Bristol-Myers Squibb Reports Second Quarter Financial Results

NEW YORK–(BUSINESS WIRE)– Bristol-Myers
Squibb Company (NYSE:BMY) today reported results for the second
quarter of 2017 which were highlighted by strong sales for key products Opdivo
and Eliquis
and regulatory approvals for Opdivo, the Daklinza
and Sunvepra regimen and Orencia.

“We had a strong quarter, particularly for Opdivo and Eliquis,
and also advanced our portfolio with important clinical and
regulatory milestones across multiple therapeutic areas,” said Giovanni
Caforio, M.D., chairman and chief executive officer, Bristol-Myers
Squibb. “Looking forward, I am excited by our opportunity to continue
delivering across our portfolio, maintaining our focus on strong
commercial performance and advancing our diversified pipeline.”

SECOND QUARTER FINANCIAL RESULTS

• Bristol-Myers Squibb posted second quarter 2017 revenues of $5.1
  billion, an increase of 6% compared to the same period a year ago.
  Revenues increased 7% when adjusted for foreign exchange impact.
• U.S. revenues increased 7% to $2.9 billion in the quarter compared to
  the same period a year ago. International revenues increased 4%. When
  adjusted for foreign exchange impact, international revenues increased
  7%.
• Gross margin as a percentage of revenue decreased from 75.2% to 69.6%
  in the quarter primarily due to product mix and a $127 million
  impairment charge in connection with the expected sale of
  manufacturing operations in Swords, Ireland.
• Marketing, selling and administrative expenses decreased 6% to $1.2
  billion in the quarter.
• Research and development expenses increased 31% to $1.7 billion in the
  quarter primarily due to license and asset acquisition charges of $393
  million in the second quarter of 2017.
• The effective tax rate was 28.8% in the quarter, compared to 26.4% in
  the second quarter last year.
• The company reported net earnings attributable to Bristol-Myers Squibb
  of $916 million, or $0.56 per share, in the second quarter compared to
  net earnings of $1.2 billion, or $0.69 per share, for the same period
  in 2016.
• The company reported non-GAAP net earnings attributable to
  Bristol-Myers Squibb of $1.2 billion, or $0.74 per share, in the
  second quarter, compared to $1.2 billion, or $0.69 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 $9.1 billion,
  with a net cash position of $868 million, as of June 30, 2017.

SECOND QUARTER PRODUCT AND PIPELINE UPDATE

Product Sales/Business Highlights

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

Opdivo

Regulatory

• In July, the U.S. Food and Drug Administration (FDA) accepted the
  company’s supplemental Biologics License Applications to update Opdivo
  dosing to include 480 mg infused over 30 minutes every four weeks for
  all currently approved monotherapy indications. The applications are
  under review with an action date of March 5, 2018.
• In June, the company announced the European Commission (EC) approved Opdivo
  for the treatment of locally advanced unresectable or metastatic
  urothelial carcinoma in adults after failure of prior
  platinum-containing therapy.
• In May, the company announced the FDA accepted a supplemental
  Biologics License Application to extend the use of Opdivo to
  patients with hepatocellular carcinoma (HCC) after prior sorafenib
  therapy. The FDA granted the application priority review and
  previously granted Opdivo orphan-drug designation for the
  treatment of HCC. The FDA action date is September 24, 2017.
• In April, the company announced the EC 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.

