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Bristol-Myers Squibb Reports Second Quarter Financial Results

July 25, 2019 6:59 AM

NEW YORK--(BUSINESS WIRE)-- Bristol-Myers Squibb Company (NYSE: BMY) today reported results for the second quarter of 2019, which were highlighted by strong sales for Eliquis (apixaban) and Opdivo (nivolumab) and a robust operating performance across the portfolio.

“We had a very good second quarter where we delivered strong financial results while also advancing our integration planning for the acquisition of Celgene,” said Giovanni Caforio, M.D., chairman and chief executive officer, Bristol-Myers Squibb. “Through strong commercial execution and financial discipline we are establishing a solid foundation from which we can build the leading biopharma company, well-positioned to address the unmet needs of our patients and create long-term shareholder value.”

Second Quarter

$ amounts in millions, except per share amounts

2019

2018

Change

Total Revenues

$6,273

$5,704

10%

GAAP Diluted EPS

0.87

0.23

**

Non-GAAP Diluted EPS

1.18

1.01

17%

**In excess of +/- 100%

SECOND QUARTER FINANCIAL RESULTS

ACQUISITION OF CELGENE CORPORATION

OTEZLA® is a trademark of Celgene Corporation.

SECOND QUARTER PRODUCT AND PIPELINE UPDATE

Product Sales/Business Highlights

Global revenues for the second quarter of 2019, compared to the second quarter of 2018, were driven by:

Opdivo

Clinical

Orencia

Clinical

Empliciti

Clinical

SECOND QUARTER BUSINESS DEVELOPMENT UPDATE

Stivarga® is a trademark of Bayer.

2019 FINANCIAL GUIDANCE

Bristol-Myers Squibb is decreasing its 2019 GAAP EPS guidance range from $3.84 - $3.94 to $3.73- $3.83 and increasing its non-GAAP EPS guidance range from $4.10 - $4.20 to $4.20 - $4.30. Both GAAP and non-GAAP guidance assume current exchange rates. Key revised 2019 GAAP and non-GAAP line-item guidance assumptions are:

The financial guidance for 2019 excludes the impact of any potential future strategic acquisitions and divestitures, including any impact of the pending Celgene acquisition other than expenses incurred in 2019, and any specified items that have not yet been identified and quantified. The non-GAAP 2019 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.

Guidance inclusive of the Celgene acquisition will be provided after the close of the transaction.

Use of Non-GAAP Financial Information

This earnings 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 acquisition and integration expenses, restructuring costs, accelerated depreciation and impairment of property, plant and equipment and intangible assets, R&D charges or other income resulting from up-front or contingent milestone payments in connection with the acquisition or licensing of third-party intellectual property rights, divestiture gains or losses, pension, legal and other contractual settlement charges, interest expense on the new notes issued in May 2019 in connection with our pending acquisition of Celgene and interest income earned on the net proceeds of the notes 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 the company’s baseline performance, supplement or enhance management, analysts and investors overall understanding of the company’s underlying financial performance and facilitate comparisons among current, past and future periods. For example, non-GAAP earnings and EPS information is an indication of the company’s baseline performance before items that are considered by us to not be reflective of the company’s ongoing results. In addition, this information is among the primary indicators that 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 and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted.

Company and Conference Call Information

Bristol-Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information about Bristol-Myers Squibb, visit us at BMS.com or follow us on LinkedIn, Twitter, YouTube and Facebook. For more information about Bristol-Myers Squibb's pending acquisition of Celgene, please visit https://bestofbiopharma.com.

There will be a conference call on July 25, 2019 at 8:30 a.m. ET during which company executives will review financial information and address inquiries from investors and analysts. Investors and the general public are invited to listen to a live webcast of the call at http://investor.bms.com or by calling the U.S. toll free 888-254-3590 or international 323-994-2093, confirmation code: 9333832. Materials related to the call will be available at the same website prior to the conference call. A replay of the call will be available beginning at 11:45 a.m. ET on July 25, 2019 through 11:45 a.m. ET on August 8, 2019. The replay will also be available through http://investor.bms.com or by calling the U.S. toll free 888-203-1112 or international 719-457-0820, confirmation code: 9333832.

Website Information

We routinely post important information for investors on our website, BMS.com, in the “Investors” section. We may use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investors section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. We may also use social media channels to communicate with our investors and the public about our company, our products and other matters, and those communications could be deemed to be material information. The information contained on, or that may be accessed through, our website or social media channels are not incorporated by reference into, and are not a part of, this document.

