On October 26, 2023 Bristol Myers Squibb (NYSE:BMY) reported results for the third quarter of 2023, which reflect significant pipeline progress and advances in the company’s portfolio renewal strategy (Press release, Bristol-Myers Squibb, OCT 26, 2023, View Source [SID1234636365]).
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"My excitement for the company’s future is centered on the diversification of our business, the breadth of our new product portfolio and the strength of our pipeline," said Giovanni Caforio, M.D., board chair and chief executive officer, Bristol Myers Squibb. "I am proud of what we have achieved together and look forward to what the dedicated people of our company will continue to accomplish for patients."
Christopher Boerner, Ph.D., executive vice president and chief operating officer and CEO-elect, Bristol Myers Squibb, added the following:
"I want to thank Giovanni for his tremendous leadership and commitment not only to patients, but also to strengthening our company. During the third quarter, we continued to grow our in-line and new product portfolio. We remain focused on accelerating commercial performance, advancing our pipeline and harnessing our financial flexibility to pursue business development opportunities that benefit patients."
Third Quarter
$ amounts in millions, except per share amounts
2023
2022
Change
Change
Excl. F/X**
Total Revenues
$10,966
$11,218
(2)%
(3)%
Earnings per share – GAAP*
0.93
0.75
24%
N/A
Earnings per share – Non-GAAP*
2.00
1.99
1%
N/A
* GAAP and Non-GAAP earnings per share include the net impact of Acquired IPRD charges and licensing income, which decreased by $0.03 per share
in the third quarter of 2023 compared to an increase of $0.02 per share in the third quarter of 2022.
** See "Use of Non-GAAP Financial Information".
THIRD QUARTER FINANCIAL RESULTS
All comparisons are made versus the same period in 2022 unless otherwise stated.
Bristol Myers Squibb posted third quarter revenues of $11.0 billion, a decrease of 2%, or 3% when adjusted for foreign exchange, due to lower sales of Revlimid, partially offset by our new product portfolio and in-line products.
U.S. revenues decreased 4% to $7.6 billion in the quarter primarily due to lower sales of Revlimid resulting from generic erosion and, as previously disclosed, an increase in the number of patients receiving free drug product for Revlimid, and to a lesser extent Pomalyst, from the Bristol Myers Squibb Patient Assistance Foundation, a separate and independent 501(c)(3) entity to which BMS donates products. This was partially offset by our new product portfolio and in-line products.
International revenues increased 2% to $3.3 billion in the quarter. When adjusted for foreign exchange impacts, international revenues increased 1%, primarily due to Opdivo and our new product portfolio, partially offset by lower average net selling prices.
On a GAAP basis, gross margin decreased from 79.0% to 77.1% and on a Non-GAAP basis, decreased from 79.8% to 77.3% primarily due to product mix and lower hedge settlement gains.
On a GAAP basis, marketing, selling and administrative expenses increased 4% to $2.0 billion in the quarter primarily due to higher advertising and promotion costs to support new product launches, partially offset by the cash settlement of Turning Point Therapeutics, Inc. ("Turning Point") unvested stock awards in 2022. On a Non-GAAP basis, marketing, selling and administrative expenses increased 4% to $1.9 billion in the quarter, primarily due to higher advertising and promotion costs to support new product launches.
On a GAAP basis, research and development expenses decreased 7% to $2.2 billion in the quarter due to lower clinical grants and supplies and cash settlement of Turning Point unvested stock awards in 2022. On a Non-GAAP basis, research and development expenses decreased 4% to $2.2 billion in the quarter primarily due to lower clinical grants and supplies.
On a GAAP and Non-GAAP basis, Acquired IPRD increased to $80 million in the quarter from $30 million in the same period a year ago. On a GAAP and Non-GAAP basis, licensing income was $12 million in the quarter compared to $73 million in the same period a year ago.
On a GAAP basis, amortization of acquired intangible assets decreased 7% to $2.3 billion in the quarter, primarily due to the Abraxane marketed product right being fully amortized in the fourth quarter of 2022.
