On June 28, 2021 Bristol Myers Squibb (NYSE:BMY) reported that results for the second quarter of 2021, which reflect robust product sales, continued advancement of the pipeline and strong clinical and operational performance across the company (Press release, Bristol-Myers Squibb, JUL 28, 2021, View Source [SID1234585254]).
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"We delivered a strong quarter across each of our four therapeutic areas, including building momentum for our new product portfolio and Opdivo returning to growth," said Giovanni Caforio, M.D., board chair and chief executive officer, Bristol Myers Squibb. "We achieved significant clinical and regulatory milestones reflecting the hard work and dedication of our team, who together have built a portfolio of best-in-class medicines to meet the needs of patients with serious diseases. As we move forward, we remain focused on driving inline product performance, progressing our new launches, and advancing pipeline opportunities. Our robust and diverse pipeline combined with our clinical and commercial execution strengthen our confidence in our ability to renew the portfolio and achieve sustained growth."
All comparisons are made versus the same period in 2020 unless otherwise stated.
Bristol Myers Squibb posted second quarter revenues of $11.7 billion, an increase of 16%, or 13% when adjusted for foreign exchange. Sales in the same period a year ago were negatively impacted by approximately $350 million of COVID-19-related channel inventory work downs.
U.S. revenues increased 14% to $7.4 billion in the quarter. International revenues increased 18% to $4.3 billion in the quarter. When adjusted for foreign exchange impact, international revenues increased 10%.
Gross margin increased from 73.4% to 79.0% in the quarter primarily due to lower unwinding of inventory purchase price accounting adjustments, partially offset by foreign exchange.
On a non-GAAP basis, gross margin decreased from 80.5% to 79.8% in the quarter driven by foreign exchange and product mix.
Marketing, selling and administrative expenses increased 16% to $1.9 billion in the quarter on a GAAP and non-GAAP basis primarily due to higher advertising and promotion expenses, higher costs to support new product launches and lower spending in the prior year due to COVID-19.
Research and development expenses increased 30% to $3.3 billion in the quarter primarily due to higher license and asset acquisition charges and an in-process research and development (IPR&D) impairment charge.
On a non-GAAP basis, research and development expenses increased 4% to $2.3 billion in the quarter primarily due to higher costs associated with the broader portfolio and lower spending in the prior year due to COVID-19.
Amortization of acquired intangible assets increased $158 million to $2.5 billion in the quarter.
The effective tax rate was 31.7% in the quarter. Income taxes were $1.7 billion on pre-tax earnings of $1.6 billion in the same period a year ago primarily due to tax charges resulting from an internal transfer of certain intangible assets and the Otezla divestiture and purchase price adjustments.
On a non-GAAP basis, the effective tax rate increased 3.1% to 16.9% in the quarter primarily driven by earnings mix.
The company reported net earnings attributable to Bristol Myers Squibb of $1.1 billion, or $0.47 per share, in the second quarter, compared to net loss of $85 million, or $0.04 per share, for the same period a year ago.
The company reported non-GAAP net earnings attributable to Bristol Myers Squibb of $4.3 billion, or $1.93 per share, in the second quarter, compared to non-GAAP net earnings of $3.8 billion, or $1.63 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
SECOND QUARTER PRODUCT AND PIPELINE UPDATE
Cardiovascular
mavacamten
Medical Meeting
In May, at the American College of Cardiology’s 70th Annual Scientific Session (ACC.21), the company presented:
New analysis of data from the Phase 3 EXPLORER-HCM study that demonstrated a Health Status Benefit in patients with obstructive hypertrophic cardiomyopathy (oHCM) receiving mavacamten compared to placebo. The data were simultaneously published in The Lancet.(link)
Interim results from MAVA-LTE, an ongoing, dose-blinded five-year extension study of the EXPLORER-HCM Phase 3 trial, which demonstrated that in patients with oHCM, mavacamten was well tolerated and showed durable improvement in left ventricular outflow tract gradients, diastolic function, N-terminal-pro hormone B-type natriuretic peptide and symptoms. (link)
Results from a real-world data analysis measuring the clinical and economic burden of oHCM in the United States, which found the condition is associated with substantial healthcare resource utilization and costs. (link)
Oncology
Opdivo
Regulatory
In June, the company announced that the European Commission (EC) has approved Opdivo(nivolumab) plus Yervoy (ipilimumab) for the treatment of adult patients with mismatch repair deficient or microsatellite instability-high (dMMR/MSI-H) metastatic colorectal cancer (mCRC) after prior fluoropyrimidine-based combination chemotherapy. The EC approval is based on results from the Phase 2 CheckMate -142 study (link). In May, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended approval for this indication (link)
