Analyst Conference Summary


Bristol-Myers Squibb

conference date: November 5, 2020 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2020 (third quarter 2020)

Forward-looking statements

Overview: Revenue resumed ramp, but most of y/y increase is due to the Celgene acquisition. Non-GAAP profits showed solid y/y increase.

Basic data (GAAP):

Revenue was $10.54 billion, up 4% sequentially from $10.13 billion and up 75% from $6.01 billion year-earlier.

Net income was $1.9 billion, up sequentially from negative $85 million and up from $1.4 billion year-earlier.

EPS (earnings per share), diluted were $0.82, up sequentially from negative $0.04, and down 1% from $0.83 year-earlier.


Raised 2020 guidance. Revenue $41.5 to $42.0 billion. EPS GAAP $0.47 to $0.57, non-GAAP 6.25 to $6.35. Reaffirmed 2021 non-GAAP EPS guidance of $7.15 to $7.45.

Conference Highlights:

The Celgene acquisition closed on November 20, 2019, so Q3 is the third full quarter incorporating it. Most revenue increase y/y was due to the acquisition.

Giovanni Caforio, M.D., CEO of Bristol-Myers Squibb stated "Our financial strength and flexibility combined with our robust inline businesses, multiple launches and progress in our deep pipeline, including the promising results from the deucravacitinib trial, strongly position the company to deliver our mission and help more patients. The strength of our third quarter performance is a testament to the commitment of our people who continue to innovate and deliver novel medicines for patients with serious disease." Expects return to Opdivo revenue growth in 2021.

U.S. revenues increased 88% y/y to $6.54 billion. International revenue was up 58% y/y to $4.00 billion.

In August 2020, the U.S. District Court decided to uphold both the composition of matter patent (US 6,967,208) and formulation patent (US 9,326,945) covering Eliquis (apixaban).

In November 202, Bristol and MyoKardia announced the expiration of the waiting period on the offer to acquire all outstanding shares of MyoKardia for a purchase price of $225.00 per share in cash, or approximately $13.1 billion. In September announced successfully completed the transaction to acquire Forbius for their TGF-beta program, including its lead investigational asset AVID200, currently in Phase 1 studies for oncology and fibrosis. In August, announced entry into a definitive agreement with Dragonfly Therapeutics for the global exclusive license to its interleukin-12 (IL-12) investigational immunotherapy program, including its extended half-life cytokine DF6002.

Non-GAAP numbers: diluted EPS $1.63, flat sequentially from $1.63 and up 39% from $1.17 year-earlier. Net income $3.7 billion, down slightly sequentially from $3.75 billion, and up 95% from $1.9 billion year-earlier.

Cash and equivalents ended at $22 billion were up sequentially from $19.8 billion. Long-term debt was $45 billion (avg rate 3.4%). Does not plan share repurchases in the current environment. Committed to paying the dividend, but will focus on paying down debt.

sales in $ millions
Q3 2020
Q2 2020
Q3 2019
y/y change
Revlimid $3,027 $2,884 $0 na
Opdivo 1,780 1,823 1,817 -2%
Eliquis 2,095 2,163 1,928 9%
Orencia 826 750 767 8%
Pomalyst/Imnovid 777 745 0 na
Sprycel 544 511 558 -3%
Yervoy 446 369 353 26%
Abraxane 342 308 0 na
Empliciti 96 97 89 8%
Reblozyl 96 55 0 na
Inrebic 13 15 0 na
Zeposia 2 1 0 na
Onureg 3 0 0 na
Baraclude 100 121 145 -31%
Vidaza 106 126 0 na
Other 287 331 350 -18%
Total 10,540 na 6,007 75%

In September 2020, the company announced that the FDA approved Onureg (azacitidine, CC-486) for adult patients with acute myeloid leukemia (AML) who achieved first complete remission (CR) or CR with incomplete blood count recovery (CRi) following intensive induction chemotherapy and who are not able to complete intensive curative therapy.

