On April 29, 2022 Bristol Myers Squibb (NYSE:BMY) reported that results for the first quarter of 2022, which reflect robust in-line product growth, increased adoption of new product portfolio and strong commercial execution (Press release, Bristol-Myers Squibb, APR 29, 2022, View Source [SID1234613207]).

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"We continue to execute against our strategic priorities, deliver solid revenue and earnings growth and advance our product pipeline," said Giovanni Caforio, M.D., board chair and chief executive officer, Bristol Myers Squibb. "Thanks to our team’s hard work and dedication, we achieved regulatory approvals of Opdualag and Camzyos, our new first-in-class medicines for patients living with metastatic melanoma and symptomatic obstructive hypertrophic cardiomyopathy, respectively. These milestone achievements, combined with our promising product pipeline and strong financial flexibility, provide a solid foundation that will enable us to deliver sustained growth and long-term benefits for our patients."

1 Acquired IPRD refers to certain in-process research and development ("Acquired IPRD") charges resulting from upfront or contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights.

First Quarter

$ amounts in millions, except per share amounts

* In the first quarter of 2022, GAAP and non-GAAP earnings per share include a net impact of ($0.10) per share due to Acquired IPRD charges that were partially offset by licensing income

FIRST QUARTER FINANCIAL RESULTS

All comparisons are made versus the same period in 2021 unless otherwise stated.

Bristol Myers Squibb posted first quarter revenues of $11.6 billion, an increase of 5%, driven by in-line products (primarily Eliquis and Opdivo) and new product portfolio (primarily cell therapy products and Reblozyl), partially offset by Recent LOE Products (Revlimid and Abraxane) and foreign exchange impacts.
U.S. revenues increased 10% to $7.7 billion in the quarter. International revenues decreased 3% to $4.0 billion in the quarter. When adjusted for foreign exchange impact, international revenues increased 3%, driven by in-line products (primarily Eliquis and Opdivo).
Gross margin increased from 74.3% to 78.8% in the quarter primarily due to an impairment charge related to marketed product rights in the same period of last year and foreign exchange. On a non-GAAP basis, gross margin increased from 78.1% to 79.2% in the quarter primarily driven by foreign exchange.
Marketing, selling and administrative expenses increased 10% to $1.8 billion in the quarter on a GAAP and non-GAAP basis primarily due to differences of timing of spend compared to the prior year as well as investments in our product portfolio.
Research and development expenses increased 2% to $2.3 billion in the quarter primarily due to an in-process research and development ("IPRD") impairment charge, partially offset by timing of spend. On a non-GAAP basis, research and development expenses decreased 4% to $2.1 billion in the quarter primarily due to timing of spend compared to the prior year.
Acquired IPRD increased to $333 million in the quarter primarily due to up-front and milestone charges relating to the Dragonfly and Immatics licensing arrangements.
Amortization of acquired intangible assets decreased 4% to $2.4 billion in the quarter primarily due to a longer than previously expected market exclusivity period for Pomalyst.
The GAAP effective tax rate changed from 19.8% to 23.9% in the quarter primarily due to the non-taxable contingent value rights related income in the prior period. The non-GAAP effective tax rate changed from 16.8% to 15.9% in the quarter primarily due to jurisdictional earnings mix.
The company reported net earnings attributable to Bristol Myers Squibb of $1.3 billion, or $0.59 per share, in the first quarter, compared to $2.0 billion, or $0.89 per share, for the same period a year ago. In addition to the items discussed above, the results include the impact of fair value adjustments on equity investments and contingent value rights in both periods.
The company reported non-GAAP net earnings attributable to Bristol Myers Squibb of $4.2 billion, or $1.96 per share, in the first quarter, compared to non-GAAP net earnings of $4.0 billion, or $1.74 per share, for the same period a year ago. In addition to the items discussed above, the results in the current period included the impact of lower weighted-average common shares outstanding.
Beginning with the first quarter of 2022, 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 are no longer excluded from non-GAAP results. These R&D charges that were previously specified are now presented in a new financial statement line item labeled Acquired IPRD. In the first quarter of 2022, GAAP and non-GAAP earnings per share include a net impact of ($0.10) per share due to Acquired IPRD charges that were partially offset by licensing income. For purposes of comparability, the non-GAAP financial results for the first quarter of 2021 have been updated to reflect this change. A discussion of the non-GAAP financial measures is included under the "Use of Non-GAAP Financial Information" section.

FIRST QUARTER PRODUCT REVENUE HIGHLIGHTS

* In excess of +100%
** Includes products that have lost exclusivity in major markets, over-the-counter (OTC) products, royalty revenue and other mature products.