In June, the company announced that the CHMP of the EMA has recommended approval of Opdivo for the adjuvant treatment of adult patients with esophageal or gastroesophageal junction cancer (GEJC) who have residual pathologic disease following prior neoadjuvant chemoradiotherapy (CRT). The recommendation is based on results from the Phase 3 CheckMate -577 study in which Opdivo doubled disease-free survival compared to placebo in the all-randomized population. (link)
In June, the company announced that the EC has approved Opdivo plus Yervoy for the first-line treatment of adults with unresectable malignant pleural mesothelioma (MPM). The EC’s decision is based on results from the CheckMate -743 study, the first and only positive Phase 3 study of an immunotherapy in first-line MPM.(link)
In May, the company announced that the U.S. Food & Drug Administration (FDA) has approved Opdivo for the adjuvant treatment of completely resected esophageal cancer or GEJC with residual pathologic disease in patients who have received neoadjuvant CRT. The FDA approval is based on results from the Phase 3 CheckMate -577 study. (link)
In April, the company announced that the FDA has accepted the supplemental Biologics License Application for Opdivo for the adjuvant treatment of patients with surgically resected, high-risk muscle-invasive urothelial carcinoma, based on results from the Phase 3 CheckMate -274 study. The FDA granted the application Priority Review and assigned a Prescription Drug User Fee Act goal date of September 3, 2021. (link)
Clinical
Today, the company announced that the Phase 3 CheckMate -649 trial did not meet the secondary endpoint of overall survival (OS) with the combination of Opdivoplus Yervoyas compared to chemotherapy as a first-line treatment for metastatic gastric cancer (GC), GEJC or esophageal adenocarcinoma (EAC) in patients whose tumors express PD-L1 with a combined positive score (CPS) ≥ 5, at a final analysis. The safety profiles of Opdivoand Yervoyin this trial were consistent with those previously reported for other tumor types. These data have no impact on the U.S. indication for Opdivo plus chemotherapy for the treatment of patients with advanced or metastatic GC, GEJC and EAC, regardless of PD-L1 expression status, which received full approval from the FDA based on results from the CheckMate -649 study.
In July, the company announced an update on the Phase 3 CheckMate -651 study comparing Opdivo plus Yervoy to the EXTREME regimen (cetuximab, cisplatin/carboplatin and fluorouracil) as a first-line treatment in platinum-eligible patients with recurrent or metastatic squamous cell carcinoma of the head and neck. Although Opdivoplus Yervoyshowed a clear, positive trend towards OS in patients whose tumors express PD-L1 with a combined CPS ≥ 20, the study did not meet its primary endpoints. (link)
Medical Meetings
In May and June, the company announced new data and analyses across its cancer portfolio (link) that were presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2021 Annual Meeting, including results from the:
Phase 2/3 RELATIVITY-047 study, which showed that the fixed-dose combination of relatlimab, a LAG-3-blocking antibody, and nivolumab, administered as a single infusion, demonstrated a statistically significant and clinically meaningful progression-free survival benefit compared to Opdivo alone in patients with previously untreated metastatic or unresectable melanoma. (link)
Phase 3 CheckMate -648 study, in which two Opdivo-based treatment combinations — Opdivoplus chemotherapy and Opdivoplus Yervoy— demonstrated a statistically significant and clinically meaningful OS benefit compared to chemotherapy at the pre-specified interim analysis in patients with unresectable advanced or metastatic esophageal squamous cell carcinoma with tumor cell PD-L1 expression ≥1%, as well as in the all-randomized population. (link)
Six-and-a-half-year follow-up analysis from the Phase 3 CheckMate -067 study, which showed a continued, durable improvement in OS with Opdivo plus Yervoytherapy and Opdivomonotherapy, versus Yervoy alone, in patients with previously untreated advanced melanoma. (link)
Two-year follow-up analysis from the Phase 3 CheckMate -9LA study, which demonstrated that OpdivoplusYervoywith two cycles of chemotherapy showed a durable survival benefit compared to four cycles of chemotherapy alone after two years in patients with previously untreated, advanced non-small cell lung cancer (NSCLC). (link)
Four-year follow-up analysis from Part 1 of the Phase 3 CheckMate -227 study, which demonstrated a durable, long-term survival benefit of first-line treatment with Opdivoplus Yervoycompared to chemotherapy in patients with previously untreated, advanced NSCLC with a minimum follow-up of over four years (49.4 months). (link)
Hematology
Abecma
Regulatory
In June, the company announced the CHMP of the EMA has recommended granting Conditional Marketing Authorization for Abecma (idecabtagene vicleucel; ide-cel), the company’s B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR) T cell immunotherapy, for the treatment of adult patients with relapsed and refractory multiple myeloma who have received at least three prior therapies, including an immunomodulatory agent, a proteasome inhibitor and an anti-CD38 antibody and have demonstrated disease progression on the last therapy. The CHMP opinion was based on results from the pivotal Phase 2 KarMMa study. (link)
