On APRIL 27, 2017 Bristol-Myers Squibb Company (NYSE:BMY) reported results for the first quarter of 2017, which were highlighted by strong sales for key products Opdivo and Eliquis , regulatory approval for Opdivo in advanced bladder cancer in the U.S., positive opinions from the Committee for Medicinal Products for Human Use (CHMP) for advanced bladder and head and neck cancers in Europe, and strategic transactions in oncology that further strengthened the company’s pipeline (Press release, Bristol-Myers Squibb, APR 27, 2017, View Source [SID1234518703]).

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"During the first quarter we delivered strong sales and earnings growth, achieved important regulatory milestones for Opdivo in the U.S. and Europe and presented important new data across our Immuno-Oncology and fibrosis portfolios," said Giovanni Caforio, M.D., chief executive officer, Bristol-Myers Squibb. "Building on this strong start to the year, we will continue to drive commercial performance in the short-term while advancing important opportunities to broaden our approach in Immuno-Oncology and progressing our early specialty portfolio."


First Quarter
$ amounts in millions, except per share amounts
2017
2016
Change
Total Revenues $4,929 $4,391 12%
GAAP Diluted EPS 0.94 0.71 32%
Non-GAAP Diluted EPS 0.84 0.74 14%

FIRST QUARTER FINANCIAL RESULTS

Bristol-Myers Squibb posted first quarter 2017 revenues of $4.9 billion, an increase of 12% compared to the same period a year ago. Revenues increased 13% when adjusted for foreign exchange impact.
U.S. revenues increased 8% to $2.7 billion in the quarter compared to the same period a year ago. International revenues increased 18%. When adjusted for foreign exchange impact, international revenues increased 20%.
Gross margin as a percentage of revenue decreased from 76.0% to 74.5% in the quarter primarily due to product mix.
Marketing, selling and administrative expenses increased 1% to $1.1 billion in the quarter.
Research and development expenses increased 13% to $1.3 billion in the quarter.
The effective tax rate was 21.9% in the quarter, compared to 27.1% in the first quarter last year.
The company reported net earnings attributable to Bristol-Myers Squibb of $1.6 billion, or $0.94 per share, in the first quarter compared to net earnings of $1.2 billion, or $0.71 per share, for the same period in 2016. The results for the first quarter of 2017 included Bristol-Myers Squibb’s share of a patent-infringement litigation settlement related to Merck’s PD-1 antibody Keytruda that contributed $0.18 per share.
The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.4 billion, or $0.84 per share, in the first quarter, compared to $1.2 billion, or $0.74 per share, for the same period in 2016. 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 $360 million, as of March 31, 2017.
FIRST QUARTER PRODUCT AND PIPELINE UPDATE

Product Sales/Business Highlights

The increase in global revenues for the first quarter of 2017, compared to the first quarter of 2016, was driven by:


Product
Growth %

Opdivo 60%
Eliquis 50%
Yervoy
25%
Sprycel
14%
Orencia
13%

Opdivo

Regulatory

In April, the company announced the CHMP recommended the approval of Opdivo for the treatment of patients with locally advanced unresectable or metastatic urothelial carcinoma (mUC) in adults after failure of prior platinum-containing chemotherapy. The CHMP recommendation will be reviewed by the European Commission (EC), which has the authority to approve medicines for the European Union (EU).
In April, the company announced the U.S. Food and Drug Administration (FDA) accepted a supplemental Biologics License Application seeking to extend the use of Opdivo to patients with mismatch repair deficient or microsatellite instability high metastatic colorectal cancer after prior fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy. The FDA granted the application priority review and the FDA action date is August 2, 2017.
In April, the FDA approved an updated indication for Opdivo for the treatment of adult patients with Classical Hodgkin lymphoma that have relapsed or progressed after autologous hematopoietic stem cell transplantation (HSCT) and brentuximab vedotin, or three or more lines of systemic therapy that includes autologous HSCT. This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.
In March, the company announced the CHMP recommended the approval of Opdivo as monotherapy for the treatment of squamous cell cancer of the head and neck in adults progressing on or after platinum-based therapy. The CHMP recommendation will be reviewed by the EC.
In March, the company and its partner Ono Pharmaceutical Co. announced the approval of Opdivo as monotherapy for the treatment of recurrent or metastatic head and neck cancer in Japan.
In February, the company announced the FDA provided accelerated approval for Opdivo for the treatment of patients with locally advanced or metastatic urothelial carcinoma who have disease progression during or following platinum-containing chemotherapy or have disease progression within 12 months of neoadjuvant or adjuvant treatment with platinum-containing chemotherapy.
Clinical

