Bristol-Myers Squibb Reports Fourth Quarter and Full Year 2016 Financial Results

NEW YORK–(BUSINESS WIRE)– Bristol-Myers
Squibb Company (NYSE:BMY) today reported results for the fourth
quarter and full year of 2016, which were highlighted by strong sales
for key products Opdivo
and Eliquis,
regulatory approvals for Opdivo in the U.S. and Europe, and
strategic transactions in oncology and fibrosis that further
strengthened the company’s pipeline.

“Bristol-Myers Squibb achieved outstanding operating and financial
results in 2016, driven by strong commercial performance across our
portfolio,” said Giovanni
Caforio, M.D., chief executive officer, Bristol-Myers Squibb. “In
2017, we will continue to advance our pipeline, drive strong commercial
execution across the business and progress our broad portfolio of
Immuno-Oncology medicines.”

FOURTH QUARTER FINANCIAL RESULTS

• Bristol-Myers Squibb posted fourth quarter 2016 revenues of $5.2
  billion, an increase of 22% compared to the same period a year ago.
  Global revenues increased 24% adjusted for foreign exchange impact.
• U.S. revenues increased 20% to $2.7 billion in the quarter compared to
  the same period a year ago. International revenues increased 25%. When
  adjusted for foreign exchange impact, international revenues increased
  28%.
• Gross margin as a percentage of revenue decreased from 77.8% to 73.6%
  in the quarter primarily due to product mix.
• Marketing, selling and administrative expenses decreased 3% to $1.5
  billion in the quarter.
• Research and development expenses decreased 27% to $1.4 billion in the
  quarter due to lower charges resulting from business development
  transactions and in-process research and development impairments.
• The effective tax rate was 17.3% in the quarter, compared to a benefit
  of 54.1% in the fourth quarter last year. Income taxes in both periods
  include net tax benefits attributed to specified items.
• The company reported net earnings attributable to Bristol-Myers Squibb
  of $894 million, or $0.53 per share, in the quarter compared to a net
  loss of $197 million, or $0.12 per share, a year ago. The results in
  the fourth quarter of 2015 included per share after tax charges of
  $0.24 from the Five Prime Therapeutics, Inc. and Cardioxyl
  Pharmaceuticals, Inc. business development transactions and $0.08 for
  the transfer of the Erbitux^® business in North
  America to Eli Lilly and Company.
• The company reported non-GAAP net earnings attributable to
  Bristol-Myers Squibb of $1.1 billion, or $0.63 per share, in the
  fourth quarter, compared to $647 million, or $0.38 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 $9.1 billion,
  with a net cash position of $2.4 billion, as of December 31, 2016.

FOURTH QUARTER PRODUCT AND PIPELINE UPDATE

Product Sales/Business Highlights

Global revenues for the fourth quarter of 2016, compared to the fourth
quarter of 2015, were driven by:

• Opdivo,
  which grew by $835 million
• Eliquis,
  which grew by $346 million or 57% increase
• Orencia,
  which grew by 16%
• Sprycel,
  which grew by 15%
• Yervoy,
  which had sales of $264 million

Opdivo

Litigation

• In January, the company and Ono Pharmaceutical Company, Ltd. (Ono)
  announced they signed a global patent license agreement with Merck &
  Co., Inc. to settle all patent-infringement litigation related to
  Merck’s PD-1 antibody Keytruda^®. The agreement will result
  in the dismissal with prejudice of all patent litigation between the
  companies pertaining to Keytruda^®.

Regulatory

• In November, the company announced the U.S. Food and Drug
  Administration (FDA) approved Opdivo for the treatment of
  patients with recurrent or metastatic squamous cell carcinoma of the
  head and neck (SCCHN) with disease progression on or after
  platinum-based therapy.
• In November, the company announced the European Commission approved Opdivo
  for the treatment of patients with relapsed or refractory classical
  Hodgkin lymphoma (cHL) after autologous stem cell transplant (ASCT)
  and treatment with brentuximab vedotin.
• In December, the company and Ono announced Opdivo was approved
  in Japan for the treatment of patients with relapsed or refractory cHL.
• In December, the company and Ono announced that Ono submitted a
  supplemental application for Opdivo for the treatment of
  unresectable advanced or recurrent gastric cancer.
• In January, the company announced it decided not to pursue an
  accelerated regulatory pathway for the regimen of Opdivo plus Yervoy
  in first-line lung cancer in the U.S. based on a review of data
  available at this time. Because these are ongoing registrational
  studies, the company will not be providing additional details.