Clinical

• In July, the company announced interim analysis of results from a
  Phase 3 study evaluating Opdivo versus Yervoy in
  patients with stage IIIb/c or stage IV melanoma who are at high risk
  of recurrence following complete surgical resection. More detail from
  study results is included in the original press release for this and
  other data announced in the second quarter. (link)
• In June, at the 14^th International Conference on Malignant
  Lymphoma, the company announced data and analysis from studies
  evaluating Opdivo monotherapy and Opdivo combination
  therapy:
  • CheckMate -205: Extended follow-up data from the Phase 2 study of Opdivo
    monotherapy in adult patients with relapsed or progressed
    classical Hodgkin lymphoma (cHL) after autologous stem cell
    transplant, irrespective of brentuximab vedotin therapy history. (link)
  • Updated interim analysis from the ongoing Phase 1/2 clinical study
    evaluating Seattle Genetics’ ADCETRIS^® (brentuximab
    vedotin) and Opdivo in relapsed or refractory cHL patients.
    (link)
• In June, during ASCO in Chicago, the company announced results from
  five studies for Opdivo and the Opdivo + Yervoy
  regimen:
  • CheckMate -204: First presentation of efficacy data from the Phase
    2 study to evaluate the Opdivo + Yervoy regimen in
    patients with melanoma metastatic to the brain. (link)
  • CheckMate -142: Interim data from the Phase 2 study evaluating Opdivo
    monotherapy or the Opdivo + Yervoy regimen in
    patients with DNA mismatch repair deficient or microsatellite
    instability-high metastatic colorectal cancer. (link)
  • CheckMate -358: First disclosure of data from the Phase 1/2 study
    evaluating Opdivo in patients with advanced cervical,
    vaginal and vulvar cancers, all associated with infection by the
    human papillomavirus (HPV). (link)
  • ECHO-204: Updated data from the Phase 1/2 study evaluating the
    safety and efficacy of Incyte Corporation’s investigational oral
    selective IDO1 enzyme inhibitor, epacadostat, in combination with Opdivo
    in multiple advanced solid tumors. (link)
  • IFCT-1501 MAPS-2: The first report of data evaluating the safety
    and efficacy of Opdivo or the Opdivo + Yervoy
    regimen for previously treated unresectable malignant pleural
    mesothelioma patients. (link)

Yervoy

Regulatory

• In July, the company announced the FDA approved an expanded indication
  for Yervoy to include the treatment of unresectable or
  metastatic melanoma in pediatric patients.

Clinical

• In June, at ASCO, the company presented results of an interim
  descriptive analysis from an ongoing National Cancer Institute Phase 3
  study evaluating Yervoy 3 mg/kg and Yervoy 10 mg/kg in
  patients with stage III or resectable stage IV melanoma who are at
  high risk of recurrence following complete surgical resection. (link)

Empliciti

• In June, at the annual Congress of the European Hematology
  Association, the company presented four-year follow-up data from the
  Phase 3 ELOQUENT-2 study evaluating Empliciti plus
  lenalidomide/dexamethasone versus lenalidomide/dexamethasone alone in
  patients with relapsed/refractory multiple myeloma. (link)

Sprycel

Regulatory

• In July, the company announced the FDA accepted its supplemental New
  Drug Application to include an indication for Sprycel to
  treat children with Philadelphia chromosome-positive chronic phase
  (CP) chronic myeloid leukemia (CML), as well as a powder for oral
  suspension (PFOS) formulation of Sprycel. The
  application is under priority review with an action date of November
  9, 2017.
• In May, the company announced the European Medicines Agency (EMA)
  validated its grouped Type II variation/Extension of Application for Sprycel
  to treat children and adolescents aged one year to 18 years with
  CP-CML and to include the PFOS. Validation of the application confirms
  the submission is complete and begins the EMA’s centralized review
  process.

Clinical

• In June, at ASCO, the company presented data from the Phase 2
  CA180-226 study evaluating Sprycel in imatinib-resistant or
  -intolerant and newly diagnosed pediatric patients with CP-CML. (link)

Orencia

Regulatory

• In July, the EC approved Orencia for the treatment of active
  Psoriatic Arthritis (PsA) in adult patients for whom the response to
  previous disease-modifying antirheumatic drug therapy, including
  methotrexate, has been inadequate, and additional systemic therapy for
  psoriatic skin lesions is not required.
• In July, the company announced the FDA approved Orencia in
  intravenous and subcutaneous injection formulation for the treatment
  of adults with active PsA.
• In June, the company announced the availability of a new FDA-approved
  subcutaneous Orencia administration option for use in patients
  two years of age and older with moderately to severely active
  polyarticular Juvenile Idiopathic Arthritis, providing the option of Orencia
  treatment that can be administered at home.