In April, at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting, the company announced new data and analysis from studies evaluating Opdivo and the Opdivo + Yervoy regimen:
First overall survival results from CheckMate -067, a Phase 3 trial of Opdivo and the Opdivo + Yervoy regimen versus Yervoy alone in patients with previously untreated advanced melanoma. More detail of the study results is included in the original press release (link).
The first report of five-year overall survival data from the Phase 1 dose-ranging study CA209-003 evaluating Opdivo in patients with previously treated advanced non-small cell lung cancer. More detail of the study results is included in the original press release (link).
In April, the company announced CheckMate -143, a randomized Phase 3 clinical trial evaluating the efficacy and safety of Opdivo in patients with first recurrence of glioblastoma multiforme did not meet its primary endpoint of improved overall survival over bevacizumab monotherapy.
Sprycel

In February, the company announced the European Patent Office (EPO) upheld a decision finding European Patent No. 1169038 (the ‘038 patent), the Composition of Matter patent covering dasatinib, the active ingredient in Sprycel, to be invalid. The decision does not impact patents outside of the EU or other Sprycel-related patents. Additionally in February, the EPO Board of Appeal reversed and remanded an invalidity decision on European Patent No. 1610780 and its claim to the use of dasatinib to treat chronic myeloid leukemia (CML), which the EPO’s Opposition Division had revoked in October 2012. The company intends to take appropriate legal actions to protect Sprycel.
Eliquis

In March, at the American College of Cardiology’s (ACC) Annual Scientific Session, the company and its partner Pfizer Inc. announced findings from a real-world data analysis of the U.S. Medicare database comparing the risk of stroke or systemic embolism and rate of major bleeding among patients with non-valvular atrial fibrillation who were treated with direct oral anticoagulants Eliquis, dabigatran or rivaroxaban versus warfarin. More detail of the analysis is included in the original press release (link).
Fibrosis

In April, at EASL: The International Liver Congress, the company announced data from a Phase 2 study of BMS-986036, an investigational pegylated analogue of human fibroblast growth factor 21 (FGF21), a key regulator of metabolism, in patients with biopsy-confirmed non-alcoholic steatohepatitis (NASH ) (F1-F3). The study achieved its primary endpoint of significant reduction in liver fat versus placebo, and also showed improvement in markers of liver injury and fibrosis.
FIRST QUARTER BUSINESS DEVELOPMENT UPDATE

