On February 4, 2022 Bristol Myers Squibb (NYSE:BMY) today reports results for the fourth quarter and full year of 2021, which reflect strong sales driven by robust commercial execution and significant advancement of the company’s pipeline that further progressed the company’s portfolio renewal.
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"I am proud of how our company performed in 2021, helping more patients across our therapeutic areas, while achieving 9% revenue and 17% non-GAAP EPS growth, respectively," said Giovanni Caforio, M.D., board chair and chief executive officer, Bristol Myers Squibb. "2021 was a pivotal year for our company as we achieved significant regulatory and clinical milestones and positioned the company to successfully renew our portfolio. I am confident in our ability to execute against our key milestones in 2022, including three planned first-in-class launches with relatlimab plus nivolumab fixed dose combination, mavacamten and deucravacitinib. Our financial strength, dedicated workforce and proven ability to execute will enable us to continue to advance our pipeline, invest in future sources of innovation and position the company for sustained growth."
FOURTH QUARTER FINANCIAL RESULTS
All comparisons are made versus the same period in 2020 unless otherwise stated.
Bristol Myers Squibb posted fourth quarter revenues of $12.0 billion, an increase of 8%, driven by Eliquis,our Immuno-Oncology and new product portfolios.
U.S. revenues increased 11% to $7.5 billion in the quarter. International revenues increased 4% to $4.5 billion in the quarter. When adjusted for foreign exchange impact, international revenues increased 7%.
Gross margin increased from 73.7% to 80.3% in the quarter primarily due to an impairment charge related to marketed product rights in the same period a year ago and lower unwinding of inventory purchase price accounting adjustments.
On a non-GAAP basis, gross margin increased from 79.8% to 80.3% in the quarter primarily driven by foreign exchange and lower royalties.
Marketing, selling and administrative expenses decreased 13% to $2.4 billion in the quarter primarily due to cash settlement of MyoKardia unvested stock awards in the prior year, and certain incremental and accelerated investments to support our business in 2020, partially offset by investments to support new product launches.
On a non-GAAP basis, marketing, selling and administrative expenses decreased 5% in the quarter primarily due to certain incremental and accelerated investments to support our business in 2020, partially offset by investments to support new product launches.
Research and development expenses decreased 30% to $2.6 billion in the quarter. The same period a year ago included license and acquisition charges related to Dragonfly, an in-process research and development (IPR&D) impairment charge and cash settlement of MyoKardia unvested stock awards.
On a non-GAAP basis, research and development expenses increased 3% to $2.6 billion in the quarter primarily due to higher costs related to investments in the overall portfolio.
Amortization of acquired intangible assets decreased 4% to $2.4 billion in the quarter primarily due to an extended marketed product rights exclusivity period.
The effective tax benefit rate was 27.7% in the quarter. Income tax benefit was approximately $510 million despite pre-tax earnings of $1.9 billion in the quarter primarily due to the impact of internal transfers of certain intangible assets of $1.0 billion.
On a non-GAAP basis, the effective tax rate decreased 0.5% to 15.0% in the quarter primarily due to earnings mix.
The company reported net earnings attributable to Bristol Myers Squibb of $2.4 billion, or $1.07 per share, in the fourth quarter, compared to net loss of $10.0 billion, or $(4.45) per share, for the same period a year ago. In addition to the items discussed above, the results in the same period a year ago included an IPR&D charge related to the MyoKardia asset acquisition of $11.4 billion and the impact of fair value adjustments on equity investments and contingent value rights in both periods.
The company reported non-GAAP net earnings attributable to Bristol Myers Squibb of $4.1 billion, or $1.83 per share, in the fourth quarter, compared to non-GAAP net earnings of $3.3 billion, or $1.46 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.
*In excess of +100%.
** Included as part of the new product portfolio
***Included as part of the key loss of exclusivity (LOE) brands
*In excess of +100%.