On a GAAP basis, effective tax rate changed from 27.2% to 9.5% in the quarter and on a Non-GAAP basis the effective tax rate changed from 16.9% to 11.6%, primarily due to changes in the IRS income tax guidance regarding deductibility of certain non-U.S. research and development expenses.
The company reported on a GAAP basis net earnings attributable to Bristol Myers Squibb of $1.9 billion, or $0.93 per share, in the third quarter compared to $1.6 billion, or $0.75 per share, for the same period a year ago.
The company reported on a Non-GAAP basis net earnings attributable to Bristol Myers Squibb of $4.1 billion, or $2.00 per share, in the third quarter compared to $4.3 billion, or $1.99 per share, for the same period a year ago.
The EPS results in the third quarter of 2023 also include the impact of lower weighted-average common shares outstanding.
THIRD QUARTER PRODUCT REVENUE HIGHLIGHTS
($ amounts in millions)
Quarter Ended
September 30, 2023
% Change from Quarter
Ended September 30,
2022
% Change from
Quarter Ended
September 30,
2022 Ex-F/X**
U.S.(c)
Int’l
WW(d)
U.S.(c)
Int’l
WW(d)
Int’l
WW(d)
In-Line Products
Eliquis
$
1,799
$
906
$
2,705
4%
(2)%
2%
(6)%
—%
Opdivo
1,352
923
2,275
9%
15%
11%
15%
11%
Pomalyst/Imnovid
610
262
872
(5)%
7%
(2)%
4%
(2)%
Orencia
719
206
925
5%
2%
5%
1%
5%
Sprycel
406
111
517
1%
(30)%
(8)%
(29)%
(8)%
Yervoy
362
217
579
12%
8%
11%
6%
10%
Mature and other products (a)
191
285
476
—%
(12)%
(7)%
(11)%
(7)%
Total In-Line Products
5,439
2,910
8,349
4%
2%
3%
—%
3%
New Product Portfolio
Reblozyl
200
48
248
28%
41%
31%
35%
29%
Abecma
69
24
93
(8)%
(25)%
(13)%
(28)%
(14)%
Opdualag
162
4
166
93%
N/A
98%
N/A
98%
Zeposia
96
27
123
92%
42 %
78%
32%
75%
Breyanzi
77
15
92
*
67 %
*
67%
*
Onureg
30
13
43
25%
63 %
34%
50%
31%
Inrebic
19
10
29
12%
*
38%
*
33%
Camzyos
67
1
68
*
N/A
*
N/A
*
Sotyktu
62
4
66
*
N/A
*
N/A
*
Total New Product Portfolio
782
146
928
75%
38%
68%
31%
67%
Total In-Line and New Product Portfolio
6,221
3,056
9,277
10%
3%
8%
1%
7%
Recent LOE Products (b)
Revlimid
1,226
203
1,429
(44)%
(19)%
(41)%
(18)%
(41)%
Abraxane
181
79
260
57%
27%
47%
39%
51%
Total Recent LOE Products
1,407
282
1,689
(38)%
(10)%
(35)%
(7)%
(35)%
Total Revenues
$
7,628
$
3,338
$
10,966
(4)%
2%
(2)%
1%
(3)%
* In excess of +100%
** See "Use of Non-GAAP Financial Information".
(a) Includes over-the-counter (OTC) products, royalty revenue and mature products.
(b) Recent LOE Products includes products with significant expected decline in revenue from a prior reporting period as a result of a loss of exclusivity.
(c) Includes Puerto Rico.
(d) Worldwide (WW) includes International (Int’l) and U.S.