In April, the company and Transgene announced a clinical research collaboration to evaluate the safety, tolerability and efficacy of Transgene’s investigational therapeutic vaccine TG4010 in combination with Opdivo + standard chemotherapy (CT) as a first-line treatment for advanced non-squamous non-small cell lung cancer (NSCLC) in patients whose tumors have low or undetectable levels of PD-L1.
In April, the company and Apexigen, Inc. announced a clinical trial collaboration to evaluate the safety, tolerability and preliminary efficacy of Apexigen’s APX005M with Opdivo in patients with second-line metastatic NSCLC who have failed prior chemotherapy, and in metastatic melanoma patients who have failed prior Immuno-Oncology (I-O) therapy.
In April, the company and Nordic Bioscience announced a collaboration to develop biomarker technology to potentially aid in the diagnosis and monitoring of fibrotic diseases including NASH.
In April, the company announced it entered into two separate agreements to outlicense BMS-986168, an anti-eTau compound in development for Progressive Supranuclear Palsy, to Biogen, and BMS-986089, an anti-myostatin adnectin in development for Duchenne Muscular Dystrophy, to Roche. The company will receive upfront payments of $300 million from Biogen and $170 million from Roche, along with potential milestone payments and royalties from each company.
In April, the company and Incyte Corporation announced an agreement to advance their clinical development program evaluating the combination of epacadostat, Incyte’s investigational oral selective IDO1 enzyme inhibitor, with Opdivo into Phase 3 registrational studies in first-line NSCLC across the spectrum of PD-L1 expression and first-line head and neck cancer. Additionally, the companies are expanding the ECHO-204 Phase 1/2 study, established under a collaboration between the companies in 2014, to include anti-PD-1/PD-L1 relapsed/refractory melanoma cohorts.
In March, the company and Foundation Medicine announced a collaboration to leverage Foundation Medicine’s comprehensive genomic profiling and molecular information solutions to identify predictive biomarkers such as Tumor Mutational Burden and Microsatellite Instability in patients enrolled across clinical trials investigating Bristol-Myers Squibb’s cancer immunotherapies.
In March, the company, the Parker Institute for Cancer Immunotherapy and the Cancer Research Institute (CRI) announced a multi-year collaboration agreement to coordinate and rapidly initiate clinical I-O studies across the Parker Institute and CRI networks.
In March, the company and CytomX Therapeutics, Inc. announced an expansion of their collaboration to discover novel therapies against multiple I-O targets using CytomX’s proprietary Probody Platform, expanding the number of targets from four to twelve.
In March, the company announced an equity investment and plans for a research collaboration with GRAIL Inc. that grants the company early access to GRAIL’s comprehensive clinical trial databases that may help improve understanding of tumor genomics. Additionally, Bristol-Myers Squibb will utilize GRAIL’s analytics tools to inform research, advance diagnostics and improve patient outcomes.
In February, the company and Exelixis, Inc. announced a clinical development collaboration to evaluate Cabometyx (cabozantinib), Exelixis’ small molecule inhibitor of receptor tyrosine kinases, with Opdivo, either alone or in combination with Yervoy. The agreement is expected to include a Phase 3 pivotal trial in first-line renal cell carcinoma, with additional trials planned in bladder cancer, hepatocellular carcinoma (HCC), and potentially other tumor types.
In February, the company announced an expansion of the five-year old International Immuno-Oncology Network (II-ON) with the addition of Columbia University Medical Center and Peter MacCallum Cancer Centre (Peter Mac). II-ON is a global peer-to-peer collaboration between Bristol-Myers Squibb and academia that aims to advance I-O science and translational medicine to improve patient outcomes.
SHARE REPURCHASE

In February, the company executed accelerated share repurchase (ASR) agreements to repurchase, in aggregate, $2 billion of the company’s common stock. The ASR was funded through a combination of debt and cash and is part of the company’s existing share repurchase authorization. Approximately 80 percent of the shares to be repurchased under the transaction were received by the company on February 28, 2017 and the company anticipates that all repurchases under the ASR will be completed by the end of the second quarter of 2017.

The decision reflects the company’s strong financial position and its balanced approach to capital allocation, including a commitment to its dividend and a disciplined approach to business development.

2017 FINANCIAL GUIDANCE

Bristol-Myers Squibb is increasing its 2017 GAAP EPS guidance range from $2.47- $2.67 to $2.72 – $2.87 and is increasing its non-GAAP EPS guidance range from $2.70 – $2.90 to $2.85 – $3.00. Both GAAP and non-GAAP guidance assume current exchange rates. Key revised 2017 GAAP and non-GAAP line-item guidance assumptions are:

Worldwide revenues increasing in the mid-single digits.
Research and development expenses increasing in the high-teens digit range for GAAP and increasing in the low-double digits range for non-GAAP.
An effective tax rate of approximately 22% for GAAP with non-GAAP remaining at approximately 21%.
The 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 non-GAAP guidance also excludes other specified items as discussed under "Use of Non-GAAP Financial Information." Details reconciling GAAP amounts to non-GAAP amounts, with non-GAAP reflecting specified items are provided in supplemental materials attached to this press release and available on the company’s website.

Keytruda is a trademark of Merck & Co., Inc.
Probody Platform is a trademark of CytomX Therapeutics, Inc.
Cabometyx is a trademark of Exelixis, Inc.