Clinical

• In June, at the Annual European Congress of Rheumatology (EULAR 2017),
  the company presented 23 abstracts related to Orencia,
  including new data on the role of biomarkers and magnetic resonance
  imaging in rheumatoid arthritis patient identification and treatment. (link)

Daklinza

• In April, the company announced the China Food and Drug Administration
  approved a direct-acting antiviral regimen comprised of Daklinza
  and Sunvepra, for the treatment of treatment-naive or
  -experienced patients, with or without compensated cirrhosis, infected
  with genotype 1b chronic hepatitis C virus (HCV). Daklinza was
  also approved in China for use in combination with other agents,
  including sofosbuvir, for adult patients with HCV genotypes 1-6.

Investigational Compound Highlights

Oncology

• In June, during ASCO in Chicago, the company announced results from a
  study for the company’s anti-lymphocyte activation gene-3 (LAG-3)
  monoclonal antibody (BMS-986016):
  • CA224-020: Proof-of-Concept data from the Phase 1/2a study
    combining BMS-986016 with Opdivo in heavily pretreated
    advanced melanoma patients who were relapsed or refractory on
    anti-PD-1/PD-L1 therapy. (link)

SECOND QUARTER BUSINESS DEVELOPMENT UPDATE

• In June, the company and SK Biotek Co., Ltd announced the signing of a
  definitive purchase agreement to sell Bristol-Myers Squibb’s
  manufacturing operations in Swords, Ireland, to SK Biotek, a
  wholly-owned subsidiary of SK Holdings, based in Seoul, South Korea.
  The companies intend to complete the deal by the fourth quarter of
  2017.
• In June, the company and Novartis announced a clinical research
  collaboration to investigate the safety, tolerability and efficacy of Opdivo
  and the Opdivo + Yervoy regimen in combination with
  Novartis’ Mekinist^®, as a potential treatment option for
  metastatic colorectal cancer in patients with microsatellite stable
  tumors where the tumors are proficient in mismatch repair.
• In June, the company and QIAGEN announced an agreement to explore the
  use of next-generation sequencing technology to develop gene
  expression profiles as predictive or prognostic tools for use with
  Bristol-Myers Squibb novel immuno-oncology therapies in cancer
  treatment.
• In June, the company and Seattle Genetics, Inc. announced an expanded
  clinical collaboration agreement for a Phase 3 study to evaluate the
  combination of Opdivo and Seattle Genetics’ antibody-drug
  conjugate ADCETRIS^® versus ADCETRIS^® alone as a
  potential treatment option for patients with relapsed/refractory or
  transplant-ineligible advanced cHL.
• In May, the company and Array BioPharma announced a clinical research
  collaboration to investigate the safety, tolerability and efficacy of
  Array’s investigational MEK inhibitor, binimetinib, in combination
  with Opdivo and the Opdivo + Yervoy regimen as a
  potential treatment for metastatic colorectal cancer in patients with
  microsatellite stable tumors.
• In May, the company and Advaxis, Inc. announced a clinical development
  collaboration to evaluate Opdivo and Advaxis’ ADXS-DUAL, an
  investigational immunotherapy targeting HPV-associated cancers, as a
  potential combination treatment option for women with metastatic
  cervical cancer.
• In May, the company and Calithera Biosciences, Inc. announced an
  expansion of their existing collaboration to evaluate Opdivo in
  combination with Calithera’s CB-839, an investigational orally
  administered glutaminase inhibitor, in patients with non-small cell
  lung cancer and melanoma.

ADCETRIS^® is a trademark of Seattle Genetics, Inc.

Mekinist^® is a trademark of Novartis.

2017 FINANCIAL GUIDANCE

Bristol-Myers Squibb is updating its 2017 GAAP EPS guidance range from
$2.72 – $2.87 to $2.66 – $2.76 and raising the lower end of its non-GAAP
EPS guidance range from $2.85 – $3.00 to $2.90 – $3.00. Both GAAP and
non-GAAP guidance assume current exchange rates. Key revised 2017 GAAP
and non-GAAP line-item guidance assumptions are:

• An effective tax rate of approximately 23% 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.

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.

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 July 27, 2017 at 10:30 a.m. EDT
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 888-394-8218 or international
323-701-0225, confirmation code: 1575949. 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. EDT on July
27, 2017 through 1:30 p.m. EDT on August 10, 2017. 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: 1575949.

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