Clinical

• In November, the company announced that ONO-4538-12, a Phase 3,
  randomized, double-blind clinical trial evaluating the efficacy and
  safety of Opdivo in patients with unresectable advanced or
  recurrent gastric cancer refractory to, or intolerant of, standard
  therapy, met its primary endpoint of overall survival. In January, the
  company announced the results from the trial.
• In November, at the Society for Immunotherapy of Cancer Annual
  Meeting, the company announced new data and analysis from studies
  evaluating urelumab, lirilumab, Opdivo and the Opdivo + Yervoy
  regimen:
  • Safety and efficacy data from a Phase 1/2 study of urelumab in
    combination with Opdivo in patients with hematologic and
    solid tumors, including biomarker analyses by level of PD-L1
    expression.
  • Interim efficacy analysis, announced by the company and Innate
    Pharma S.A., from a Phase 1/2 study of the combination of
    lirilumab and Opdivo in the cohort of advanced platinum
    refractory squamous cell carcinoma of the head and neck, including
    exploratory biomarker analyses of patient response by level of
    PD-L1 expression.
  • CheckMate -032: Results from cohorts of the Phase 1/2 open-label
    trial investigating two combination schedules of Opdivo
    plus Yervoy in patients with locally advanced or metastatic
    urothelial carcinoma previously treated with platinum-based
    therapy.
• In December, at the International Association for the Study of Lung
  Cancer World Conference on Lung Cancer, the company announced new data
  from studies evaluating Opdivo and the Opdivo + Yervoy
  regimen:
  • Checkmate -012: Updated findings from the Phase 1b trial in
    chemotherapy-naïve advanced non-small cell lung cancer patients
    evaluating Opdivo monotherapy, or in combination with Yervoy
    at different doses and schedules.
  • CheckMate -032: Updated results for Opdivo monotherapy and
    in combination with Yervoy in previously treated small cell
    lung cancer patients, a cohort of the Phase 1/2 open-label trial.
• In December, during the American Society of Hematology Annual Meeting,
  the company and Seattle Genetics announced the first reported data
  from an ongoing Phase 1/2 clinical trial evaluating Adcetris^®
  (brentuximab vedotin) in combination with Opdivo in relapsed or
  refractory cHL.