Use of Non-GAAP Financial Information

This press 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 restructuring costs, accelerated depreciation and impairment of property, plant and equipment and intangible assets, R&D charges in connection with the acquisition or licensing of third party intellectual property rights, divestiture gains or losses, upfront payments from out licensed assets, pension charges, legal and other contractual settlements 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 our baseline performance, supplement or enhance management, analysts and investors overall understanding of our underlying financial performance and facilitate comparisons among current, past and future periods. For example, non-GAAP earnings and EPS information is an indication of our baseline performance before items that are considered by us to not be reflective of our ongoing results. In addition, this information is among the primary indicators 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.

Statement on Cautionary Factors

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans and projections regarding the company’s financial position, results of operations, market position, product development and business strategy. These statements may be identified by the fact that they use words such as "anticipate", "estimates", "should", "expect", "guidance", "project", "intend", "plan", "believe" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, effects of the continuing implementation of governmental laws and regulations related to Medicare, Medicaid, Medicaid managed care organizations and entities under the Public Health Service 340B program, pharmaceutical rebates and reimbursement, market factors, competitive product development and approvals, pricing controls and pressures (including changes in rules and practices of managed care groups and institutional and governmental purchasers), economic conditions such as interest rate and currency exchange rate fluctuations, judicial decisions, claims and concerns that may arise regarding the safety and efficacy of in-line products and product candidates, changes to wholesaler inventory levels, variability in data provided by third parties, changes in, and interpretation of, governmental regulations and legislation affecting domestic or foreign operations, including tax obligations, changes to business or tax planning strategies, difficulties and delays in product development, manufacturing or sales including any potential future recalls, patent positions and the ultimate outcome of any litigation matter. These factors also include the company’s ability to execute successfully its strategic plans, including its business development strategy, the expiration of patents or data protection on certain products, including assumptions about the company’s ability to retain patent exclusivity of certain products, and the impact and result of governmental investigations. There can be no guarantees with respect to pipeline products that future clinical studies will support the data described in this release, that the compounds will receive necessary regulatory approvals, or that they will prove to be commercially successful; nor are there guarantees that regulatory approvals will be sought, or sought within currently expected timeframes, or that contractual milestones will be achieved. For further details and a discussion of these and other risks and uncertainties, see the company’s periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

On April 28, 2016 Bristol-Myers Squibb Company (NYSE:BMY) reported results for the first quarter of 2016, which were highlighted by strong sales for Opdivo, Eliquis and our hepatitis C franchise along with significant regulatory milestones and key data in Immuno-Oncology (Press release, Bristol-Myers Squibb, APR 28, 2016, View Source [SID:1234511529]).

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"We had a very good first quarter highlighted by strong sales growth and significant progress in bringing the promise of Immuno-Oncology across multiple types of cancer to patients," said Giovanni Caforio, M.D., chief executive officer, Bristol-Myers Squibb. "The launch of Opdivo continues to accelerate with data in new cancers, additional indications and continued rapid market adoption. By growing our business and advancing our pipeline, we are successfully executing our growth strategy."

First Quarter
$ amounts in millions, except per share amounts
2016
2015
Change
Total Revenues $4,391 $4,041 9%
GAAP Diluted EPS 0.71 0.71 −
Non-GAAP Diluted EPS 0.74 0.71 4%

FIRST QUARTER FINANCIAL RESULTS

Bristol-Myers Squibb posted first quarter 2016 revenues of $4.4 billion, an increase of 9% compared to the same period a year ago. Global revenues increased 11% adjusted for foreign exchange impact. Excluding Abilify and Erbitux, global revenues increased 31% or 34% adjusted for foreign exchange impact.

U.S. revenues increased 24% to $2.5 billion in the quarter compared to the same period a year ago. International revenues decreased 7%. When adjusted for foreign exchange impact, international revenues decreased 2%.

Gross margin as a percentage of revenues was 76.0% in the quarter compared to 79.0% in the same period a year ago.

Marketing, selling and administrative expenses increased 4% to $1.1 billion in the quarter.

Research and development expenses increased 12% to $1.1 billion in the quarter.

The effective tax rate was 27.1% in the quarter, compared to 17.2% in the first quarter last year.

