 2019 excludes the impact of any potential future strategic acquisitions and divestitures, including any impact of the pending Celgene acquisition other than expenses incurred in 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.
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, interest expense on the new notes issued in May 2019 in connection with our pending acquisition of Celgene and interest income earned on the net proceeds of the notes 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 pending acquisition of Celgene, please visit View Source
There will be a conference call on July 25, 2019 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 View Source or by calling the U.S. toll free 888-254-3590 or international 323-994-2093, confirmation code: 9333832. 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 11:45 a.m. ET on July 25, 2019 through 11:45 a.m. ET on August 8, 2019. The replay will also be available through View Source or by calling the U.S. toll free 888-203-1112 or international 719-457-0820, confirmation code: 9333832.
Website Information
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