Cautionary Statement Regarding Forward-Looking Statements

This earnings release and the related attachments (as well as the oral statements made with respect to information contained in this release and the attachments) contain certain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, 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 they use words such as “should,” “could,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe,” “will” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance, although not all forward-looking statements contain such terms. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements are likely to relate to, among other things, the company’s ability to execute successfully its strategic plans, including its business development strategy generally and in relation to its ability to complete the financing transactions in connection with and to realize the projected benefits of the company’s pending acquisition of Celgene, 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. No forward-looking statement can be guaranteed, including that the company’s future clinical studies will support the data described in this release, product candidates will receive necessary clinical and manufacturing regulatory approvals, pipeline products will prove to be commercially successful, clinical and manufacturing regulatory approvals will be sought or obtained within currently expected timeframes or contractual milestones will be achieved.

Such forward-looking statements are based on historical performance and current expectations and projections about the company’s future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years, that are difficult to predict, may be beyond the company’s control and could cause the company’s future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. Such risks, uncertainties and other matters include, but are not limited to, challenges inherent in new product development, including obtaining and maintaining regulatory approval; competitive developments affecting current products; difficulties and delays in product introduction and commercialization; industry competition from other manufacturers; the company’s ability to obtain and protect market exclusivity rights and enforce patents and other intellectual property rights; the risk of an adverse patent litigation decision or settlement and exposure to other litigation and/or regulatory actions; pricing controls and pressures (including changes in rules and practices of managed care organizations and institutional and governmental purchasers); the impact of any U.S. healthcare reform and legislation or regulatory action in the U.S. and markets outside the U.S. affecting pharmaceutical product pricing, reimbursement or access; changes in tax law and regulations, including the impact of the Tax Cuts and Jobs Act of 2017 and related guidance; any significant issues that may arise related to the company’s joint ventures and other third-party business arrangements; the company’s ability to execute its financial, strategic and operational plans or initiatives; the ability to attract and retain key personnel; the company’s ability to identify potential strategic acquisitions or transactions and successfully realize the expected benefits of such transactions, including with respect to the pending acquisition of Celgene; the conditions to closing the Celgene transaction will be satisfied and, if the transaction closes, the company’s ability to successfully integrate Celgene, manage the impact of the company’s increased indebtedness, achieve anticipated synergies and effectively address any risks that Celgene currently faces, including the loss of patent protection for any of its commercialized products and the failure to obtain approvals for its pipeline products; difficulties or delays in manufacturing, distribution or sale of products, including without limitation, interruptions caused by damage to the company’s and the company’s suppliers’ manufacturing sites; regulatory decisions impacting labeling, manufacturing processes and/or other matters; the impact on the company’s competitive position from counterfeit or unregistered versions of its products or stolen products; the adverse impact of cyber-attacks on the company’s information systems or products, including unauthorized disclosure of trade secrets or other confidential data stored in the company’s information systems and networks; political and financial instability of international economies and sovereign risk; and issuance of new or revised accounting standards.

Forward-looking statements in this earnings release should be evaluated together with the many risks and uncertainties that affect the company’s business and market, particularly those identified in the cautionary statement and risk factors discussion in the company’s Annual Report on Form 10-K for the year ended December 31, 2018, as updated by the company’s subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission. The forward-looking statements included in this document are made only as of the date of this document and except as otherwise required by applicable law, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise.

BRISTOL-MYERS SQUIBB COMPANY
PRODUCT REVENUES
FOR THE THREE MONTHS ENDED JUNE 30, 2019 AND 2018
(Unaudited, dollars in millions)

Worldwide Revenues

U.S. Revenues(b)

2019

2018

%
Change

2019

2018

%
Change

Prioritized Brands

Opdivo

$

1,823

$

1,627

12

%

$

1,112

$

1,024

9

%

Eliquis

2,042

1,650

24

%

1,269

979

30

%

Orencia

778

711

9

%

566

501

13

%

Sprycel

544

535

2

%

307

310

(1

)%

Yervoy

367

315

17

%

253

228

11

%

Empliciti

91

64

42

%

63

41

54

%

Established Brands

Baraclude

147

179

(18

)%

7

9

(22

)%

Other Brands(a)

481

623

(23

)%

90

138

(35

)%

Total

$

6,273

$

5,704

10

%

$

3,667

$

3,230

14

%

(a)

Includes Sustiva, Reyataz, Daklinza and all other products that lost exclusivity in major markets, over-the-counter brands and royalty revenue.