The company reported net earnings attributable to Bristol-Myers Squibb of $1.2 billion, or $0.71 per share, in the quarter compared to net earnings of $1.2 billion, or $0.71 per share, a year ago.

The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.2 billion, or $0.74 per share, in the first quarter, compared to $1.2 billion, or $0.71 per share, for the same period in 2015. An overview of specified items is discussed under the "Use of Non-GAAP Financial Information" section.

Cash, cash equivalents and marketable securities were $8.0 billion, with a net cash position of $1.3 billion, as of March 31, 2016.

FIRST QUARTER PRODUCT AND PIPELINE UPDATE

Global revenues for the first quarter of 2016, compared to the first quarter of 2015, were driven by Opdivo, which grew by $664 million; Eliquis, which grew by $379 million; Hepatitis C Franchise, which grew 62%; Orencia, which grew 19%; and Sprycel, which grew 9%.

Opdivo

In April, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy Designation to Opdivo for the potential indication of recurrent or metastatic squamous cell carcinoma of the head and neck (SCCHN) after platinum based therapy. The designation is based on results of CheckMate -141, a Phase 3, open-label, randomized trial evaluating Opdivo versus investigator’s choice of therapy in patients with recurrent or metastatic SCCHN with tumor progression within six months of platinum therapies in the adjuvant, primary, recurrent or metastatic setting. This trial was stopped early in January 2016 because an assessment conducted by the independent Data Monitoring Committee concluded that the study met its primary endpoint of overall survival (OS).

In April, the FDA accepted for filing and review a Supplemental Biologics License Application (sBLA) for Opdivo which seeks to expand use to patients with classical Hodgkin lymphoma (cHL) after prior therapies. The application included CheckMate -205 data, which evaluated Opdivo in cHL patients who have received autologous stem cell transplant and brentuximab vedotin.

In April, the European Commission (EC) approved Opdivo monotherapy for locally advanced or metastatic non-small cell lung cancer (NSCLC) after prior chemotherapy in adults. The approval expands Opdivo’s existing lung cancer indication in previously treated metastatic squamous NSCLC to include the non-squamous patient population. Opdivo is the only approved PD-1 immune checkpoint inhibitor to demonstrate superior OS in two separate Phase 3 trials in previously treated metastatic NSCLC, regardless of PD-L1 expression; one trial in squamous NSCLC (CheckMate -017) and the other in non-squamous NSCLC (CheckMate -057), which were the basis of this approval. The approval allows for the expanded marketing of Opdivo in previously treated metastatic NSCLC in all 28 Member States of the European Union.

In April, the EC approved Opdivo monotherapy for advanced renal cell carcinoma (RCC) after prior therapy in adults. Opdivo is the first and only PD-1 immune checkpoint inhibitor approved in Europe to demonstrate an OS benefit versus a standard of care in this patient population. The approval is based on the results of the Phase 3 study CheckMate -025, which evaluated Opdivo in patients with advanced clear-cell RCC who received prior anti-angiogenic therapy compared to everolimus. This approval allows for the expanded marketing of Opdivo in previously treated advanced RCC in all 28 Member States of the European Union.

In April, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended the approval of Opdivo in combination with Yervoy for the treatment of advanced (unresectable or metastatic) melanoma in adults. This CHMP recommendation will now be reviewed by the EC, which has the authority to approve medicines for the European Union.

In April, the company announced results from three studies for Opdivo and the Opdivo + Yervoy Regimen:
CheckMate -141: In this Phase 3 open-label, randomized trial, evaluating Opdivo in patients with recurrent or metastatic SCCHN after platinum therapy compared to investigator’s choice of therapy, Opdivo met the primary endpoints and demonstrated statistically significant OS versus three standards of care (cetuximab, docetaxel, or methotrexate). In the trial, patients treated with Opdivo had a one-year survival rate of 36% compared to 16.6% for investigator’s choice, and experienced a 30% reduction in the risk of death. Median OS was 7.5 months for Opdivo compared to 5.1 months for investigator’s choice. The safety profile of Opdivo in CheckMate -141 was consistent with prior studies, with no new safety signals identified.

