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Bristol-Myers Squibb Reports Fourth Quarter And Full Year 2013 Financial Results

Bristol-Myers Squibb Company (NYSE:BMY) today reported results for the fourth quarter and full year of 2013. The fourth quarter was highlighted by the company’s announcement to sell its diabetes business as part of the continued evolution of its successful BioPharma strategy to a specialty care model. The company achieved important regulatory milestones in the quarter for Eliquis in the U.S., daclatasvir/asunaprevir in Japan, daclatasvir in Europe and Farxiga in the U.S. In addition, the company provided financial guidance for 2014.

“In the fourth quarter we continued to grow and evolve our business, delivering solid financial results and achieving regulatory milestones for products that are important to our long-term success,” said Lamberto Andreotti, chief executive officer, Bristol-Myers Squibb. “We are looking forward to 2014 as an important year to advance our specialty care BioPharma model and deliver on key opportunities in immuno-oncology and hepatitis C that will position us well for long-term growth.”

     

Fourth Quarter

$ amounts in millions, except per share amounts        

2013

2012

Change

Revenues $ 4,441 $ 4,191 6 %
GAAP Diluted EPS 0.44 0.56 (21 )%
Non-GAAP Diluted EPS 0.51 0.47 9 %
 

Full Year

$ amounts in millions, except per share amounts

2013

2012

Change

Revenues $ 16,385 $ 17,621 (7 )%
GAAP Diluted EPS 1.54 1.16 33 %
Non-GAAP Diluted EPS 1.82 1.99 (9 )%
 

FOURTH QUARTER FINANCIAL RESULTS

  • Bristol-Myers Squibb posted fourth quarter 2013 revenues of $4.4 billion, an increase of 6% compared to the same period a year ago.
  • U.S. revenues increased 1% to $2.3 billion in the quarter compared to the same period a year ago. International revenues increased 11% to $2.2 billion.
  • Gross margin as a percentage of revenues was 71.3% in the quarter compared to 74.3% in the same period a year ago.
  • Marketing, selling and administrative expenses decreased 7% to $1.1 billion in the quarter.
  • Advertising and product promotion spending increased 20% to $254 million in the quarter.
  • Research and development expenses decreased 12% to $957 million in the quarter.
  • The effective tax rate on earnings before income taxes was 15.4% in the quarter, compared to a tax benefit rate of 80.1% in the fourth quarter last year attributed to a capital loss deduction in the quarter.
  • The company reported net earnings attributable to Bristol-Myers Squibb of $726 million, or $0.44 per share, in the quarter compared to $925 million, or $0.56 per share, a year ago.
  • The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $842 million, or $0.51 per share, in the fourth quarter, compared to $777 million, or $0.47 per share, for the same period in 2012. An overview of specified items is discussed under the “Use of Non-GAAP Financial Information” section.
  • Cash, cash equivalents and marketable securities were $8.3 billion, with a net debt position of $68 million, as of December 31, 2013.

FOURTH QUARTER STRATEGIC UPDATE

In December, the company announced plans to sell its global diabetes business that was part of its collaboration with AstraZeneca, enabling its continued evolution to a specialty care BioPharma company. Under terms of the agreement, AstraZeneca will make an upfront payment of $2.7 billion to Bristol-Myers Squibb, with potential regulatory- and sales-based milestone payments of up to $1.4 billion and will make royalty payments based on net sales through 2025. Of the $1.4 billion milestone payments, the company has already earned a $0.6 billion milestone payment with the recent approval of Farxiga in the U.S. that will be paid shortly after the closing of the transaction. In addition, AstraZeneca will make payments of up to $225 million if and when certain assets are subsequently transferred. The transaction is expected to be accretive to non-GAAP EPS in the near-term and likely dilutive to non-GAAP EPS toward the latter part of the decade. The company anticipates that the transaction will close in the first quarter of 2014.

FOURTH QUARTER PRODUCT AND PIPELINE UPDATE

Bristol-Myers Squibb’s global revenues in the fourth quarter included Yervoy, which grew 23%, Onglyza/ Kombiglyze , which grew 13%, Sprycel, which grew 30%, and Orencia, which grew 22%.

Farxiga / Xigduo

  • In January, the company and its partner, AstraZeneca, announced that the U.S. Food and Drug Administration (FDA) approved Farxiga, a once-daily oral treatment indicated as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus. Farxiga is marketed as Forxiga outside the United States.
  • In January, the company and its partner, AstraZeneca, announced that Xigduo (dapagliflozin and metformin hydrochloride) was granted Marketing Authorization by the European Commission for the treatment of type 2 diabetes in the European Union (EU). Xigduo combines dapagliflozin (trade name Forxiga), a selective and reversible inhibitor of SGLT2 with metformin hydrochloride, two anti-hyperglycemic products with complementary mechanisms of action to improve glycemic control, in a twice daily tablet.