THIRD QUARTER PRODUCT REVENUE HIGHLIGHTS
In-Line Products
Revenues for in-line products in the third quarter were $8.3 billion compared to $8.1 billion in the prior year period. In-line products revenue was largely driven by:
Opdivo worldwide revenues increased 11% reported and when adjusted for foreign exchange. U.S. revenues increased 9% to $1.4 billion compared to the prior year period primarily due to higher demand. International revenues were $923 million compared to $804 million in the prior year period, representing an increase of 15% reported and when adjusted for foreign exchange, primarily due to higher demand as a result of launches for additional indications and core indications.
Eliquis worldwide revenues increased 2% compared to the prior year period. U.S. revenues were $1.8 billion compared to $1.7 billion in the prior year period, representing an increase of 4% primarily due to higher demand, partially offset by GTN adjustments in 2023. International revenues were $906 million compared to $926 million in the prior year period, representing a decrease of 2%, primarily driven by lower average net selling prices and generic erosion in Canada and the U.K.
New Product Portfolio
New product portfolio worldwide revenues increased to $928 million compared to $553 million in the prior year period, representing a growth of 68%, primarily driven by higher demand across the portfolio, including for Opdualag, Sotyktu, Camzyos, Reblozyl, Zeposia and Breyanzi.
Recent LOE Products
Revlimid worldwide revenues declined by 41% compared to the prior year period, primarily due to generic erosion and, as previously disclosed, an increase in the number of patients receiving free drug product from the Bristol Myers Squibb Patient Assistance Foundation, a separate and independent 501(c)(3) entity to which the company donates products.
PRODUCT AND PIPELINE UPDATE
Bristol Myers Squibb recently achieved significant regulatory and clinical milestones, including an important U.S. regulatory approval for Reblozyl in first-line, MDS-associated anemia. In addition, the company achieved strong results from a Phase 3 study evaluating subcutaneous nivolumab and received two key approvals—from the U.S. Food and Drug Administration (FDA) and the European Commission for Opdivo in stage IIB or IIC melanoma. The company also announced initial data from a Phase 3 trial evaluating a perioperative regimen including Opdivo in non-small cell lung cancer, as well as positive Phase 2 results evaluating its potential first-in-class LPA1 antagonist in progressive pulmonary fibrosis.
Cardiovascular
Category
Asset
Milestone
Clinical & Research
Camzyos (mavacamten)
Data from the EXPLORER-LTE cohort of the MAVA-LTE study showed sustained improvements in left ventricular outflow tract obstruction, symptoms and NT-proBNP levels in patients with symptomatic obstructive hypertrophic cardiomyopathy (HCM) based on a cumulative 120-week analysis.
In addition, long-term follow-up results from the Phase 3 VALOR-HCM LTE trial demonstrated the consistent impact of oral treatment for severely symptomatic obstructive HCM patients by showing that nearly nine out of 10 patients treated with Camzyos have continued in the trial without septal reduction therapy at either 40 or 56 weeks of treatment.
Eliquis (apixaban)
Results presented by the Bristol-Myers Squibb-Pfizer Alliance from ATHENS, a retrospective real-world data study, demonstrated that switching from Eliquis to rivaroxaban in non-valvular atrial fibrillation patients was associated with a higher risk of stroke/systemic embolism and major bleeding than those who continued Eliquis.
Oncology
Category
Asset
Milestone
Regulatory
Opdivo(nivolumab)
The FDA approved the supplemental Biologics License Application for Opdivo as a monotherapy in the adjuvant setting for the treatment of eligible patients with completely resected stage IIB or IIC melanoma. The approval is based on results from the CheckMate -76K trial.
The European Commission approvedOpdivo as a monotherapy for the adjuvant treatment of adults and adolescents 12 years of age and older with stage IIB or IIC melanoma who have undergone complete resection. The approval is based on results from the Phase 3 CheckMate -76K trial.
Clinical & Research
Opdivo
First results from the Phase 3 CheckMate -901 trial demonstrated that Opdivo in combination with cisplatin-based chemotherapy followed by Opdivo monotherapy demonstrated statistically significant and clinically meaningful improvements in the primary efficacy endpoints of overall survival and progression-free survival compared to standard-of-care cisplatin-based chemotherapy as a first-line treatment for patients with unresectable or metastatic urothelial carcinoma who are eligible for cisplatin-based chemotherapy.