CheckMate -069: In this Phase 2 trial, which is the first randomized study to evaluate the Opdivo + Yervoy combination regimen in patients with previously untreated advanced melanoma, the combination regimen demonstrated a two-year OS rate of 69% compared to 53% for Yervoy alone in patients with BRAF wild-type advanced melanoma. Similar results were observed in the overall study population, with an OS rate of 64% at two years for the combination regimen compared to 54% for Yervoy alone. A change in tumor burden was also seen with the combination regimen, with a median change of 70% compared to 5% for Yervoy alone. Overall survival was an exploratory endpoint in this trial. The safety profile of the Opdivo + Yervoy combination regimen in this study was consistent with previously reported studies.

CA209-003: In this Phase 1 study, evaluating Opdivo monotherapy in heavily pretreated advanced melanoma, the company reported extended follow-up, including five-year OS rates. This data represents the longest survival follow-up of patients who received an anti-PD-1 therapy in a clinical trial. At five years, Opdivo demonstrated a durable and consistent survival benefit with an OS rate of 34%, with an evident plateau in survival at approximately 4 years. The safety profile of Opdivo in Study 003 was similar to previously reported studies, with no new safety signals identified.

In March, the EMA validated a type II variation application, which seeks to extend the current indications for Opdivo to include the treatment of patients with cHL after prior therapies. The application included data from CheckMate -205, a Phase 2 study which evaluated Opdivo in cHL patients who have received autologous stem cell transplant and brentuximab vedotin. Validation of the application confirms the submission is complete and begins the EMA’s centralized review process.
Empliciti

In January, the company and its partner, AbbVie, Inc., announced the CHMP adopted a positive opinion recommending Empliciti, an investigational immunostimulatory antibody, be granted approval for the treatment of multiple myeloma as combination therapy with Revlimid and dexamethasone in patients who have received at least one prior therapy. The application will now be reviewed by the EC, which has the authority to approve medicines for the European Union. The CHMP positive opinion is based on data from the Phase 3, open-label ELOQUENT-2 study, which evaluated Empliciti in combination with lenalidomide and dexamethasone (ERd) versus lenalidomide and dexamethasone (Rd) alone.
Daklinza

In February, the FDA approved Daklinza, an NS5A replication complex inhibitor, in combination with sofosbuvir (with or without ribavirin) in genotypes 1 and 3. The expanded label includes data in three additional challenging-to-treat patient populations: chronic hepatitis C virus (HCV) patients with HIV-1 (human immunodeficiency virus) coinfection, advanced cirrhosis, or post-liver transplant recurrence of HCV. The Daklinza plus sofosbuvir regimen is also available for the treatment of chronic HCV genotype 3, and is currently the only 12-week, once-daily all-oral treatment option for these patients. The approval is based on data evaluating the Daklinza regimens from the Phase 3 ALLY-1 and ALLY-2 clinical trials.

In February, the company announced results from the first completed all-oral chronic HCV regimen Phase 3 trial that includes a Chinese patient population. In the study, which evaluated Daklinza in combination with asunaprevir for 24 weeks in Asian (non-Japanese) patients with genotype 1b HCV, 91% of patients from China achieved sustained virologic response at post-treatment week 24 (SVR24), which rose to 98% of patients without NS5A resistance-associated variants (RAVs) at baseline. SVR24 results were similarly high across all subgroups with genotype 1b HCV, including those with cirrhosis, and patients from Korea and Taiwan. SVR24 rates were also higher in all patients without baseline NS5A RAVs, regardless of the presence or absence of cirrhosis, and lower in patients with baseline NS5A RAVs. Results were presented at the Asian Pacific Association for the Study of the Liver Conference in Tokyo.

In January, the EC approved Daklinza for the treatment of chronic HCV in three new patient populations which provides additional treatment options for multiple HCV patient populations, including difficult-to-treat patients with decompensated cirrhosis. The expanded label allows for the use of Daklinza in combination with sofosbuvir (with or without ribavirin, depending on the indication and HCV genotype) in HCV patients with decompensated cirrhosis, HIV-1 coinfection, and post-liver transplant recurrence of HCV. The approval is based on data from the Phase 3 ALLY-2 and ALLY-2 clinical trials.
Revlimid is a trademark of Celgene Corporation.