**Included as part of the new product portfolio
***Included as part of the key loss of exclusivity (LOE) brands
FOURTH QUARTER PRODUCT AND PIPELINE UPDATE
Cardiovascular
mavacamten
Regulatory
In November, the company announced that the U.S. Food and Drug Administration (FDA) has extended the review of the New Drug Application (NDA) for mavacamten for the treatment of patients with symptomatic obstructive hypertrophic cardiomyopathy to April 28, 2022. The extension will allow sufficient time to review information pertaining to updates of the proposed Risk Evaluation Mitigation Strategy (REMS). A REMS program was included in the initial application for mavacamten. No additional data or studies have been requested. (link)
Cardiovascular Portfolio
Medical Meetings
In November, the company presented new data from across its cardiovascular portfolio (link) at the American Heart Association’s (AHA) annual Scientific Sessions, including results from: the:
Phase 2 AXIOMATIC-TKR trial that showed milvexian reduced the risk of postoperative venous thromboembolism in a dose dependent manner without increasing the risk of bleeding compared with enoxaparin in patients undergoing total knee replacement surgery. The study was conducted by The Bristol Myers Squibb-Janssen Collaboration. (link)
Oncology
Opdivo
Clinical
In November, the company announced that the Phase 3 CheckMate -816 trial met the co-primary endpoint of improved event-free survival (EFS) in patients with resectable Stage IB to IIIA non-small cell lung cancer. In a prespecified interim analysis, Opdivo(nivolumab) plus chemotherapy showed a statistically significant and clinically meaningful improvement in EFS compared to chemotherapy alone when given before surgery. This combination previously showed a significant improvement of pathologic complete response, the trial’s other primary endpoint. (link)
Hematology
Breyanzi
Regulatory
In January, the company announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has recommended approval of Breyanzi (lisocabtagene maraleucel) for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma, primary mediastinal large B-cell lymphoma, and follicular lymphoma grade 3B after at least two prior therapies. The recommendation is based on results from TRANSCEND NHL 001 and data from the TRANSCEND WORLD study. (link)
Reblozyl
Regulatory
In December, the company announced two regulatory applications for Reblozyl (luspatercept-aamt) have been accepted. The FDA has accepted for priority review the supplemental Biologics License Application (sBLA) for Reblozyl for the treatment of anemia in adults with non-transfusion dependent (NTD) beta thalassemia. The FDA has set a PDUFA goal date of March 27, 2022. The EMA also validated the Type II variation for Reblozyl for NTD beta thalassemia. The applications are based on results from the Phase 2 BEYOND trial. (link)
Hematology Portfolio
Medical Meetings
In December, the company announced new data and analyses from across its hematology portfolio (link) that were presented at the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting, including results from the:
Phase 3 TRANSFORM trial, which showed Breyanzisignificantly improved EFS compared to chemotherapy plus autologous stem cell transplant as second line treatment in adults with relapsed or refractory large B-cell lymphoma. (link)
Immunology
Orencia
Regulatory
In December, the company announced that Orencia (abatacept) was approved by the FDA for the prophylaxis, or prevention, of acute graft versus host disease, in combination with a calcineurin inhibitor and methotrexate, in patients 2 years of age and older undergoing hematopoietic stem cell transplantation from a matched or 1 allele-mismatched unrelated donor. The approval is based on results from the Phase 2 GVHD-1 trial, also known as ABA2, and a non-interventional (observational) study known as GVHD-2. (link)
Zeposia
Regulatory
In November, the company announced that the European Commission (EC) approved Zeposia (ozanimod) for the treatment of adults with moderately to severely active ulcerative colitis who have had an inadequate response, lost response, or were intolerant to either conventional therapy or a biologic agent. The EC’s decision is based on results from the Phase 3 True North trial. (link)
deucravacitinib
Regulatory