Breyanzi
Clinical
In June, the company announced positive topline results from TRANSFORM, a global, randomized, multicenter Phase 3 study evaluating Breyanzi(lisocabtagene maraleucel) as a second-line treatment in adults with relapsed or refractory large B-cell lymphoma (LBCL) compared to salvage therapy followed by high-dose chemotherapy and hematopoietic stem cell transplant, which is currently considered a gold standard treatment for these patients. (link)
Onureg
Regulatory
In June, the company announced that the EC has granted full Marketing Authorization for Onureg (azacitidine tablets) as a maintenance therapy in adult patients with acute myeloid leukemia who achieved complete remission or complete remission with incomplete blood count recovery (CRi) following induction therapy with or without consolidation treatment and who are not candidates for, including those who choose not to proceed to, hematopoietic stem cell transplantation. The EC approval was based on results from the QUAZAR AML-001 study. (link)
Medical Meetings
In June, at the 26th European Hematology Association (EHA) (Free EHA Whitepaper), the company announced new data and analyses from the:
Phase 2 BEYOND study with Acceleron Pharma Inc. (NASDAQ: XLRN), which showed treatment with Reblozyl (luspatercept-aamt), a first-in-class erythroid maturation agent, plus best supportive care compared to placebo improved anemia in adult patients with non-transfusion dependent beta thalassemia. (link)
In May, at the ASCO (Free ASCO Whitepaper) 2021 Annual Meeting, the company announced new data and analyses from the:
Pivotal Phase 2 KarMMa study with bluebird bio, Inc. (NASDAQ: BLUE), which showed patients treated with Abecmaachieved an overall response rate that remained consistent or achieved a complete response or better after a median follow-up of 24.8 months. The data represent the longest follow-up to date from a global clinical trial of a CAR T cell therapy in multiple myeloma. (link)
Immunology
Zeposia
Regulatory
In May, the company announced that the FDA approved Zeposia (ozanimod) for the treatment of adults with moderately to severely active ulcerative colitis, a chronic inflammatory bowel disease. The approval is based on data from the pivotal, Phase 3 True North study. (link)
Business Development
In June, the company and Eisai Co., Ltd. announced that the companies have entered into an exclusive global strategic collaboration agreement for the co-development and co-commercialization of MORAb-202, an antibody drug conjugate. (link)
In May, the company and Agenus Inc. (NASDAQ: AGEN) announced that they have entered into a definitive agreement under which Bristol Myers Squibb will be granted a global exclusive license to Agenus’ proprietary bispecific antibody program, AGEN1777, that blocks TIGIT and a second undisclosed target. (link)
Financial Guidance
Bristol Myers Squibb is updating its 2021 GAAP EPS guidance range of $3.18 – $3.38 to $2.77 – $2.97 and reaffirming its non-GAAP EPS guidance range of $7.35 – $7.55. Both GAAP and non-GAAP guidance assume current exchange rates. Key 2021 GAAP and non-GAAP line-item guidance assumptions are:
Worldwide revenues increasing in the high-single digits.
Gross margin as a percentage of revenue is expected to be approximately 79% for GAAP and approximately 80% for non-GAAP.
Marketing, selling and administrative expenses to be in-line with 2020 levels for GAAP and increasing in the low-single digits for non-GAAP.
Research and development expenses decreasing in the low-single digits for GAAP and increasing in the mid-single digits for non-GAAP.
An effective tax rate of approximately 23% for GAAP and approximately 16% for non-GAAP.
The 2021 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 2021 non-GAAP EPS guidance is explained and further excludes other specified items as discussed 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.
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 July 28, 2021 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 general public can also access the live webcast by dialing in the U.S. toll free 888-204-4368 or international +1 313-209-4906, confirmation code: 1720109. 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 11:30 a.m. ET on July 28 through 11:30 a.m. ET on August 11, 2021. The replay will also be available through View Source or by dialing in the U.S. toll free 888-203-1112 or international +1 719-457-0820, confirmation code: 1720109.
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. For example, non-GAAP earnings and EPS information are indications of the company’s baseline performance before items that are considered by us to not be reflective of the company’s ongoing results. 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 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 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, 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 transfer of intangible assets and the Otezla* divestiture in the second quarter 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.
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.