(b)

Includes United States and Puerto Rico.

BRISTOL-MYERS SQUIBB COMPANY
PRODUCT REVENUES
FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(Unaudited, dollars in millions)

Worldwide Revenues

U.S. Revenues(b)

2019

2018

%
Change

2019

2018

%
Change

Prioritized Brands

Opdivo

$

3,624

$

3,138

15

%

$

2,236

$

1,962

14

%

Eliquis

3,967

3,156

26

%

2,475

1,864

33

%

Orencia

1,418

1,304

9

%

1,015

886

15

%

Sprycel

1,003

973

3

%

547

524

4

%

Yervoy

751

564

33

%

528

390

35

%

Empliciti

174

119

46

%

121

78

55

%

Established Brands

Baraclude

288

404

(29

)%

14

19

(26

)%

Other Brands(a)

968

1,239

(22

)%

180

285

(37

)%

Total

$

12,193

$

10,897

12

%

$

7,116

$

6,008

18

%

(a)

Includes Sustiva, Reyataz, Daklinza and all other products that lost exclusivity in major markets, over-the-counter brands and royalty revenue.

(b)

Includes United States and Puerto Rico.

BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(Unaudited, dollars and shares in millions except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

Net product sales

$

6,031

$

5,461

$

11,744

$

10,433

Alliance and other revenues

242

243

449

464

Total Revenues

6,273

5,704

12,193

10,897

Cost of products sold

1,992

1,625

3,836

3,209

Marketing, selling and administrative

1,076

1,131

2,082

2,111

Research and development

1,328

2,435

2,679

3,685

Other income (net)

101

(4

)

(159

)

(404

)

Total Expenses

4,497

5,187

8,438

8,601

Earnings Before Income Taxes

1,776

517

3,755

2,296

Provision for Income Taxes

337

135

601

419

Net Earnings

1,439

382

3,154

1,877

Noncontrolling Interest

7

9

12

18

Net Earnings Attributable to BMS

$

1,432

$

373

$

3,142

$

1,859

Average Common Shares Outstanding:

Basic

1,636

1,633

1,635

1,633

Diluted

1,637

1,636

1,637

1,638

Earnings per Common Share

Basic

$

0.88

$

0.23

$

1.92

$

1.14

Diluted

0.87

0.23

1.92

1.13

Other income (net)

Interest expense

$

123

$

45

$

168

$

91

Investment income

(119

)

(38

)

(175

)

(74

)

Equity investment (gains)/losses

(71

)

356

(246

)

341

Provision for restructuring

10

37

22

57

Acquisition expenses

303

—

468

—

Integration expenses

106

—

128

—

Litigation and other settlements

—

(1

)

1

(1

)

Equity in net income of affiliates

—

(27

)

—

(51

)

Divestiture losses/(gains)

8

(25

)

8

(70

)

Royalties and licensing income

(303

)

(353

)

(611

)

(720

)

Transition and other service fees

(2

)

(1

)

(4

)

(5

)

Pension and postretirement

26

(19

)

70

(30

)

Intangible asset impairment

15

—

15

64

Other

5

22

(3

)

(6

)

Other income (net)

$

101

$

(4

)

$

(159

)

$

(404

)

BRISTOL-MYERS SQUIBB COMPANY
SPECIFIED ITEMS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(Unaudited, dollars in millions)

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

Impairment charges

$

109

$

—

$

109

$

10

Accelerated depreciation and other shutdown costs

30

14

42

17

Cost of products sold

139

14

151

27

Marketing, selling and administrative

—

—

1

1

License and asset acquisition charges

25

1,075

25

1,135

IPRD impairments

—

—

32

—

Site exit costs and other

19

19

38

39

Research and development

44

1,094

95

1,174

Interest expense

83

—

83

—

Investment income

(54

)

—

(54

)

—

Equity investment (gains)/losses

(71

)

356

(246

)

341

Provision for restructuring

10

37

22

57

Acquisition expenses

303

—

468

—

Integration expenses

106

—

128

—

Divestiture losses/(gains)