In November, the company announced three regulatory applications for deucravacitinib have been accepted for review. The FDA has accepted the NDA and the EMA has validated the Marketing Authorization Application for deucravacitinib for the treatment of adults with moderate to severe plaque psoriasis. The FDA has assigned a PDUFA goal date of September 10, 2022. Japan’s Ministry of Health, Labour and Welfare also accepted the NDA for deucravacitinib for the treatment of adults with moderate to severe plaque psoriasis, pustular psoriasis and erythrodermic psoriasis. The applications are based on the Phase 3 POETYK PSO-1 and POETYK PSO-2 trials. (link)
Environmental, Social & Governance (ESG)
In December, the company issued its 2021 Global Access Report that detailed Bristol Myers Squibb’s efforts and progress towards advancing access to healthcare and health equity globally through its own efforts and in partnership with other stakeholders. (link)
Business Development
In January, the company and Century Therapeutics (NASDAQ: IPSC) announced a research collaboration and license agreement to develop and commercialize up to four induced pluripotent stem cell derived, engineered natural killer cell and / or T cell programs for hematologic malignancies and solid tumors. (link)
In December, the company and Immatics N.V. (NASDAQ: IMTX, "Immatics"), announced that they have entered into a license, development and commercialization agreement for Immatics’ TCR Bispecific candidate, IMA401. (link)
Capital Allocation
The company continues to maintain a consistent, balanced approach to capital allocation focused on prioritizing investment for growth through business development along with reducing debt, commitment to dividend growth and share repurchase.
In December, the company announced that its Board of Directors approved an increase in the quarterly dividend and authorized an additional $15 billion, multi-year share repurchase program. (link) As part of that program, in January, the company announced that it plans to execute an accelerated share repurchase agreement during the first quarter of 2022 to repurchase up to $5 billion of Bristol Myers Squibb common stock. (link)
Financial Guidance
Bristol Myers Squibb is introducing its 2022 GAAP EPS guidance range of $3.37 – $3.67 and reaffirming its non-GAAP EPS guidance range of $7.65 – $7.95. Both GAAP and non-GAAP guidance assume current exchange rates. Key 2022 GAAP and non-GAAP line-item guidance assumptions are:
Worldwide revenues are expected to be approximately $47 billion, representing an increase in the low-single digits.
Sales from key loss of exclusivity (LOE) brands, which represent Revlimid and Abraxane (paclitaxel protein-bound particles for injectable suspension) (albumin-bound), are expected to be approximately $10.5 billion. Revlimid sales are expected to be $9.5-$10 billion.
Our Continuing Business, which represents in-line products and new product portfolio, is expected to grow in the low-double digits and contribute approximately $36.5 billion in 2022.
Gross margin is expected to be approximately 78% for GAAP and for non-GAAP.
Operating expenses, consisting of marketing, selling and administrative expenses and research and development expenses, are expected to decrease by approximately 10% for GAAP and be in-line with 2021 levels for non-GAAP.
An effective tax rate of approximately 24% for GAAP and approximately 16.5% for non-GAAP.
The 2022 financial guidance excludes the impact of any potential future strategic acquisitions and divestitures, and any specified items that have not yet been identified and quantified. The 2022 non-GAAP EPS guidance is further explained under "Use of Non-GAAP Financial Information." The financial guidance is subject to risks and uncertainties applicable to all forward-looking statements as described elsewhere in this press release.
Reaffirms Long-Term Financial Targets
Bristol Myers Squibb is also reaffirming its previously communicated 2020-2025 long-term targets:
Expects low- to mid-single digit revenue CAGR and low double-digit revenue CAGR for our Continuing Businessat constant exchange rates
Expects to maintain low- to mid-40s percent non-GAAP operating margin
Expects significant free cash flow generation of $45-$50 billion dollars from 2022-2024
This financial guidance excludes the impact of any potential future strategic acquisitions and divestitures as well as any specified items as discussed under "Use of Non-GAAP Financial Information." There is no reliable or reasonably estimable comparable GAAP measures for this non-GAAP financial guidance. 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 February 4, 2022 at 8 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 using this link which becomes active 15 minutes prior to the scheduled start time and entering your information to be connected.