BUSINESS DEVELOPMENT UPDATE

In April, the company acquired Padlock Therapeutics, Inc. (Padlock), a private, Cambridge, Massachusetts-based biotechnology company dedicated to creating new medicines to treat destructive autoimmune diseases. The acquisition gives the company full rights to Padlock’s Protein/Peptidyl Arginine Deiminase (PAD) inhibitor discovery program focused on the development of potentially transformational treatment approaches for patients with rheumatoid arthritis. Padlock’s PAD discovery program may have additional utility in treating systemic lupus erythematosus and other autoimmune diseases.

In March, the company entered into an agreement with LabCentral, an innovative, shared laboratory space designed as a launch pad for life-sciences and biotech startup companies, to become a LabCentral platinum sponsor. The company can nominate up to two innovative life-sciences and biotech startup companies per year to take up residence in LabCentral’s Kendall Square facilities.
In February, the company and its partner, Pfizer Inc., announced a collaboration agreement with Portola Pharmaceuticals Inc. to develop and commercialize the investigational agent andexanet alfa in Japan. Andexanet alfa, which is in Phase 3 clinical development in the U.S. and Europe, is designed to reverse the anticoagulant activity of Factor Xa inhibitors, including Eliquis. This agreement builds on the companies’ existing clinical collaboration to develop andexanet alfa in the U.S. and Europe.

In February, the company entered into a research collaboration agreement with the Dana-Farber Cancer Institute as part of the Immuno-Oncology Rare Population Malignancy (I-O RPM) program in the U.S. As part of the I-O RPM program, the company and the Dana-Farber Cancer Institute will conduct a range of early phase clinical studies and Bristol-Myers Squibb will support the training of young investigators who contribute to the I-O RPM program at Dana-Farber.

In February, the company completed the previously announced sale of its HIV R&D portfolio to ViiV Healthcare. The sale included a number of programs at different stages of discovery, preclinical and clinical development. The agreements with ViiV Healthcare do not impact the company’s marketed HIV medicines, including Reyataz, Evotaz, Sustiva and Atripla.
2016 FINANCIAL GUIDANCE

Bristol-Myers Squibb is increasing its 2016 GAAP EPS guidance range from $2.30 – $2.40 to $2.37 – $2.47. The company is also increasing its non-GAAP EPS guidance range from $2.30 – $2.40 to $2.50 – $2.60. Both GAAP and non-GAAP guidance assume current exchange rates. Key revised 2016 non-GAAP guidance assumptions include:

Worldwide revenues increasing in the low-double digit range.
Marketing, sales and administrative expenses decreasing in the low-single digit range.
Research and development expenses increasing in the low-double digit range.
The financial guidance for 2016 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 2016 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.

Use of Non-GAAP Financial Information

This press release contains non-GAAP financial measures, including non-GAAP earnings and related earnings per share information. These measures are adjusted to exclude certain costs, expenses, significant gains and losses and other specified items. Among the items in GAAP measures but excluded for purposes of determining adjusted earnings and other adjusted measures are: restructuring and other exit costs; accelerated depreciation charges; IPRD and asset impairments; charges and recoveries relating to significant legal proceedings; charges related to licenses and acquisitions of investigational compounds that have not achieved regulatory approval which are immediately expensed; pension charges; and significant tax events. This information is intended to enhance an investor’s overall understanding of the company’s past financial performance and prospects for the future. Non-GAAP financial measures provide the company and its investors with an indication of the company’s baseline performance before items that are considered by the company not to be reflective of the company’s ongoing results. The company uses non-GAAP gross profit, non-GAAP marketing, selling and administrative expense, non-GAAP research and development expense, and non-GAAP other income and expense measures to set internal budgets, manage costs, allocate resources, and plan and forecast future periods. Non-GAAP effective tax rate measures are primarily used to plan and forecast future periods. Non-GAAP earnings and earnings per share measures are primary indicators the company uses as a basis for evaluating company performance, setting incentive compensation targets, and planning and forecasting of future periods. This information is not intended to be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP.