On October 25, 2018 Bristol-Myers Squibb Company (NYSE:BMY) reported results for the third quarter of 2018 which were highlighted by strong sales and operating performance along with key regulatory and clinical milestones across the portfolio (Press release, Bristol-Myers Squibb, OCT 25, 2018, View Source [SID1234530105]).
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"We had a very good quarter with strong commercial performance and advances in our portfolio through important clinical and regulatory milestones, including exciting new data for psoriasis patients with our internally discovered and developed TYK2 inhibitor," said Giovanni Caforio, M.D., chairman and chief executive officer, Bristol-Myers Squibb. "Looking forward, we will continue to deliver on our strategy through robust commercial execution and advancing the potential of our increasingly diverse R&D pipeline."
Third Quarter
$ amounts in millions, except per share amounts
2018
2017
Change
Total Revenues $5,691 $5,254 8%
GAAP Diluted EPS 1.16 0.51 **
Non-GAAP Diluted EPS 1.09 0.75 45%
** In excess of +/- 100%
THIRD QUARTER FINANCIAL RESULTS
Bristol-Myers Squibb posted third quarter 2018 revenues of $5.7 billion, an increase of 8% compared to the same period a year ago. Revenues increased 10% when adjusted for foreign exchange impact.
U.S. revenues increased 13% to $3.2 billion in the quarter compared to the same period a year ago. International revenues increased 3%. When adjusted for foreign exchange impact, international revenues increased 6%.
Gross margin as a percentage of revenue increased from 69.9% to 71.0% in the quarter primarily due to an inventory charge in the third quarter last year.
Marketing, selling and administrative expenses decreased 5% to $1.1 billion in the quarter.
Research and development expenses decreased 18% to $1.3 billion in the quarter primarily due to the IFM Therapeutics (IFM) acquisition charges of $310 million in the third quarter last year.
The effective tax rate was 11.8% in the quarter, compared to 27.6% in the third quarter last year. The lower tax rate was due to the non-deductible IFM acquisition charges in the third quarter last year and U.S. Tax Reform.
The company reported net earnings attributable to Bristol-Myers Squibb of $1.9 billion, or $1.16 per share, in the third quarter compared to net earnings of $845 million, or $0.51 per share, for the same period in 2017.
The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.8 billion, or $1.09 per share, in the third quarter, compared to $1.2 billion, or $0.75 per share, for the same period in 2017. An overview of specified items is discussed under the "Use of Non-GAAP Financial Information" section.
Cash, cash equivalents and marketable securities were $8.8 billion, with a net cash position of $1.5 billion, as of September 30, 2018.
THIRD QUARTER PRODUCT AND PIPELINE UPDATE
Product Sales/Business Highlights
Worldwide revenues for the third quarter of 2018, compared to the third quarter of 2017, were driven by:
Opdivo, which grew by $528 million or a 42% increase
Eliquis, which grew by $345 million or a 28% increase
Yervoy , which grew by 18%
Orencia , which grew by 7%
Sprycel , which decreased by 4%
Opdivo
Regulatory
In October, the company provided updates regarding regulatory actions by health authorities in the U.S. and European Union for the ongoing review of its applications for an indication in metastatic first-line non-small cell lung cancer with Opdivo (nivolumab) plus low-dose Yervoy (ipilimumab) in patients with tumor mutational burden ≥10 mutations/megabase (link).
In August, the company announced the U.S. Food and Drug Administration (FDA) approved Opdivo for the treatment of patients with metastatic small cell lung cancer (SCLC) whose cancer has progressed after platinum-based chemotherapy and at least one other line of therapy. Approval for this indication has been granted under accelerated approval based on overall response rate and duration of response.
In July, the company announced the European Commission approved Opdivo for the adjuvant treatment of adult patients with melanoma with involvement of lymph nodes or metastatic disease who have undergone complete resection.