Investors and the public can also access the live webcast by dialing in the U.S. toll free 877-502-9276 or international +1 313-209-4906, confirmation code: 2150568. Materials related to the call will be available at the same website prior to the conference call.
A replay of the webcast will be available on View Source approximately three hours after the conference call concludes. A replay of the conference call will be available beginning at 11:30 a.m. ET on February 4 through 11:30 a.m. ET on February 18, 2022 by dialing in the U.S. toll free 888-203-1112 or international +1 719-457-0820, confirmation code: 2150568.
Corporatefinancial-news
Use of Non-GAAP Financial Information
In discussing financial results and guidance, the company refers to financial measures that are not in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The non-GAAP financial measures are provided as supplemental information to the financial measures presented in this press release that are calculated and presented in accordance with GAAP and are presented because management has evaluated the company’s financial results both including and excluding the adjusted items or the effects of foreign currency translation, as applicable, and believes that the non-GAAP financial measures presented 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 trends and facilitate comparisons among current, past and future periods. 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. In addition, non-GAAP gross margin, which is gross profit excluding certain specified items as a percentage of revenues, non-GAAP operating margin, which is operating income excluding certain specified items as a percentage of revenues; non-GAAP free cash flow, which is non-GAAP net earnings plus adjustments related to cash generated from operating activities and cash paid for capital expenditures; non-GAAP marketing, selling and administrative expenses, which is marketing, selling and administrative expense excluding certain specified items, and non-GAAP research and development expenses, which is research and development expenses excluding certain specified items, are relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by our management and make it easier for investors, analysts and peers to compare our operating performance to other companies in our industry and to compare our year-over-year results.
This earnings release and the accompanying tables also provide certain revenues and expenses as well as non-GAAP measures excluding the impact of foreign exchange. We calculate foreign exchange impacts by converting our current-period local currency financial results using the prior period average currency rates and comparing these adjusted amounts to our current-period results.
Non-GAAP financial measures such as non-GAAP earnings and related EPS information are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis 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 past or future operating results. These items are excluded from non-GAAP earnings and related EPS information because the company believes they neither relate to the ordinary course of the company’s business nor reflect the company’s underlying business performance. Similar charges or gains were recognized in prior periods and will likely reoccur in future periods, including amortization of acquired intangible assets, including product rights that generate a significant portion of our ongoing revenue and will recur until the intangible assets are fully amortized, unwind of inventory purchase price 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 up-front or contingent milestone payments in connection with the acquisition or licensing of third-party intellectual property rights, divestiture gains or losses, stock compensation resulting from accelerated vesting of Celgene awards, certain retention-related employee compensation charges related to the Celgene transaction, pension, legal and other contractual settlement charges, equity investment and contingent value rights fair value adjustments (including fair value adjustments attributed to limited partnership equity method investments beginning in 2021) and amortization of fair value adjustments of debt acquired from Celgene in our 2019 exchange offer, among other items. Certain other significant tax items are also excluded such as the impact resulting from internal transfers due to streamlining our legal entity structure subsequent to the Celgene acquisition and the global intangible low taxed income tax change upon finalization of the Otezla* divestiture in 2020. 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.
Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related financial measures presented in the press release that are 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. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
Reconciliations of the non-GAAP financial measures to the most comparable GAAP measures are provided in the accompanying financial tables and also available on the company’s website at www.bms.com. Within the attached financial tables presented, certain columns and rows may not add due to the use of rounded numbers. Percentages and earnings per share amounts presented are calculated from the underlying amounts.
Also note that a reconciliation of the forward-looking revenue (ex-FX), free cash flow and non-GAAP operating margin measures is not provided due to the inherent difficulty in forecasting and quantifying items that are necessary for such reconciliation. Namely, we are not able to reliably predict the impact of specified items or currency exchange rates beyond the next twelve months. As a result, the reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is not available without unreasonable effort. In addition, the company believes such a reconciliation would imply a degree of precision and certainty that could be confusing to investors. The variability of the specified items may have a significant and unpredictable impact on our future GAAP results.
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.