8

(25

)

8

(68

)

Royalties and licensing income

—

(25

)

—

(75

)

Pension and postretirement

44

37

93

68

Intangible asset impairment

—

—

—

64

Other income (net)

429

380

502

387

Increase to pretax income

612

1,488

749

1,589

Income taxes on items above

(105

)

(218

)

(148

)

(226

)

Income taxes attributed to U.S. tax reform

—

3

—

(29

)

Income taxes

(105

)

(215

)

(148

)

(255

)

Increase to net earnings

$

507

$

1,273

$

601

$

1,334

BRISTOL-MYERS SQUIBB COMPANY
RECONCILIATION OF CERTAIN GAAP LINE ITEMS TO CERTAIN NON-GAAP LINE ITEMS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(Unaudited, dollars in millions)

Three Months Ended June 30, 2019

Six Months Ended June 30, 2019

GAAP

Specified
Items(a)

Non-
GAAP

GAAP

Specified
Items(a)

Non-
GAAP

Gross Profit

$

4,281

$

139

$

4,420

$

8,357

$

151

$

8,508

Marketing, selling and administrative

1,076

—

1,076

2,082

(1

)

2,081

Research and development

1,328

(44

)

1,284

2,679

(95

)

2,584

Other income (net)

101

(429

)

(328

)

(159

)

(502

)

(661

)

Earnings Before Income Taxes

1,776

612

2,388

3,755

749

4,504

Provision for Income Taxes

337

(105

)

442

601

(148

)

749

Noncontrolling interest

7

—

7

12

—

12

Net Earnings Attributable to BMS used for Diluted EPS Calculation

$

1,432

$

507

$

1,939

$

3,142

$

601

$

3,743

Average Common Shares Outstanding - Diluted

1,637

1,637

1,637

1,637

1,637

1,637

Diluted Earnings Per Share

$

0.87

$

0.31

$

1.18

$

1.92

$

0.37

$

2.29

Effective Tax Rate

19.0

%

(0.5

)%

18.5

%

16.0

%

0.6

%

16.6

%

Three Months Ended June 30, 2018

Six Months Ended June 30, 2018

GAAP

Specified
Items(a)

Non-
GAAP

GAAP

Specified

Items(a)

Non-

GAAP

Gross Profit

$

4,079

$

14

$

4,093

$

7,688

$

27

$

7,715

Marketing, selling and administrative

1,131

—

1,131

2,111

(1

)

2,110

Research and development

2,435

(1,094

)

1,341

3,685

(1,174

)

2,511

Other income (net)

(4

)

(380

)

(384

)

(404

)

(387

)

(791

)

Earnings Before Income Taxes

517

1,488

2,005

2,296

1,589

3,885

Provision for Income Taxes

135

(215

)

350

419

(255

)

674

Noncontrolling interest

9

—

9

18

—

18

Net Earnings Attributable to BMS used for Diluted EPS Calculation

$

373

$

1,273

$

1,646

$

1,859

$

1,334

$

3,193

Average Common Shares Outstanding - Diluted

1,636

1,636

1,636

1,638

1,638

1,638

Diluted Earnings Per Share

$

0.23

$

0.78

$

1.01

$

1.13

$

0.82

$

1.95

Effective Tax Rate

26.1

%

(8.6

)%

17.5

%

18.2

%

(0.9

)%

17.3

%

(a)

Refer to the Specified Items schedule for further details. Effective tax rate on the Specified Items represents the difference between the GAAP and Non-GAAP effective tax rate.

BRISTOL-MYERS SQUIBB COMPANY
NET CASH/(DEBT) CALCULATION
AS OF JUNE 30, 2019 AND DECEMBER 31, 2018
(Unaudited, dollars in millions)

June 30,
2019

December 31,
2018

Cash and cash equivalents

$

28,404

$

6,911

Marketable securities - current

953

1,973

Marketable securities - non-current

994

1,775

Cash, cash equivalents and marketable securities

30,351

10,659

Short-term debt obligations

(545

)

(1,703

)

Long-term debt

(24,433

)

(5,646

)

Net cash position

$

5,373

$

3,310

Media: Carrie Fernandez, 609-252-5222, [email protected];

Investor Relations: John Elicker, 609-252-4611, [email protected] or Tim Power, 609-252-7509, [email protected]

Source: Bristol-Myers Squibb Company

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