REVENUE HIGHLIGHTS

In-Line Products

Revenues for in-line products in the first quarter were $8.3 billion compared to $7.7 billion in the prior year period, representing an increase of 8%. In-line products revenue was largely driven by:

Eliquis revenues, which grew 11% compared to the prior year period. U.S. revenues were $2.1 billion compared to $1.9 billion in the prior year period, representing an increase of 12% driven by higher volume. International revenues were $1.1 billion compared to $963 million in the prior year period, representing an increase of 10% driven by higher demand, partially offset by foreign exchange.
Opdivo revenues increased 12% compared to the prior year period. U.S. revenues were $1.1 billion compared to $944 million in the prior year period, representing an increase of 16% driven by higher demand across multiple indications including the Opdivo+Yervoy based combinations for non-small cell lung cancer (NSCLC), Opdivo+Cabometyx combination for kidney cancer, and Opdivo-based therapies for various gastric and esophageal cancers, partially offset by declining second-line eligibility across tumor and increased competition. International revenues were $824 million compared to $776 million, representing an increase of 6% driven by higher demand as a result of launches for additional indications and core indications, partially offset by foreign exchange.
New Product Portfolio

New product portfolio revenues grew to $350 million compared to $161 million to the prior year period, driven by higher demand primarily relating to Abecma, Breyanzi and Reblozyl.

Recent LOE Products

Revlimid revenues declined by 5% compared to the prior year period. U.S. revenues increased 4% to $2.0 billion as compared to the prior year period driven by higher volume. International revenues were $759 million compared to $986 million in the prior year period, representing a decrease of 23% driven by generic erosion across several EU countries and Canada and foreign exchange.
Abraxane revenues declined 32% compared to the prior year period. U.S. revenues were $173 million compared to $225 million in the prior year period, representing a 23% decline driven by lower demand, primarily due to manufacturing delays.
PRODUCT AND PIPELINE UPDATE

Cardiovascular

Category

Asset

Milestone

Regulatory

CamzyosTM

The U.S. Food & Drug Administration (FDA) approved CamzyosTM (mavacamten) for the treatment of adults with symptomatic New York Heart Association (NYHA) class II-III obstructive hypertrophic cardiomyopathy (obstructive HCM) to improve functional capacity and symptoms. Camzyos is the first and only FDA-approved allosteric and reversible inhibitor selective for cardiac myosin that targets the underlying pathophysiology of obstructive HCM. The approval was based on the Phase 3 EXPLORER-HCM trial.

Clinical & Research

Camzyos

Interim results from the EXPLORER-LTE cohort of the MAVA-LTE trial showed sustained improvements in cardiovascular outcomes at 48 and 84 weeks among patients with symptomatic obstructive hypertrophic cardiomyopathy (oHCM) who were treated with Camzyos.

Results from the Phase 3 VALOR-HCM trial showed that the study met its primary and secondary endpoints, significantly reducing the need for septal reduction therapy (SRT) in patients with severely symptomatic oHCM who had been appropriate for SRT per the 2011 American College of Cardiology/American Heart Association Guidelines at baseline, after 16 weeks of treatment with Camzyos.

Oncology

Category

Asset

Milestone

Regulatory

Opdivo (nivolumab)

The European Commission (EC) approved Opdivo in combination with Yervoy for the first-line treatment of adult patients with unresectable advanced, recurrent or metastatic esophageal squamous cell carcinoma with tumor cell PD-L1 expression ≥ 1%. The EC also approved Opdivo in combination with fluoropyrimidine and platinum-based chemotherapy for the same indication. The approvals were based on data from the Phase 3 CheckMate -648 trial.

The EC approved Opdivo for the adjuvant treatment of adults with high-risk muscle-invasive urothelial carcinoma with PD-L1 expression ≥1%, based on the Phase 3 CheckMate -274 trial. Opdivo is the first immunotherapy approved for these patients.

The FDA approved Opdivo 360 mg (injection for intravenous use) in combination with platinum-doublet chemotherapy for the treatment of certain patients with resectable non-small cell lung cancer (NSCLC) in the neoadjuvant setting, based on the Phase 3 CheckMate -816 trial. This marks the first immunotherapy-based treatment approved in this setting. An application for this indication was also validated by the European Medicines Agency.

OpdualagTM

(nivolumab and relatlimab-rmbw)

The FDA approved Opdualag, a new, first-in-class, fixed-dose combination of nivolumab and relatlimab, a novel LAG-3 inhibitor, for the treatment of adult and pediatric patients 12 years of age or older with unresectable or metastatic melanoma, based on the Phase 2/3 RELATIVITY-047 trial.

Clinical & Research

Opdivo

Results from the Phase 3 CheckMate -816 trial showed that neoadjuvant treatment with Opdivo in combination with chemotherapy significantly improved event-free survival compared to chemotherapy alone in patients with resectable NSCLC.

