On April 27, 2023 Bristol Myers Squibb (NYSE:BMY) reported results for the first quarter of 2023, which reflect robust in-line and new product portfolio growth, strong commercial execution and continued advancement of the product pipeline (Press release, Bristol-Myers Squibb, APR 27, 2023, View Source [SID1234630595]).
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"Our strong execution resulted in double-digit revenue growth for our in-line products and new product portfolio," said Giovanni Caforio, M.D., board chair and chief executive officer, Bristol Myers Squibb. "We continue to successfully execute against our key strategic priorities and meaningfully advance our portfolio renewal strategy, achieving important regulatory and clinical milestones that will benefit patients with serious unmet needs. We remain focused on commercial execution, progressing our pipeline and leveraging our strong financial foundation to invest in the next wave of innovation and deliver value to all of our stakeholders."
First Quarter
$ amounts in millions, except per share amounts
2023
2022
Change
Change Excl. F/X**
Total Revenues
$
11,337
$
11,648
(3
)%
(1)%
Earnings per share – GAAP*
1.07
0.59
81
%
N/A
Earnings per share – Non-GAAP*
2.05
1.96
5
%
N/A
* GAAP and non-GAAP earnings per share include the net impact of Acquired IPRD charges and licensing income of ($0.01) in 2023 compared to ($0.10) per share in 2022.
** See "Use of Non-GAAP Financial Information".
FIRST QUARTER FINANCIAL RESULTS
All comparisons are made versus the same period in 2022 unless otherwise stated.
Bristol Myers Squibb posted first quarter revenues of $11.3 billion, a decrease of 3%, due to Revlimid generic erosion and foreign exchange impacts, partially offset by in-line products (primarily Opdivo and Eliquis) and our new product portfolio (primarily Opdualag, Abecma and Reblozyl). When adjusted for foreign exchange, revenues decreased 1%. Our revenues for in-line products and new product portfolio increased 8% to $9.3 billion, or 10% when adjusted for foreign exchange impacts.
U.S. revenues increased 4% to $8.0 billion in the quarter primarily due to Eliquis, Opdivo and our new product portfolio, partially offset by Revlimid generic erosion. International revenues decreased 16% to $3.3 billion in the quarter. When adjusted for foreign exchange impacts, international revenues decreased 11%, primarily due to Revlimid and Eliquis generic erosion, partially offset by Opdivo and our new product portfolio.
On a GAAP basis, gross margin decreased from 78.8% to 77.4% and on a non-GAAP basis, decreased from 79.2% to 77.8% primarily due to product mix, partially offset by foreign exchange impacts and related hedging settlements.
On a GAAP and non-GAAP basis, marketing, selling and administrative expenses decreased 4% to $1.8 billion in the quarter, primarily due to differences of timing of spend compared to the prior year and foreign exchange impacts, partially offset by higher costs to support new product launches.
On a GAAP and non-GAAP basis, research and development expenses increased 3% in the quarter, primarily due to higher costs to support the overall portfolio.
On a GAAP and non-GAAP basis, Acquired IPRD decreased to $75 million in the current quarter from $333 million in the same period a year ago. On a GAAP and non-GAAP basis, licensing income decreased to $43 million in the current quarter from $52 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 23.9% to 18.2% in the quarter primarily due to jurisdictional earnings mix resulting from specified items and the release of income tax reserves in the first quarter of 2023, partially offset by changes to our Puerto Rico tax decree. On a non-GAAP basis, effective tax rate changed from 15.9% to 15.5%, due to the aforementioned tax reserve releases and changes to our Puerto Rico tax decree.
The company reported net earnings attributable to Bristol Myers Squibb of $2.3 billion, or GAAP EPS of $1.07, in the first quarter, compared to $1.3 billion, or $0.59 per share, for the same period a year ago. In addition to the items discussed above, the higher GAAP EPS in the first quarter of 2023 was due to lower equity investments losses, higher litigation and other settlements income in the first quarter of 2023 and a debt redemption charge in the same period a year ago.
The company reported non-GAAP net earnings attributable to Bristol Myers Squibb of $4.3 billion, or non-GAAP EPS of $2.05, in the first quarter, compared to non-GAAP net earnings of $4.2 billion, or non-GAAP EPS of $1.96 per share, for the same period a year ago.
In addition to the items discussed above, the earnings per share results in the first quarter of 2023 include the impact of lower weighted-average common shares outstanding.
FIRST QUARTER PRODUCT REVENUE HIGHLIGHTS
($ amounts in millions)
Quarter Ended March 31, 2023
% Change from Quarter
Ended March 31, 2022
% Change from
Quarter Ended
March 31, 2022
(Excl. F/X) **
U.S.(c)
Int’l
WW(d)
U.S.(c)
Int’l
WW(d)
Int’l
WW(d)
In-Line Products
Eliquis
$2,554
$869
$3,423
19%
(18)%
7%
(13)%
8%
Opdivo
1,290
912
2,202
17%
11%
15%
18%
17%
Pomalyst/Imnovid
545
287
832
(2)%
7%
1%
12%
2%
Orencia
562
202
764
(5)%
1%
(4)%
10%
(1)%
Sprycel
295
134
429
(3)%
(25)%
(11)%
(19)%
(9)%
Yervoy
314
194
508
1%
(5)%
(1)%
3%
2%
Mature and other products (a)
182
285
467
1%
(20)%
(13)%
(16)%
(10)%
Total In-Line Products
5,742
2,883
8,625
11%
(7)%
4%
(1)%
6%
New Product Portfolio
Reblozyl
158
48
206
18%
*
32%
*
33%
Abecma
118
29
147
Opdualag
116
1
117
*
N/A
*
N/A
*
Zeposia
52
26
78
*
73%
*
80%
*
Breyanzi
58
13
71
41%
*
61%
*
66%
Onureg
25
9
34
32%
*
48%
*
52%
Inrebic
17
8
25
13%
*
39%
*
39%
Camzyos
29
—
29
N/A
N/A
N/A
N/A
N/A
Sotyktu
15
1
16
N/A
N/A
N/A
N/A
N/A
Total New Product Portfolio
588
135
723
Total In-Line and New Product
Portfolio
6,330
3,018
9,348
15%
(4)%
8%
2%
10%
Recent LOE Products (b)
Revlimid
1,541
209
1,750
(24)%
(72)%
(37)%
(71)%
(37)%
Abraxane
162
77
239
(6)%
88%
12%
*
14%
Total Recent LOE Products
1,703
286
1,989
(23)%
(64)%
(34)%
(62)%
(33)%
Total Revenues
$8,033
$3,304
$11,337
4%
(16)%
(3)%
(11)%
(1)%
*
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.
FIRST QUARTER PRODUCT REVENUE HIGHLIGHTS
In-Line Products
Revenues for in-line products in the first quarter were $8.6 billion compared to $8.3 billion in the prior year period, representing an increase of 4% or 6% when adjusted for foreign exchange. In-line products revenue was largely driven by:
Opdivo worldwide revenues increased 15% compared to the prior year period. U.S. revenues were $1.3 billion compared to $1.1 billion in the prior year period, representing an increase of 17% due to higher demand across multiple indications, partially offset by declining second-line eligibility across tumor indications. The higher demand was related to the following indications: the Opdivo+Yervoy combinations for non-small cell lung cancer, various gastric, esophageal and bladder cancers. International revenues were $912 million compared to $824 million in the prior year period, representing an increase of 11% driven by higher demand as a result of additional indication launches and core indications, partially offset by foreign exchange impacts of 7%. Excluding foreign exchange impacts, revenues increased 18%.
Eliquis worldwide revenues grew 7% compared to the prior year period. U.S. revenues were $2.6 billion compared to $2.1 billion in the prior year period, representing an increase of 19% primarily driven by higher demand. International revenues were $869 million compared to $1.1 billion in the prior year period, representing a decrease of 18%, primarily driven by generic erosion in Canada and the U.K. and foreign exchange impacts of 5%. Excluding foreign exchange impacts, revenues declined 13%.
New Product Portfolio
New product portfolio worldwide revenues grew to $723 million compared to $350 million in the prior year period, driven by the launch of Opdualag in March 2022 and higher demand for Abecma and Reblozyl.
Recent LOE Products
Revlimid worldwide revenues declined by 37% compared to the prior year period primarily driven by generic erosion.
PRODUCT AND PIPELINE UPDATE
Cardiovascular
Category
Asset
Milestone
Regulatory
Camzyos
(mavacamten)
The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has recommended approval of Camzyos for the treatment of symptomatic New York Heart Association class II-III obstructive hypertrophic cardiomyopathy (HCM) in adult patients. The European Commission (EC), which has the authority to approve medicines for the European Union (EU), will now review the CHMP opinion. The positive opinion is based upon efficacy and safety results from two Phase 3 trials, EXPLORER- HCM and VALOR-HCM.
Clinical & Research
milvexian
The company, in collaboration with Janssen Pharmaceuticals, Inc., one of the Janssen Pharmaceutical Companies of Johnson & Johnson, launched the Phase 3 Librexia program studying milvexian, an investigational oral factor XIa inhibitor (antithrombotic).The Librexia program will provide important data across three indication-seeking studies: Librexia STROKE for antiplatelet therapy for stroke prevention in acute ischemic stroke or high-risk transient ischemic stroke, Librexia ACS in addition to antiplatelet therapy for event reduction in acute coronary syndromes and Librexia AF which compares milvexian to apixaban in the prevention of stroke in patients with atrial fibrillation.
Oncology
Category
Asset
Milestone
Regulatory
Opdivo
(nivolumab)
The U.S. Food and Drug Administration (FDA) accepted the supplemental Biologics License Application (sBLA) for Opdivo as a monotherapy in the adjuvant setting for the treatment of patients with completely resected stage IIB or IIC melanoma. The FDA has assigned a Prescription Drug User Fee Act (PDUFA) date of October 13, 2023.
In addition, the EMA validated the Type II Variation Marketing Authorization Application for Opdivo as a monotherapy in the adjuvant setting for the treatment of patients with completely resected stage IIB or IIC melanoma. The EMA’s validation confirms the submission is complete and begins the start of the EMA’s centralized review process.
The submissions were based on results from the Phase 3 CheckMate-76K clinical trial.
Clinical & Research
Opdivo
Three-year follow-up results from Phase 3 CheckMate -816 trial demonstrated sustained clinical benefits with three cycles of Opdivo in combination with platinum-based chemotherapy for the neoadjuvant treatment of patients with resectable NSCLC. While overall survival (OS) remained immature at this analysis, there was a continued encouraging trend in OS favoring neoadjuvant Opdivo with chemotherapy over chemotherapy alone.
Three-year follow-up results from Phase 3 CheckMate -274 trial demonstrated significant sustained clinical benefits with Opdivo for the adjuvant treatment of patients with surgically resected, high-risk muscle-invasive urothelial carcinoma.
Three-year follow-up results from Phase 3 CheckMate -9ER trial demonstrated sustained survival and response rate benefits with the combination of Opdivo and Exelixis Inc.’s CABOMETYX (cabozantinib) versus sunitinib in the first-line treatment of advanced renal cell carcinoma.
Hematology
Category
Asset
Milestone
Regulatory
Abecma(idecabtagene vicleucel)
The FDA has accepted the company’s and 2seventy bio’s (NASDAQ: TSVT) sBLA for Abecma for the treatment of adults with relapsed or refractory multiple myeloma who have received an immunomodulatory agent, a proteasome inhibitor, and an anti- CD38 monoclonal antibody. The FDA has assigned a PDUFA goal date of December 16, 2023.
The EMA also validated the type II variation for the extension of indication for Abecma to treat adults with relapsed or refractory multiple myeloma who have received an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody.
Validation of the application confirms the submission is complete and begins the EMA’s centralized review process.
In addition, Japan’s Ministry of Health, Labour and Welfare has accepted Bristol Myers Squibb’s supplemental new drug application for Abecma in patients who have received at least two prior therapies, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody, and have experienced disease progression or relapse after the last therapy.
The three regulatory applications were based on results from the pivotal Phase 3, open-label, global, randomized, controlled KarMMa-3 clinical trial.