FOURTH QUARTER BUSINESS DEVELOPMENT UPDATE

• In November, the company and Enterome announced a collaboration
  agreement for the discovery and development of microbiome-derived
  biomarkers, drug targets and bioactive molecules to be developed as
  potential companion diagnostics and therapeutics for cancer.
  Additionally, the collaboration will seek to identify novel
  microbiome-derived biomarkers in an effort to improve clinical
  outcomes for patients treated with Bristol-Myers Squibb’s
  Immuno-Oncology portfolio.
• In November, the company and Infinity Pharmaceuticals announced a
  clinical trial collaboration to evaluate Bristol-Myers Squibb’s Opdivo in
  combination with Infinity’s IPI-549 in patients with advanced solid
  tumors.
• In November, the company and Nitto Denko Corporation (Nitto) announced
  an agreement granting Bristol-Myers Squibb exclusive worldwide rights
  for the development and commercialization of Nitto’s investigational
  siRNA molecules targeting heat shock protein 47 (HSP47) in vitamin A
  containing formulations, which includes Nitto’s lead asset
  ND-L02-s0201, currently in Phase 1b study for the treatment of
  advanced liver fibrosis. The agreement also grants Bristol-Myers
  Squibb the option to receive exclusive licenses for HSP47 siRNAs in
  vitamin A containing formulations for the treatment of lung fibrosis
  and other organ fibrosis.
• In November, the company announced a five-year research collaboration
  with the Johns Hopkins University designed to identify mechanisms of
  response and resistance in patients whose cancer is being treated with
  checkpoint inhibitor-based immunotherapies, including Opdivo monotherapy,
  or Opdivo in combination with Yervoy or
  other investigational immunotherapies.
• In December, the company and PsiOxus Therapeutics, Ltd. announced an
  agreement granting Bristol-Myers Squibb exclusive worldwide rights to
  NG-348, a pre-clinical stage, “armed” oncolytic virus with the goal of
  addressing solid tumors.
• In December, the company and Calithera Biosciences announced a
  clinical collaboration to evaluate Opdivo in combination with
  CB-839 in clear cell renal cell carcinoma.
• In January, the company announced a new clinical research
  collaboration to evaluate the combination of Opdivo and
  Janssen’s CD38-directed cytolytic antibody Darzalex^® in
  Phase 1b/2 clinical studies in multiple myeloma and solid tumors
  including non-small cell lung cancer, pancreatic cancer, colorectal
  cancer, triple negative breast cancer and head and neck cancer.
• In January, the company and GeneCentric Diagnostics, Inc. announced a
  research collaboration to explore whether the application of
  GeneCentric’s Cancer Subtype Platform (CSP) might be able to identify
  translational biomarkers for Opdivo. Additionally, GeneCentric
  announced it had secured equity funding from the company to support
  the clinical development of its CSP and new research laboratory.

2017 FINANCIAL GUIDANCE

Bristol-Myers Squibb is confirming its 2017 GAAP EPS guidance range of
$2.47 – $2.67 and is adjusting its non-GAAP EPS guidance range from
$2.85 – $3.05 to $2.70 – $2.90. Both GAAP and non-GAAP guidance assume
current exchange rates. 2017 GAAP and non-GAAP line-item guidance
assumptions include:

• Worldwide revenues increasing in the low-single digits.
• Gross margin as a percentage of revenue to be approximately 72% to 73%
  for both GAAP and non-GAAP.
• Marketing, selling and administrative expenses decreasing in the mid-
  to high-single digit range for both GAAP and non-GAAP.
• Research and development expenses increasing in the high-single digit
  range for both GAAP and non-GAAP.
• An effective tax rate of approximately 21% for both GAAP and non-GAAP.

As previously announced in the third quarter of 2016, the company’s
operating model is evolving, to drive the company’s continued success in
the near- and long-term. The majority of costs are expected to be
incurred by 2020. Although GAAP operating expenses may increase
initially as restructuring and other charges are incurred relating to
this evolution, the company expects non-GAAP operating expenses to be
roughly flat with 2016 levels through 2020.

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 guidance also assumes
no generic entry for Sprycel in Europe following the appeal of
the European Patent Office’s decision. 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.

Erbitux^® is a trademark of ImClone LLC.
Keytruda^® is
a trademark of Merck & Co., Inc.
Adcetris^® is a
trademark of Seattle Genetics, Inc.
Darzalex^® is a
trademark of Janssen Biotech, 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, pension, legal and other
contractual settlement charges 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.

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.

There will be a conference call on January 26, 2017 at 10:30 a.m. EST
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 877-201-0168 or international
647-788-4901, confirmation code: 60705823. 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 1:30 p.m. EST on
January 26, 2017 through 11:59 p.m. EST on February 9, 2017. The replay
will also be available through http://investor.bms.com
or by calling the U.S. toll free 855-859-2056 or international
404-537-3406, confirmation code: 60705823.

For more information, contact: Ken Dominski, 609-252-5251, ken.dominski@bms.com,
Communications; John Elicker, 609-252-4611, john.elicker@bms.com,
Tim Power, 609-252-7509, timothy.power@bms.com
or Bill Szablewski, 609-252-5894, william.szablewski@bms.com,
Investor Relations.

(a) Specified items in cost of products sold are accelerated
depreciation, asset impairment and other shutdown costs.

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