First data disclosure from the Phase 3 CheckMate -77T trial evaluating the perioperative regimen of neoadjuvant Opdivo with chemotherapy followed by surgery and adjuvant Opdivo in patients with resectable stage IIA to IIIB non-small cell lung cancer (NSCLC) demonstrated a statistically significant and clinically meaningful improvement in the primary efficacy endpoint of event-free survival compared to neoadjuvant chemotherapy and placebo followed by surgery and adjuvant placebo.
Three-year follow-up results from exploratory analyses of the Phase 3 CheckMate -816 trial demonstrated sustained event-free survival (EFS) and promising overall survival trends with three cycles of Opdivo in combination with platinum-based chemotherapy for the neoadjuvant treatment of patients with resectable NSCLC, regardless of PD-L1 expression levels. Neoadjuvant Opdivo with chemotherapy also showed improvements in pathologic complete response (pCR) and major pathologic response (MPR) over chemotherapy alone in PD-L1 ≥1% and <1% patient populations.
Part B of the Phase 3 CheckMate -914 trial, evaluating Opdivo as an adjuvant treatment for patients with localized renal cell carcinoma who have undergone full or partial removal of the kidney and who are at a moderate or high risk of relapse, did not meet the primary endpoint of disease-free survival as assessed by Blinded Independent Central Review. The safety profile was consistent with previously reported studies of other Opdivo and Opdivo-based combinations in solid tumors.
Subcutaneous nivolumab
Results from the Phase 3 CheckMate -67T trial evaluating subcutaneous nivolumab in advanced or metastatic clear cell renal cell carcinoma demonstrated noninferior pharmacokinetics (co-primary endpoints) and objective response rate (key secondary endpoint) when compared to intravenous Opdivo. The company looks forward to discussing next steps for subcutaneous nivolumab with health authorities across multiple indications.
Opdivo+Yervoy
Six-year follow-up results from Part 1 of the Phase 3 CheckMate -227 trial demonstrated long-term, durable survival benefits of Opdivo plus Yervoy compared to chemotherapy in the first-line treatment of patients with metastatic NSCLC, regardless of PD-L1 expression levels.
repotrectinib
Updated results from the registrational Phase 1/2 TRIDENT-1 study demonstrated that repotrectinib, a next-generation ROS1/TRK tyrosine kinase inhibitor, continued to show high response rates and durable responses in patients with ROS1-positive locally advanced or metastatic NSCLC. The FDA granted Priority Review of the New Drug Application for repotrectinib and assigned a Prescription Drug User Fee Act goal date of November 27, 2023.
Hematology
Category
Asset
Milestone
Regulatory
Reblozyl(luspatercept-aamt)
The FDA approvedReblozyl for the treatment of anemia without previous erythropoiesis stimulating agent use (ESA-naïve) in adult patients with very low- to intermediate-risk myelodysplastic syndromes who may require regular red blood cell transfusions. The approval is based on interim results from the pivotal Phase 3 COMMANDS trial, expanding Reblozyl indication to the first-line setting regardless of ring sideroblast status and enabling treatment across a broader array of patients.
Immunology
Category
Asset
Milestone
Regulatory
LPA1 antagonist BMS-986278
The FDA granted BMS-986278, a potential first-in-class oral, lysophosphatidic acid receptor 1 (LPA1)antagonist, Breakthrough Therapy Designation for the treatment of progressive pulmonary fibrosis (PPF).
Clinical & Research
LPA1 antagonist
Results from the Phase 2 study evaluating BMS-986278 in patients with PPF demonstrated that twice-daily administration of 60mg of BMS-986278 over 26 weeks reduced the rate of decline in percent predicted forced vital capacity by 69% compared to placebo.