Breyanzi(lisocabtagene maraleucel)
The CHMP of the EMA has recommended approval of Breyanzi for the treatment of adult patients with diffuse large B-cell lymphoma, high grade B-cell lymphoma, primary mediastinal large B-cell lymphoma, high grade B-cell lymphoma, primary mediastinal large B-cell lymphoma and follicular lymphoma grade 3B, who relapsed within 12 months from completion of, or are refractory to, first-line chemoimmunotherapy. The positive opinion was based on results from the pivotal Phase 3 TRANSFORM clinical trial.
Reblozyl (luspatercept- aamt)
The EC granted full Marketing Authorization for Reblozyl for treatment in adult patients of anemia associated with non- transfusion-dependent beta thalassemia. The decision was based on results from the Phase 2 BEYOND trial. Reblozyl is being developed and commercialized through a global collaboration with Merck following Merck’s acquisition of Acceleron Pharma, Inc. in November 2021.
Clinical & Research
Abecma
Positive results from Phase 3 KarMMa-3 Study showed Abecma reduced the risk of disease progression or death by 51% versus standard regimens in earlier lines of therapy for relapsed and refractory multiple myeloma.
Immunology
Category
Asset
Milestone
Regulatory
Sotyktu (deucrava- citinib)
The EC approved Sotyktu, a first-in-class, oral, selective tyrosine kinase 2 inhibitor, for the treatment of adults with moderate-to- severe plaque psoriasis who are candidates for systemic therapy, representing a new way of treating this chronic immune-mediated disease. The approval was based on results from the Phase 3 POETYK PSO-1 and POETYK PSO-2 clinical trials. Additional data from the POETYK PSO long-term extension trial (LTE) also supported approval.
Business Development
In April, the company announced an agreement for a vector facility to further strengthen its cell therapy supply chain and expand manufacturing capacity. This will allow Bristol Myers Squibb to dual-source vector supply and transition to newer, higher efficiency manufacturing processes. The transaction is expected to close in the second half of 2023, subject to the fulfillment of applicable closing conditions.
Environmental, Social & Governance (ESG)
On March 15, 2023, the company announced meaningful progress toward its global inclusion & diversity goals and health equity commitments, detailing that the company is on track to achieve many of our goals and exceeding some goals ahead of schedule. In addition, the company introduced new workforce representation goals for Executive Directors and above to strengthen our internal pipeline of talent and next generation of leaders at Bristol Myers Squibb.
As a leading biopharmaceutical company, we understand our responsibility extends well beyond the discovery, development, and delivery of innovative medicines. Our evolving Environmental, Social, and Governance (ESG) strategy builds on a legacy of comprehensive and global sustainability efforts. To learn more about our priorities and goals, please visit our latest ESG report.
Financial Guidance
Bristol Myers Squibb is adjusting its 2023 GAAP line-item guidance as follows:
Adjusting GAAP EPS guidance primarily due to changes in other settlement income and in the fair market value of equity investments while affirming non-GAAP EPS guidance.
Key 2023 GAAP and non-GAAP line-item guidance assumptions are:
U.S. GAAP
Non-GAAP2
February (Prior)
April (Revised)
February
(Prior)
April (Affirmed)
Total Revenues
(as reported)
~2% increase
No change
~2% increase
No change
Total Revenues
(excl. F/X)
~2% increase
No change
~2% increase
No change
Revlimid
~$6.5 billion
No change
~$6.5 billion
No change
Gross Margin %
~77%
No change
~77%
No change
Operating Expenses1
Mid single-digit decline
No change
Low single-digit decline
No change
Tax Rate
~22%
~21%
~17%
No change
Diluted EPS
$4.03-$4.33
$4.10-$4.40
$7.95-$8.25
No change
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 and divestitures, and any specified items that have not yet been identified and quantified and impact of future Acquired IPRD charges. 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.
Conference Call Information
Bristol Myers Squibb will host a conference call today, Thursday, April 27, 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 also access the live conference call by dialing in the U.S. toll free 888-300-3045 or international +1 646-568-1027, confirmation code: 3734085. 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 April 27 through 11:30 a.m. ET on May 11, 2023, by dialing in the U.S. toll free 800-770-2030 or international +1 647-362-9199, confirmation code: 3734085.