In September 2020, with bluebird bio, announced that the FDA accepted the BLA for idecabtagene vicleucel (ide-cel; bb2121), an investigational B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR) T cell immunotherapy, for the treatment of adult patients with multiple myeloma who have received at least three prior therapies. PDUFA goal date is March 27, 2021

In November 2020, announced positive results from the Phase 3 POETYK PSO-1 trial evaluating deucravacitinib, a selective tyrosine kinase 2 (TYK2) inhibitor, for the treatment of patients with moderate to severe plaque psoriasis. POETYK-PSO-1 met both co-primary endpoints evaluating deucravacitinib versus placebo on the Psoriasis Area and Severity Index (PASI 75) and Physician Global Assessment (sPGA) scales and met multiple key secondary endpoints versus Otezla (apremilast). Believes should be the best oral option for psoriasis. In Phase 2 for psoriatic arthritis, lupus, crohn's, ulcerative colitis.

In October, the company and Exelixis announced the FDA accepted the sBLAsNDA), respectively, for Opdivo(nivolumab) in combination with Cabometyx (cabozantinib) for patients with advanced renal cell carcinoma (RCC). The PDUFA goal date is February 20, 2021.

In July resubmitted liso-cel BLA. In May 2020, Bristol announced that the FDA extended the action date by three months for the BLA for lisocabtagene maraleucel (liso-cel). The new U.S. FDA action date is November 16, 2020. In March, the company and bluebird bio had announced the submission of their Biologics License Application (BLA) to the U.S. FDA for idecabtagene vicleucel (ide-cel; bb2121), the investigational B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR) T-cell immunotherapy, for the treatment of adult patients with multiple myeloma who have received at least three prior therapies.

In May 2020 the FDA accepted for Priority Review the New Drug Application (NDA) for CC-486 for maintenance treatment of adult patients in remission with acute myeloid leukemia (AML) with an action date of September 3, 2020.

In March 2020 Zeposia (ozanimod) was approved by the FDA for relapsing/remitting multiple sclerosis. In August 2020 announced positive topline results in ulcerative colitis.

Cost of products sold was $2.50 billion. SG&A $1.71 billion. R&D $2.50 billion. Amortization $2.49 billion. Other income $0.92 billion. Total expenses $8.28 billion. Operating income $2.26 million. Tax expense $379 million.

Q&A summary:

TYK2 safety profile? JAK-like safety issue? Very happy with results. Clinically meaningful, superior to Otezla. TYK2 is a good mechanism for safety. Cannot reveal full data yet.

Opdivo for bladder cancer? Results were very good and we anticipate a good uptake if approved.

Deucravacitinib psoriatic arthritis? Ulcerative colitis? Looking for readouts, expects efficacy and safety.

First line lung Opdivo label expansion market share? Sequential growth, in U.S. was from favorable demand, offset by decline in IO eligibility. First line lung launch is going well, market share in high single digits. Launching against entrenched competitors.

Reblozyl by indication? High demand, good brand awareness. Predominant use is in MDS. Globally there may be more beta-thalessemia in some areas.

Celgene synergies? Going well, will have more after close of year.

Tolerability v. Otezla? Will be able to compare when full data is released. Dermatologists use an ascending treatment path: they try topicals, then orals, then biologics. We think we can have the top oral in the space.

Continuing FDA discussions re liso-cel. One facility inspection done, no update on the other [WM: could affect contingent rights security]. PDUFA 15 November. Will update on any regulatory discussions.

816 CR? We will present at a future regulatory meeting.

Liso-cel manufacturing inspections? FDA says all three plants need inspection. One Washington plant was inspected, the second is not scheduled yet. The problem is the pandemic. We hope to see the approval at some point. Cannot comment around inspection dialog specifically.

Discussed IP of Revlimid, sees it more as a slope than a cliff, full generic competition come in 2026, expects significant cash flow contribution through 2025. Pipeline progress gives us confidence we can renew the portfolio over this period.

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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 2020 William P. Meyers