Two-year follow-up results from the Phase 3 CheckMate -9ER trial demonstrated sustained survival, response rate benefits and health-related quality of life improvements with Opdivo combined with cabozantinib versus sunitinib in the first-line treatment of advanced renal cell carcinoma.

bempegaldesleu-kin

Phase 3 PIVOT IO-001 trial did not meet its primary endpoints of progression-free survival and objective response rate in patients with previously untreated unresectable or metastatic melanoma who were treated with bempegaldesleukin in combination with Opdivo compared to Opdivo monotherapy. The trial was conducted in collaboration with Nektar Therapeutics (NASDAQ: NKTR).

Based upon subsequent results from pre-planned analyses of two late-stage clinical studies in renal cell carcinomaand bladder cancer, coupled with the results of the PIVOT IO-001 trial in metastatic melanoma, BMS and Nektar have jointly decided to end the global clinical development program for bempegaldesleukin in combination with Opdivo.

Hematology

Category

Asset

Milestone

Regulatory

Breyanzi

(lisocabtagene maraleucel)

The EC approved Breyanzi for the treatment of adult patients with relapsed or refractory (R/R) diffuse large B-cell lymphoma, primary mediastinal large B-cell lymphoma, and follicular lymphoma grade 3B after two or more lines of systemic therapy. The approval is based on results from the TRANSCEND WORLD and TRANSCEND NHL 001 trials.

The FDA accepted for priority review the supplemental Biologics License Application (sBLA) to expand its current indication to include earlier use of Breyanzi for the treatment of adults with relapsed or refractory large B-cell lymphoma after failure of first-line therapy. The FDA assigned a PDUFA goal date of June 24, 2022. The sBLA is based on results from the Phase 3 TRANSFORM trial.

Reblozyl

(luspatercept-aamt)

The FDA extended the review of the sBLA for Reblozyl for the treatment of anemia in adults with non-transfusion-dependent beta thalassemia to June 27, 2022. The sBLA is based on results from the Phase 2 BEYOND trial.

Immunology

Category

Asset

Milestone

Clinical & Research

Zeposia (ozanimod)

Interim results from the Phase 3 True North open-label extension trial demonstrated that the percentage of patients achieving clinical remission, clinical response, endoscopic improvement and corticosteroid-free remission was maintained through Week 142 for patients with moderately to severely active ulcerative colitis who were treated with Zeposia.

Capital Allocation

The company continues to maintain a consistent, balanced approach to capital allocation focused on prioritizing investments for growth through business development along with reducing debt, commitment to dividend growth and share repurchase.

The Company extended the maturities of certain long-term debt (i) with the purchase of $6.0 billion of senior unsecured notes in March and April through tender offers and "make whole" redemptions and (ii) the issuance of $6.0 billion of additional senior unsecured notes maturing between 2032 and 2062.
In February, the company entered into accelerated share repurchase (ASR) transactions to repurchase $5 billion of Bristol Myers Squibb common stock. The company anticipates that these ASR transactions will be settled during the second and third quarters of 2022. (link)
Financial Guidance

Bristol Myers Squibb is adjusting its 2022 GAAP and non-GAAP line-item guidance as follows:

Guidance for Total Net Sales, Revlimid Sales and Recent LOE Sales, is being adjusted due to foreign exchange and faster erosion of Revlimid in International markets. The Company is also adjusting operating expenses due to foreign exchange as well as cost discipline.

GAAP and non-GAAP earnings per share include the net impact of Acquired IPRD & licensing income due to ($0.10) incurred in Q1 and an additional ($0.11) due to the buyout of a future royalty obligation related to mavacamten that occurred in April 2022. Excluding these adjustments, the outlook for non-GAAP EPS is unchanged.

Key 2022 GAAP and non-GAAP line-item guidance assumptions are:

1 Key LOE Products = Revlimid and Abraxane
2 Operating Expenses = MS&A and R&D, excluding IPRD and Amortization of acquired intangibles
3 Inclusive of net impact of ($0.21) of acquired IPRD and licensing income

The 2022 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. Both GAAP and non-GAAP guidance assume current exchange rates. The 2022 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.

Environmental, Social & Governance (ESG)

As a leading biopharma 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.

Conference Call Information

Bristol Myers Squibb will host a conference call today at 8 a.m. EDT 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 To be directly connected to the conference call, enter your information here; the link will be active 15 minutes prior to the scheduled start time of the call, and does not require a dial-in number or operator assistance to be connected.

Investors and the public can also access the live webcast by dialing in the U.S. toll free 866-409-1555 or international +1 786-789-4797, confirmation code: 5513095. 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 on 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. EDT on April 29 through 11:30 a.m. EDT on May 13, 2022, by dialing in the U.S. toll free 888-203-1112 or international +1 719-457-0820, confirmation code: 5513095.