Bristol-Myers Squibb (BMY)

Q3 2011 Earnings Call

October 27, 2011 10:30 am ET


Charles Bancroft - Chief Financial Officer, Executive Vice President and Member of Management Council

Beatrice Cazala - Executive Vice President of Commercial Operations

Giovanni Caforio - President of U.S. Pharmaceuticals

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Elliott Sigal - Chief Scientific Officer, President of Research & Development, Executive Vice President, Member of Management Council, Director, Member of Executive Committee and Member of Science & Technology Committee

Lamberto Andreotti - Chief Executive Officer, Member of Management Council, Director, Member of Science & Technology Committee and Member of Executive Committee

John Elicker - Investor Relations Executive


Steve Scala - Cowen and Company, LLC, Research Division

Charles Anthony Butler - Barclays Capital, Research Division

Gregory B. Gilbert - BofA Merrill Lynch, Research Division

David Risinger - Morgan Stanley, Research Division

Mark J. Schoenebaum - ISI Group Inc., Research Division

Marc Goodman - UBS Investment Bank, Research Division

Seamus Fernandez - Leerink Swann LLC, Research Division

Tim Anderson - Sanford C. Bernstein & Co., LLC., Research Division

Jami Rubin - Goldman Sachs Group Inc., Research Division

Barbara A. Ryan - Deutsche Bank AG, Research Division

Christopher Schott - JP Morgan Chase & Co, Research Division

John T. Boris - Citigroup Inc, Research Division

Catherine J. Arnold - Crédit Suisse AG, Research Division



Good day, and welcome to today's third quarter 2011 earnings release conference call. This call is being recorded. At this time, I would like to turn the call over to Mr. John Elicker, Senior Vice President of Investor Relations. Please go ahead, Mr. Elicker.

John Elicker

Thank you, Celia. Good morning, everybody, and thanks for joining us to review and discuss our Q3 results. With me this morning are Lamberto Andreotti, our Chief Executive Officer; Charlie Bancroft, Executive Vice President and Chief Financial Officer; Elliott Sigal, Executive Vice President, Chief Scientific Officer; also Beatrice Cazala, also Executive Vice President Commercial and EU and Emerging Markets; and for the first time, Giovanni Caforio, President of our U.S. business.

Before we get started, let me take care of the legal requirement. During the call, we will make statements about the company's future plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's most recent annual report on Form 10-K and reports on Form 10-Q and 8-K. These documents are available from the SEC, the BMS website or from Investor Relations.

In addition, any forward-looking statements represent our estimates only as of today, and should not be relied upon as representing our estimates as of subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our estimates change.

During the call, we will also discuss certain non-GAAP financial measures adjusted to include certain costs, expenses, gains and losses and other specified items. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are available on the company's website at

So Lamberto and Charlie will have prepared remarks, and then we'll go to your questions. Lamberto?

Lamberto Andreotti

Yes. Thank you, John. Good morning, everyone. Before I talk about the results of the third quarter, I want to note a few management changes that we have recently made, changes that underscore our commitment, growth and recognize the talent of our senior executives.

I have promoted Giovanni Caforio to President U.S. pharmaceuticals, and he has joined my senior management team. Giovanni is a physician with a strong business background, and this is a natural career step that builds on his senior operational experience and strategic leadership in our European, U.S. and global commercialization units.

And I've also appointed Charlie Bancroft and Beatrice Cazala for the position of Executive Vice President, expanding their respective roles and responsibilities. Naturally, I am very pleased by how these changes will strengthen our already strong management team.

So with that, let's go back to the subject of this call. We have just completed another very good quarter with strong sales, solid financials and significant R&D and business development achievements. In short, we proved that once again, that our BioPharma strategy is on track, delivering results today, while building a sound foundation for tomorrow.

With third quarter net sales of $5.3 billion, we delivered an 11% increase over last year. That is double-digit growth for the second straight quarter. We also reported non-GAAP EPS of $0.61 in the quarter compared to $0.59 a year ago. Our top line performance was strong across a wide range of products. This include, of course, YERVOY, our breakthrough treatment for metastatic melanoma, which in only its second quarter on the market, had worldwide sales of $121 million. I note that sales should have been $148 million instead of $121 million if we have not changed our returns policy, which Charlie will describe later in the call.

During the second quarter, we launched YERVOY in Europe with a few countries that have already started recording sales, while others have initiated their pricing and reimbursement discussions. In the U.S., brand awareness of YERVOY is at virtually 100%, and the number of accounts ordering the products continued to increase month-over-month. And most importantly, update for YERVOY remains strong, both in hospitals and community-based treatment centers.

Moving to our pipeline, we continue to deliver good news, most notable of which was the announcement of the full results of the ARISTOTLE clinical trial on ELIQUIS, apixaban at the ESC Congress in Paris. The results are that Phase III studies were very positive and demonstrated ELIQUIS statistical superiority to warfarin with respect to reducing the risk of stroke and reducing the risk of bleeding in patients with atrial fibrillation. Atrial fibrillation is the leading cause of stroke, affecting approximately 10 million patients worldwide. The results were remarkably consistent across all subgroups and demonstrated a statistically significant improvement in mortality.

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