Sotyktu (deucravacitinib)
Results from the POETYK-PSO long-term extension trial of Sotyktu treatment in adult patients with moderate-to-severe plaque psoriasis demonstrated that clinical response was maintained at 73.2% for Psoriasis Area and Severity Index 75 with 3 years of continuous Sotyktu treatment. Sotyktu demonstrated a consistent safety profile with no increases in adverse or serious adverse events and no new safety signals.
Zeposia (ozanimod)
First interim readout from the Phase 3b ENLIGHTEN trial demonstrated that almost half of patients with early relapsing multiple sclerosis (RMS) have clinically meaningful improvement in cognitive functioning compared to baseline after one year of Zeposia treatment.
In addition, late-breaking data from the DAYBREAK and RADIANCE trials demonstrated that, after eight years of follow-up, 76% of patients treated with Zeposia for RMS were free of six-month confirmed disability progression. Findings also demonstrated treatment with Zeposia resulted in low rates of progression-independent relapse activity and relapse-associated worsening, key drivers of disease progression and permanent disability in multiple sclerosis.
Research and Development (R&D) Update
In September, Bristol Myers Squibb hosted an R&D Day highlighting its advancing pipeline and differentiated research platforms to support long-term sustainable growth. During the presentation, members of the company’s leadership team discussed:
The strengthening of Bristol Myers Squibb’s scientific leadership and the advancement of a promising pipeline;
An expectation of doubling registrational assets from six to 12 over the next 18 months;
More than 25 indication expansion opportunities on the horizon and nine high-potential early assets that are expected to advance in the company’s pipeline;
Differentiated research platforms that support long-term growth, including Cell Therapy and Targeted Protein Degradation;
Increased depth across the company’s oncology, hematology, immunology and cardiovascular therapeutic areas and a growing presence in neuroscience; and
Efforts to further increase and sustain the productivity of its R&D engine and bring treatments to patients faster.
Business Development
In October 2023, the company announced it had entered into a definitive merger agreement to acquire Mirati Therapeutics, Inc. ("Mirati"), a commercial-stage targeted oncology company. The pending acquisition, when complete, is expected to strengthen and diversify Bristol Myers Squibb’s oncology franchise, add KRAZATI (adagrasib), a best-in-class KRASG12C inhibitor currently approved in lung cancer, to its commercial oncology portfolio, and add MRTX1719, a potential first-in-class MTA-cooperative PRMT5 inhibitor in Phase 1 development. Bristol Myers Squibb also gains access to several promising clinical and pre-clinical stage assets, including additional KRAS inhibitors and enabling programs.
Capital Allocation
The company maintains a balanced approach to capital allocation focused on prioritizing investment for growth through business development, maintaining a strong balance sheet, growing the dividend and opportunistic share repurchases. Dividend decisions are subject to approval by the Board of Directors.
In August, the company announced that it had entered into accelerated share repurchase (ASR) agreements to repurchase, in aggregate, $4 billion of Bristol Myers Squibb common stock. The company anticipates that final settlement of these transactions will occur during the fourth quarter of 2023.
Environmental, Social & Governance (ESG)
As a leading biopharmaceutical company, we understand our responsibility extends well beyond the discovery, development and delivery of innovative medicines. Our evolving ESG strategy builds on a legacy of comprehensive and global sustainability efforts that seek to drive business value and positively impact patients, employees, communities and the planet.
In August 2023, the company published its latest ESG report, which details the company’s goals, strategies and performance across four ESG focus areas: ethics, integrity and quality; health equity and healthcare access; global inclusion and diversity; and environmental sustainability. Highlights include:
Increased access for underserved communities.
Progress toward global inclusion and diversity and health equity aspirational goals.
Expanded clinical trial diversity and advanced supplier diversity.
A reduced environmental footprint.
Strengthened ESG oversight and accountability.
Bristol Myers Squibb was inducted into the Billion Dollar Roundtable, joining other Fortune 100 companies that have invested $1 billion with diverse-owned suppliers.
