Bristol-Myers Squibb Company (NYSE: BMY) today reported results for the third quarter of 2010. Highlights in the quarter included: the presentation of new data on investigational compounds in the diabetes and cardiovascular disease franchises at major medical meetings; the completion of important regulatory milestones in the oncology, diabetes and immunoscience franchises; the acquisition of ZymoGenetics; and double-digit EPS growth. The company also confirmed guidance for 2010.
“The third quarter continued to highlight the excellent progress we are making with our innovative pipeline, an important driver in the success of our differentiated and focused BioPharma strategy”
“The third quarter continued to highlight the excellent progress we are making with our innovative pipeline, an important driver in the success of our differentiated and focused BioPharma strategy,” said Lamberto Andreotti, chief executive officer, Bristol-Myers Squibb.
“We delivered double-digit EPS growth in the quarter, presented encouraging data on apixaban and dapagliflozin, received regulatory approval in Japan for ORENCIA®, and completed filings for regulatory review in the U.S., Europe and Japan. We also completed our acquisition of ZymoGenetics, adding to our strong portfolio in Hepatitis C and demonstrating our continued focus on strategic transactions,” Andreotti said.
THIRD QUARTER FINANCIAL RESULTS
- Bristol-Myers Squibb posted third quarter 2010 net sales of $4.8 billion. U.S. health care reform had a 1.6% negative effect on net sales in the third quarter.
- U.S. net sales increased 4% to $3.1 billion in the third quarter of 2010 compared to the same period in 2009. International net sales decreased 6%, or 3% excluding foreign exchange impact, to $1.7 billion.
- Gross margin as a percentage of net sales was 73.3% in the third quarter 2010 compared to 72.5% in the same period in 2009.
- Marketing, selling and administrative expenses decreased 6% to $892 million in the third quarter of 2010.
- Advertising and product promotion spending decreased 10% to $231 million in the third quarter of 2010.
- Research and development expenses remained flat at $824 million in the third quarter of 2010.
- The effective tax rate on earnings from continuing operations before income taxes was 19.3% in the third quarter of 2010, compared to 23.4% in the same period in 2009.
- The Company reported third quarter GAAP net earnings from continuing operations of $949 million, or $0.55 per share, compared to $892 million, or $0.45 per share, for the same period in 2009.
- The Company reported third quarter non-GAAP net earnings from continuing operations of $1.0 billion or, $0.59 per share, compared to $944 million, or $0.47 per share, for the same period in 2009. An overview of specified items is discussed under the “Use of Non-GAAP Financial Information” section.
- The impact of U.S. health care reform decreased third quarter EPS from continuing operations by approximately $0.02 on both a GAAP and non-GAAP basis.
- Cash, cash equivalents and marketable securities were $10.9 billion, resulting in a net cash position of $4.2 billion as of September 30, 2010.
THIRD QUARTER PRODUCT AND PIPELINE UPDATE
- Bristol-Myers Squibb’s global sales growth in the third quarter was led by PLAVIX® and the Company’s virology franchise. Sales of PLAVIX rose 7%, BARACLUDE® rose 19%, SUSTIVA® rose 9% and REYATAZ® rose 4%. Third quarter sales of SPRYCEL® and ORENCIA grew 35% and 14% respectively compared to the same period in 2009.
- In July, Japan’s Ministry of Health, Labour and Welfare approved the Japanese New Drug Application for ORENCIA for the treatment of rheumatoid arthritis.
- In July, the supplemental New Drug Application (sNDA) for SPRYCEL for the treatment of adult patients with newly diagnosed chronic myeloid leukemia was submitted in Japan. It is under active review.
- In July, the Marketing Authorization Application (MAA) for a fixed-dose combination of ONGLYZA™ and metformin tablets as a treatment for adults with type 2 diabetes was validated by the European Medicines Agency.
- In August, the U.S. Food and Drug Administration (FDA) accepted for filing and priority review the Biologics License Application (BLA) for ipilimumab for the treatment of adult patients with advanced melanoma. The Prescription Drug Fee User Act (PDUFA) date—the date by which action from the FDA is expected—is December 25, 2010.
- In August, at the European Society of Cardiology meeting in Stockholm, the Company and Pfizer presented preliminary data from the AVERROES trial comparing ELIQUIS® (apixaban) with aspirin for the prevention of stroke in patients with atrial fibrillation in patients who cannot take warfarin. Preliminary data from the trial demonstrate that apixaban significantly reduced the relative risk of a composite of stroke or systemic embolism by 54 percent compared with aspirin, without a significant increase in major bleeding.
- In September, at the European Association for the Study of Diabetes meeting in Stockholm, the Company and AstraZeneca presented data from two Phase III studies of dapagliflozin. Data from a 24-week study demonstrate that dapagliflozin improved glycosylated hemoglobin levels (HbA1c) when added to glimepiride in adults with type 2 diabetes, compared to glimepiride alone. Data from a 52-week study demonstrate that dapagliflozin plus metformin was similar to glipizide plus metformin in improving HbA1c in adults with type 2 diabetes. In addition, the data demonstrated that dapagliflozin plus metformin reduced total body weight, compared to increases in body weight reported with glipizide, and reduced the number of patients reporting one or more hypoglycemic events.
- In October, the FDA approved the sNDA for BARACLUDE for the treatment of chronic hepatitis B in adults with decompensated liver disease.
- In October, the Company received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) for SPRYCEL for the treatment of adult patients with newly diagnosed chronic myeloid leukemia.
BUSINESS DEVELOPMENT UPDATE
- In October, the Company acquired ZymoGenetics, Inc., the Seattle-based biotech company with which the Company had been collaborating on the development of pegylated-interferon lambda for the treatment of Hepatitis C infection since January 2009.
The Company reaffirms its 2010 GAAP EPS guidance range of $1.84 to $1.94 per share and its non-GAAP guidance range of $2.10 to $2.20 per share. Key 2010 non-GAAP guidance assumptions include: low-to-mid single-digit revenue growth; full-year gross margin being consistent with last year; advertising and promotion expense decrease in the low double-digit range; marketing, sales and administrative expenses remaining flat; research and development expense growth in the mid single-digit range; and an effective tax rate of between 23% and 24%.
The financial guidance for 2010 excludes the impact of any potential future strategic transactions and specified items that have not yet been identified and quantified. The non-GAAP 2010 guidance also excludes other specified items such as gains or losses from sale of businesses and product lines; from sale of equity investments and from discontinued operations; restructuring and other exit costs; accelerated depreciation charges; asset impairments; charges and recoveries relating to significant legal proceedings; upfront and milestone payments for licensing arrangements; and debt retirement costs.
Use of Non-GAAP Financial Information
This press release contains non-GAAP financial measures, including non-GAAP earnings from continuing operations and related earnings per share information, adjusted to exclude certain costs, expenses, 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: charges related to implementation of the Productivity Transformation Initiative; gains or losses from the purchase or sale of businesses and product lines; discontinued operations; restructuring and other exit costs; accelerated depreciation charges; asset impairments; charges and recoveries relating to significant legal proceedings; upfront and milestone payments for in-licensing of products that have not achieved regulatory approval, which are immediately expensed; in-process research and development charges prior to 2009; special initiative funding to the Bristol-Myers Squibb Foundation; 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. For example, non-GAAP earnings and earnings per share information is 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. These items are also not included in the company’s operating segment results. In addition, this information is among the primary indicators the company uses as a basis for evaluating company performance, allocating resources, 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 net earnings or diluted earnings per share prepared in accordance with GAAP.
Bristol-Myers Squibb Company