On April 25, 2019 Bristol-Myers Squibb Company (NYSE:BMY) 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 (Press release, Bristol-Myers Squibb, APR 25, 2019, View Source [SID1234535392]).
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"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 FINANCIAL RESULTS
Bristol-Myers Squibb posted first quarter 2019 revenues of $5.9 billion, an increase of 14% compared to the same period a year ago. Revenues increased 18% when adjusted for foreign exchange impact.
U.S. revenues increased 24% to $3.4 billion in the quarter compared to the same period a year ago. International revenues increased 2%. When adjusted for foreign exchange impact, international revenues increased 10%.
Gross margin as a percentage of revenue decreased from 69.5% to 68.9% in the quarter primarily due to product mix and higher excise tax, partially offset by favorable foreign exchange.
Marketing, selling and administrative expenses increased 3% to $1.0 billion in the quarter.
Research and development expenses increased 8% to $1.4 billion in the quarter.
The effective tax rate was 13.3% in the quarter, compared to 16.0% in the first quarter last year.
The company reported net earnings attributable to Bristol-Myers Squibb of $1.7 billion, or $1.04 per share, in the first quarter, compared to net earnings of $1.5 billion, or $0.91 per share, for the same period in 2018. The results for the first quarter of 2019 include $187 million of Celgene-related acquisition and integration expenses.
The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.8 billion, or $1.10 per share, in the first quarter, compared to net earnings of $1.5 billion, or $0.94 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 $10.0 billion, with a net cash position of $4.0 billion, as of March 31, 2019.
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:
Eliquis , which grew by $419 million or 28% increase
Opdivo , which grew by $290 million or 19% increase
Yervoy , which grew by $135 million or 54% increase
Orencia , which grew by 8%
Sprycel , which grew by 5%
Opdivo
Clinical
The company reported topline results from the Phase 2 CheckMate -714 trial evaluating Opdivo versus Opdivo plus Yervoy (ipilimumab) in patients with recurrent or metastatic squamous cell carcinoma of the head and neck. The study did not meet its primary endpoints.
In April, at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2019, the company announced four-year survival results from pooled analyses of four studies (CheckMate -017, -057, -063 and -003) in patients with previously-treated advanced non-small cell lung cancer who were treated with Opdivo. (link)
In February, at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2019 Genitourinary Cancers Symposium, the company announced new data and analysis from studies evaluating Opdivo plus Yervoy:
CheckMate -650: Results from the Phase 2 study evaluating Opdivo in combination with Yervoy in patients with metastatic castration-resistant prostate cancer. (link)
CheckMate -214: Results from the Phase 3 study evaluating Opdivo plus low-dose Yervoy in patients with previously untreated advanced or metastatic renal cell carcinoma. (link)
Eliquis
Clinical
In March, at the American College of Cardiology’s 68th Annual Scientific Session 2019, the company and its alliance partner Pfizer announced results from the Phase 4 AUGUSTUS trial evaluating Eliquis versus vitamin K antagonists in patients with non-valvular atrial fibrillation and recent acute coronary syndrome and/or undergoing percutaneous coronary intervention. The data was simultaneously published in the New England Journal of Medicine. (link)
Sprycel
Regulatory
In February, the company announced the European Commission approved Sprycel (dasatinib) in combination with chemotherapy for the treatment of pediatric patients with newly diagnosed Philadelphia chromosome-positive acute lymphoblastic leukemia.
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:
Worldwide revenues increasing in the mid-single digits.
Gross margin as a percentage of revenue to be approximately 70% for both GAAP and non-GAAP.
Marketing, selling and administrative expenses decreasing in the mid-single digit range for both GAAP and non-GAAP.
Research and development expenses decreasing in the high-single digits for GAAP and increasing in the high-single digits for non-GAAP.
An effective tax rate of approximately 14% for GAAP and approximately 16% for non-GAAP.
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 View Source
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 View Source 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 View Source or by calling the U.S. toll free 888-254-3590 or international 720-543-0302, confirmation code: 7211894.