Analyst Conference Summary


Bristol-Myers Squibb

conference date: July 28, 2021 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2021 (second quarter 2021, Q2)

Forward-looking statements

Overview: Strong revenue growth, but Q2 2020 was a bit of an easy comparison due to the pandemic.

Basic data (GAAP):

Revenue was $11.7 billion, up 5% sequentially from $11.1 billion and up 16% from $10.1 billion year-earlier.

Net income was $1.06 billion, down 47% sequentially from $2.0 billion and up from negative $0.9 billion year-earlier.

EPS (earnings per share), diluted were $0.47, down 48% sequentially from $0.89, and up from negative $0.04 year-earlier.


While keeping 2021 non-GAAP EPS guidance at $7.35 to $7.55, lowered GAAP EPS guidance to $2.77 to $2.97 (from $3.18 to $3.38). Q3 revenue expected similar to Q2.

Conference Highlights:

Sales growth was led by Eliquis. Yervoy growth was stong. Several recent pipeline additions are starting to generate substantial revenue. Keep in mind Revlimid, the largest revenue generator, will go off patent in 2026, with some limited licensing starting in 2022.

Giovanni Caforio, M.D., CEO of Bristol-Myers Squibb stated "We delivered a strong quarter across each of our four therapeutic areas, including building momentum for our new product portfolio and Opdivo returning to growth. . . Our robust and diverse pipeline combined with our clinical and commercial execution strengthen our confidence in our ability to renew the portfolio and achieve sustained growth." Believes the Launch Portfolio could generate $20 to $25 billion new revenue in 2029. New launch therapies generated $225 million in the quarter.

The discrepancy between GAAP and non-GAAP profits was largely because Research and development expenses increased 30% to $3.3 billion in the quarter, primarily due to higher license and asset acquisition charges and an in-process research and development impairment charge. On a non-GAAP basis, research and development expenses increased 4% to $2.3 billion in the quarter primarily due the broader portfolio and lower spending in the prior year due to COVID-19. Also the GAAP effective tax rate was 31.7%, while the non-GAAP effective tax rate was 16.9%.

In June 2021, the company and Eisai announced that the companies entered into an exclusive global strategic collaboration agreement for the co-development and co-commercialization of MORAb-202, an antibody drug conjugate.

In May, the company and Agenus (AGEN) announced that they have entered into a definitive agreement for a global exclusive license to the Agenus proprietary bispecific antibody program, AGEN1777, that blocks TIGIT and a second undisclosed target.

Non-GAAP numbers: diluted EPS $1.93, up 11% sequentially from $1.74 and up 18% from $1.63 year-earlier. Net income $4.34 billion, up 8.5% sequentially from $4.0 billion, and up 16% from $3.75 billion year-earlier.

Cash and equivalents ended at $13.1 billion up sequentially from $11.0 billion. Long-term debt was $45.2 billion (avg rate 3.4%), with debt repayment of $5.7 billion year-to-date. $3 billion used for stock repurchases ytd. Plans $1 billion in share repurchases in remainder of 2021 and continued dividend growth.

sales in $ millions
Q2 2021
Q1 2021
Q2 2020
y/y change
Revlimid $3,202 $2,944 $2,884 11%
Opdivo 1,910 1,720 1,653 16%
Eliquis 2,792 2,886 2,163 29%
Orencia 814 758 750 9%
Pomalyst/Imnovid 854 773 745 15%
Sprycel 541 470 511 6%
Yervoy 510 456 369 %
Abraxane 296 314 308 -4%
Empliciti 86 85 97 -11%
Reblozyl 128 112 55 133%
Inrebic 16 16 15 7%
Zeposia 28 18 1 na
Onureg 12 15 0 na
Breyanzi 17 0 0 na
Abecma 24 0 0 na
Baraclude 109 113 121 -10%
Vidaza 45 54 126 -64%
Other 319 339 331 -4%
Total 11,703 11,072 10,129 16%

In May 2021 new positive analysis and Phase 3 data for mavacamten for obstructive hypertrophic cardiomyopathy was reported at ACC.21.

In Q2 2021 Opdivo made clinical and regulatory progress, notably approved in the EU, in combination with Yervoy, for metastatic colorectal cancer. Opdivo alone was recommended by the EHMP for gastroesophageal junction cancer. Also EU approval for pleural mesotherlioma. In the US approved for esophageal cancer or gastroesophageal junction cancer. But in July 2021 announced Phase 3 CheckMate-649 trial did not meet the secondary endpoint, overall survival, when combined with Yervoy for metastatic gastric cancer (with positive test for PD-L1). For platinum eligible head and neck squamous cell carcinoma, CheckMate-651 did not meet its primary endpoints, despite a positive trend. At ASCO presented Phase 2/3 data for relatlimab, a LAG-3 antibody, and nivolumab, showing positive PFS compared to Opdivo for melanoma.

In June 2021 the CHMP recommended granting conditional marketing authorization for Abecma for relapses and refractory multimple myeloma with at least three prior lines of therapy.

In June 2021 reported positive topline Phase 3 Breyanzi for LBCL, compared to the current standard of treatment.

Onureg received full EU approval as a maintenance therapy for acute myeloid leukemia patients in remission, in June 2021.

In May 2021 the FDA approved Zeposia for ulcerative colitis.

In February, 2021 Bristol announced results from POETYK PSO-2, the second Phase 3 trial evaluating deucravacitinib for the treatment of patients with moderate to severe plaque psoriasis. POETYK PSO-2 met both co-primary endpoints. 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.

Breyanzi and Abecma cell therapies approved in Q1.

Cost of products sold was $2.45 billion. SG&A $1.88 billion. R&D $3.27 billion. Amortization $2.54 billion. Other income $2 million. Total expenses $10.15 billion. Operating profit $1.55 billion. Tax expense $492 million.

Q&A summary:

Opdivo covid impact, gastric rollout? We have seen recovery in Q2, though still lagging pre-pandemic levels. Gastric launch is going well, 35% share of first-line metastatic.

Mavacamten competition? Comparisons are apples to oranges. No differentiation apples to apples. Also, injection faction comparison are roughly even. We have our Phase 3 data, have not seen it for the competitor.

Cell therapy rollouts? Great launch start. Shows investment was worthwhile. The profiles are resonating well with customers and address significant unmet need. Increasing manufacturing capabilities, currently constrained.

Deucravacitinib? Looking for Phase 2 data by end of year.

We intend to increase our focus on neurodegenerative disease. It helps that with the Aduhelm approval we have clearer regulatory goals.

Multiple myeloma strategy, prioritization? Abecma is addressing significant unmet need. Vector supply global shortage is affecting multiple companies. MM pipeline is strong. Cel mods will be the future backbone to replace the Imids. BCMA targetted therapies, including TCSs, will continue to be developed and moved up the lines of therapy.

Eliquis legal? We are pleased with last year's decision on formulation. The appeal is scheduled for September.

Reblozyl sales? Pandemic still having some effect, but saw improvement in Q2. International launch is very early, but acceptance has been good in Germany, and more EU nations should start up in the coming months.

Deucravacitinib CV risk? No CV risk seen in the data. Looking for approval in second half of next year.

Factor XIa data to look for? Aim is to see if it can be combined with background therapy, a good outcome would manage the risk profile.

Are you going to take additional factor XIa compounds into the clinic? We do have a backup, not accelerating the pace on that at this time.

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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 2021 William P. Meyers