Eliquis

  • In December, the company and its partner, Pfizer, announced that the FDA has accepted for review a Supplemental New Drug Application for Eliquis for the treatment of deep vein thrombosis (DVT) and pulmonary embolism (PE) and for the reduction in the risk of recurrent DVT and PE. The Prescription Drug User Fee Act (PDUFA) goal date for a decision by the FDA is August 25, 2014.
  • In December, the company and its partner Pfizer, also announced that in November 2013, the European Medicines Agency (EMA) accepted for review an application for Eliquis for the treatment of DVT and PE, and prevention of recurrent DVT and PE.

Metreleptin

  • In December, the FDA’s Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC) recommended the investigational medicine metreleptin for the treatment of pediatric and adult patients with generalized lipodystrophy. The EMDAC did not recommend metreleptin in patients with partial lipodystrophy. The FDA is not bound by the EMDAC’s recommendation but will take it into consideration when reviewing the Biologics License Application for metreleptin. The PDUFA goal date for metreleptin is February 24, 2014.

Yervoy

  • In November, the European Commission approved an expanded indication for Yervoy for the first-line treatment of adult patients with advanced (unresectable or metastatic) melanoma. The expanded indication applies to all 28 European Union member states as well as Iceland and Norway.

Hepatitis C

  • In January, the company announced that the EMA validated the company’s marketing authorization application for daclatasvir, an investigational NS5A complex inhibitor, to treat adults with chronic hepatitis C with compensated liver disease, including genotypes 1, 2, 3, and 4. The application seeks approval to use daclatasvir in combination with other agents, including sofosbuvir, to treat chronic hepatitis C. The validation marks the start of an accelerated regulatory review process for daclatasvir, which has the potential, when used in combination with other agents, to address a high unmet need in the European Union where an estimated 9 million people are living with hepatitis C.
  • In November, the company announced it had submitted a New Drug Application to Japan’s Pharmaceutical and Medical Devices Agency seeking approval for the world’s first interferon-free and ribavirin-free treatment regimen for patients with chronic hepatitis C. The submission is based on results from a Phase III study demonstrating that the 24-week, all-oral, interferon-free and ribavirin-free regimen of daclatasvir and asunaprevir achieved an overall sustained virologic response 24 weeks after the end of treatment of 84.7% in Japanese patients with chronic hepatitis C genotype 1b who were either interferon-ineligible/intolerant or non-responders to interferon-based therapies. These Phase III data were presented in November at the American Association for the Study of Liver Diseases annual meeting in Washington D.C.

Sprycel

  • In December, at the American Society of Hematology’s annual meeting in New Orleans, the company and its partner, Otsuka America Pharmaceutical Inc., presented four-year follow-up data from the Phase III DASISION study of Sprycel 100 mg once daily vs. imatinib 400 mg daily in the first-line treatment of adults with Philadelphia chromosome-positive chronic phase chronic myeloid leukemia. At four years, 76% of Sprycel patients vs. 63% of imatinib patients achieved a major molecular response and 84% of Sprycel patients vs. 64% of imatinib patients achieved an optimal molecular response at three months, as defined by treatment guidelines. Patients who achieved this response had improved overall survival vs. those who did not.

Nivolumab

  • In October, at the World Conference on Lung Cancer in Sydney, Australia, the company presented long-term follow-up results from the lung cancer cohort of an expanded Phase I dose-ranging study of nivolumab, an investigational PD-1 immune checkpoint inhibitor. The results showed sustained activity in heavily pre-treated patients with non-small-cell lung cancer as defined by one- and two-year survival rates of 42% and 24%, respectively, across dose cohorts. The spectrum, frequency and severity of treatment-related adverse events were consistent with those initially reported for nivolumab.

Clazakizumab

  • In October, at the American College of Rheumatology’s annual meeting in San Diego, the company and its partner, Alder Biopharmaceuticals, presented efficacy and safety data from a Phase IIb dose-ranging study of subcutaneous clazakizumab in adults with moderate-to-severe rheumatoid arthritis and an inadequate response to methotrexate. Clazakizumab is a humanized anti-IL-6 monoclonal antibody that is directed against the IL-6 cytokine rather than its receptor. Clazakizumab demonstrated promising rates of low disease activity and remission based on DAS28, CDAI and SDAI criteria in the study, which included MTX and anti-TNF comparator arms. The overall safety profile for clazakizumab was consistent with the known pharmacology of IL-6 blockade.

2014 FINANCIAL GUIDANCE

Bristol-Myers Squibb is setting its 2014 GAAP EPS guidance range from $1.75 to $1.90 and confirming its non-GAAP EPS guidance range from $1.65 to $1.80. Both GAAP and non-GAAP guidance assume current exchange rates and the closing of the sale of the diabetes business to AstraZeneca in the first quarter of 2014.

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