Financial Guidance
Bristol Myers Squibb is revising its 2023 GAAP and Non-GAAP line item guidance as follows:
Adjusting total revenues for Revlimid to be approximately $6.0 billion.
Adjusting GAAP diluted EPS range to $3.68-$3.83 and raising midpoint of Non-GAAP diluted EPS range, with the new range being $7.50-$7.65.
Adjusting GAAP tax rate to approximately 11% and adjusting Non-GAAP tax rate to approximately 15.5%, primarily due to a reduction in previously estimated taxes resulting from changes in the income tax guidance regarding deductibility of certain non-U.S. research and development expenses.
Key 2023 GAAP and Non-GAAP line-item guidance assumptions are:
U.S. GAAP
Non-GAAP2
July
(Prior)
October
(Revised)
July
(Prior)
October
(Revised)
Total Revenues
(as reported)
Low single-digit decline
No Change
Low single-digit decline
No Change
Total Revenues
(excl. F/X)
Low single-digit decline
No Change
Low single-digit decline
No Change
Revlimid
~ $5.5 billion
~$6.0 billion
~ $5.5 billion
~$6.0 billion
Gross Margin %
~76%
No Change
~76%
No Change
Operating Expenses1
Low single-digit decline
No Change
Low single-digit decline
No Change
Tax Rate
~ 16%
~11%
~ 17.5%
~15.5%
Diluted EPS
$3.72-$4.02
$3.68-$3.83
$7.35-$7.65
$7.50-$7.65
1 Operating Expenses — MS&A and R&D, excluding Acquired IPRD and Amortization of acquired intangible assets.
2 See "Use of Non-GAAP Financial Information."
The 2023 financial guidance excludes the impact of any potential future strategic acquisitions, including the planned acquisition of Mirati, and divestitures, and any specified items that have not yet been identified and quantified and the impact of future Acquired IPRD charges, including the charge associated with the re-acquisition of rights for mavacamten in China and certain other Asian territories. To the extent we have quantified the impact of significant R&D charges or other income resulting from upfront or contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights, we may update this information from time to time on our website www.bms.com, in the "Investors" section. GAAP and Non-GAAP guidance assume current exchange rates. The 2023 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.
The company will no longer include GAAP financial guidance beginning with the presentation of the fourth quarter and year-end 2023 results.
Medium-Term Financial Targets
The company is updating its previously communicated medium-term targets:
July (Prior)
October (Revised)
Low-to-mid single digit revenue CAGR1 from 2020-2025
Reaffirms low-to-mid single digit revenue CAGR1 from 2020-2025
Low double-digit revenue CAGR1 Ex-Revlimid/Pomalyst from 2020-2025
Reaffirms low double-digit revenue CAGR1 Ex-Revlimid/Pomalyst from 2020-2025
$8-$10 billion growth from in-line brands2 from 2020-2025
Reaffirms $8-$10 billion growth from in-line brands2 from 2020-2025
$10-$13 billion from new product portfolio in 2025
Adjusts to >$10 billion revenue from new product portfolio in 2026
40%+ Non-GAAP operating margin through 2025
Adjusts Non-GAAP operating margin target to >37% through 2025
1 At constant exchange rates on a risk-adjusted basis.
2 Primarily I-O and Eliquis.
Conference Call Information
Bristol Myers Squibb will host a conference call today, Thursday, October 26, 2023, at 8:00 a.m. ET during which company executives will review the quarterly financial results 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." target="_blank" title="View Source." rel="nofollow">View Source
Investors and the public can register for the live conference call here. Those unable to register can access the live conference call by dialing in the U.S. toll-free 1-833-816-1116 or international +1 412-317-0705. Materials related to the call will be available at View Source prior to the start of the conference call.
A replay of the webcast will be available at 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 October 26, 2023, through 11:30 a.m. ET on November 9, 2023, by dialing in the U.S. toll free 1-877-344-7529 or international +1 412-317-0088, confirmation code: 3515954.