Analyst Conference Summary


Bristol-Myers Squibb

conference date: July 25, 2019 @ 7:30 AM Pacific Time
for quarter ending: June 30, 2019 (second quarter 2019)

But I do own Celgene stock, and so will own BMY when the merger completes.
Forward-looking statements

Overview: Strong revenue and earnings growth, preparing for Celgene acquisition. Increased 2019 non-GAAP guidance but decreased GAAP EPS.

Basic data (GAAP):

Revenue was $6.27 billion, up 6% sequentially from $5.92 billion and up 10% from $5.70 billion year-earlier.

Net income was $1.4 billion, down % sequentially from $1.71 billion and up % from $373 million year-earlier.

EPS (earnings per share), diluted were $0.87, down 16% sequentially from $1.04, and up 17% from $1.01 year-earlier.


Decreasing its 2019 GAAP EPS guidance range from between $3.84 and $3.94 down to $3.73 to $3.83 and increasing its non-GAAP EPS guidance range from between $4.10 to $4.20 up to $4.20 to $4.30.

Conference Highlights:

In April, Bristol-Meyers stockholders and Celgene stockholders voted for a merger agreement under which Bristol-Myers will acquire Celgene. In Q2 recorded $400 million in costs related to the merger, which is expected to complete in late 2019 or early 2020. However, the drug Otezla will be divested in order to get FTC approval for the merger. The sale of Otezla is on hand, but requires regulatory approval. The post merger leadership team has been announced.

Giovanni Caforio, M.D., CEO of Bristol-Myers Squibb stated "Through strong commercial execution and financial discipline we are establishing a solid foundation from which we can build the leading biopharma company, well-positioned to address the unmet needs of our patients and create long-term shareholder value."

U.S. revenues increased 14% y/y to $3.7 billion. International revenues increased 5% or 12% when adjusted for foreign exchange impact.

In July, the company, Bayer and Ono announced a clinical trial collaboration to evaluate Opdivo in combination with Stivarga in patients with micro-satellite stable metastatic colorectal cancer. In July, the Bristol announced the completion of its previously announced sale of its consumer health business, UPSA, to Taisho Pharmaceutical. In June, the company announced Catalent, Inc. has agreed to purchase its oral solid, biologics, and sterile product manufacturing facility in Anagni, Italy.

See future revenue growth by Opdivo to be driven by continuing expansion to new indications. Remains committed to the dividend, but will remain active in early and small deals while working to reduce debt.

Bristol has seen very positive developments with Celgene since the deal was made, both pipeline advances and wins in protecting patents. Longer term, as loss of exclusivity occurs in the second half of the decade, new therapies will keep the company growing. Believes is well-prepared for the integration process.

Non-GAAP numbers: diluted EPS $1.18, up 7% sequentially from $1.10 and up 413% from $0.23 year-earlier. Net income $1.9 billion, up 6% sequentially from $1.80 billion, and up 19% from $1.6 billion year-earlier.

Cash and equivalents ended at $30.4 were up sequentially from $10.0 billion. Net cash after debt was $5.4 billion, up sequentially from $4.0 billion. Long term debt was $ billion. $18.8 billion in new notes issued in May to acquire Celegene.

Believes cash flow will be strong, allowing for paying off debt and increasing the dividend. Believes revenue growth from newer drugs will allow growth to continue even when Revlimid revenue levels off starting in 2022.

sales in $ millions
Q2 2019
Q2 2018
y/y change
Opdivo $1,823 $1,627 12%
Eliquis 2,042 1,650 24%
Orencia 778 711 9%
Sprycel 544 535 2%
Yervoy 367 315 17%
Empliciti 91 64 42%
Baraclude 147 179 -18%
Other 481 623 -23%
Total 6,273 5,704 10%

The company announced on April 25, 2019, topline results from the Phase 2 CheckMate-714 trial evaluating Opdivo versus Opdivo plus Yervoy (ipilimumab) in patients with recurrent or metastatic squamous cell carcinoma of the head and neck. The study did not meet its primary endpoints.

In July, 2019, Bristol announced Part 1a of the Phase 3 Checkmate-227 study evaluating Opdivo plus low dose Yervoy vs. chemotherapy met the co-primary endpoint of overall survival in first-line non-small cell lung cancer (NSCLC) patients whose tumors express PD-L1=1%. But Part 2 of the Phase 3 Checkmate-227 study evaluating Opdivo plus chemotherapy versus chemotherapy did not meet its primary endpoint of overall survival in first-line non-squamous NSCLC patients regardless of PD-L1 status. Full results will be shared at an upcoming medical meeting.

In June, at EHA, Bristol announced positive results from the Phase 2 study evaluating Empliciti (elotuzumab) plus pomalidomide and dexamethasone v. pomalidomide and dexamethasone alone in patients with relapsed or refractory multiple myeloma.

Cost of products sold was $1.99 billion. SG&A $1.08 billion. R&D $1.33 billion. Other income $101 million. Total expenses $4.50 billion. Operating profit $1.78 billion. Taxes $337 million.

Q&A summary:

227 results impact on checkpoint 9LA? We are confident in 9LA, Yervoy and Opdivo in first line lung cancer with two rounds of chemo. For Part 1a Optivo + Yervoy we continue to see the same pattern for NSCLC as we saw in other cancers.

Senate bill exposure? It is early days in Washington to guess at specific outcomes. We support a discussion of affordability for patients, which are largely driven by how insurance plans are designed. We are concerned with many of the proposals we are seeing. We believe it is important to have a broader, more diversified business, given the uncertainty. We have relatively little Medicaid exposure.

Several questions about the details of 772 Part 1a that can't be meaningfully addressed until the details are released. First line NSCLC still means most patients fail two therapies within one year, so better therapies are still desirable. We are seeing the same type of meaningful benefits we saw with melanoma and renal cell cancer.

Adjuvant patient setting? We believe our early adjuvant program is very strong.

Opdivo trends prior to lung cancer opportunity in 2021? Today we see strength in the core business: melanoma, renal cell, liver. Good uptake in Germany and Japan. In 2020 the competition will increase, then in 2021 it depends on 227 for first line lung cancer. Also first line GBM data when available. Later the adjuvant programs become important.

We will get feedback on potential bidders when we give our draft sales agreement to the FTC. We believe there will be a robust bidding process.

LAG3 Phase 3 melanoma? It is a Phase 2/3 study, adding LAG3 to Opdivo. First readout from Phase 2 next month.

Tick 2 program? 2 studies, Phase 3, enrollment progressing rapidly. One year treatment period. Data towards the end of next year. Excited about it profile in psoriasis and commercial opportunity.

OpenIcon Analyst Conference Summaries Main Page



More Analyst Conference Pages:



Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2019 William P. Meyers