Clinical
In October, at the European Society for Medical Oncology 2018 Annual Congress, the company announced new data and analysis from studies evaluating Opdivo, Yervoy and Opdivo plus Yervoy:
CheckMate -142: Results from a cohort of the Phase 2 trial evaluating Opdivo plus low-dose Yervoy as a first-line treatment in patients with microsatellite instability-high or DNA mismatch repair deficient metastatic colorectal cancer. (link)
CheckMate -067: Results from the Phase 3, double-blind, randomized trial evaluating the combination of Opdivo plus Yervoy or Opdivo monotherapy versus Yervoy monotherapy in patients with previously untreated advanced melanoma. (link)
CheckMate -214: Results from the Phase 3, randomized, open-label study evaluating the combination of Opdivo plus Yervoy versus sunitinib in patients with previously untreated advanced or metastatic renal cell carcinoma. (link)
CheckMate -032: Results from the Phase 1/2 trial evaluating the safety and efficacy of Opdivo as a single agent or in combination with Yervoy in patients with previously treated locally advanced or metastatic urothelial carcinoma. (link)
In October, the company announced topline results from CheckMate -331, an open-label, randomized Phase 3 trial of Opdivo versus chemotherapy in patients with relapsed SCLC after first-line platinum-based chemotherapy. (link)
Sprycel
Regulatory
In August, the company announced the FDA accepted its supplemental Biologics License Application (sBLA) for Sprycel (dasatinib) in combination with chemotherapy for the treatment of pediatric patients with newly diagnosed Philadelphia chromosome-positive acute lymphoblastic leukemia.
Empliciti
Regulatory
In September, the company announced the European Medicines Agency validated its type II variation application for Empliciti (elotuzumab) in combination with pomalidomide and low-dose dexamethasone for the treatment of adult patients with multiple myeloma who have received at least two prior therapies, including lenalidomide and a proteasome inhibitor (PI), and have demonstrated disease progression on the last therapy.
In August, the company announced the FDA accepted its sBLA for Empliciti in combination with pomalidomide and low-dose dexamethasone for the treatment of patients with relapsed/refractory multiple myeloma who have received at least two prior therapies, including lenalidomide and a PI.
Eliquis
Clinical
In August, at the 2018 European Society of Cardiology Congress, the company and Alliance partner, Pfizer, presented 15 Eliquis (apixaban) abstracts. Nine of the studies came from the global real-world data program, ACROPOLIS (Apixaban ExperienCe Through Real-WOrld POpuLatIon Studies), which now includes more than one million patient records, making this the largest body of real world evidence in existence for analyzing the effectiveness and safety of anticoagulants, including Eliquis, among patients with non-valvular atrial fibrillation and venous thromboembolism. (link)
Immunoscience Pipeline
Clinical
In September, at the European Academy of Dermatology and Venereology Congress, the company announced results from a Phase 2 study of BMS-986165, an investigational oral, selective TYK2 inhibitor, in patients with moderate to severe plaque psoriasis. These results were also published in the New England Journal of Medicine. (link)
THIRD QUARTER BUSINESS DEVELOPMENT UPDATE
In October, the company and Compugen Ltd. announced a clinical trial collaboration to evaluate the safety and tolerability of Compugen’s investigational compound COM701 plus Opdivo in patients with advanced solid tumors.
2018 FINANCIAL GUIDANCE
Bristol-Myers Squibb is increasing its 2018 GAAP EPS guidance range from $2.68 – $2.78 to $3.05 – $3.15 and increasing its non-GAAP EPS guidance range from $3.55 – $3.65 to $3.80 – $3.90. Both GAAP and non-GAAP guidance assume current exchange rates. Key revised 2018 GAAP and non-GAAP line-item guidance assumptions are:
Worldwide revenues increasing in the high-single digits.
Gross margin as a percentage of revenue to be approximately 71% for both GAAP and non-GAAP.
An effective tax rate of approximately 16.5% for GAAP and approximately 17% for non-GAAP.
The financial guidance for 2018 excludes the impact of any potential future strategic acquisitions and divestitures, and any specified items that have not yet been identified and quantified. The non-GAAP 2018 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.