Analyst Conference Summary


Bristol-Myers Squibb

conference date: October 27, 2021 @ 5:00 AM Pacific Time
for quarter ending: September 31, 2021 (third quarter 2021, Q3)

Forward-looking statements

Overview: Strong y/y revenue and profit growth.

Basic data (GAAP):

Revenue was $11.6 billion, down 1% sequentially from $11.7 billion and up 10% from $10.5 billion year-earlier.

Net income was $1.55 billion, up 46% sequentially from $1.06 billion and down 17% from $1.87 billion year-earlier.

EPS (earnings per share), diluted were $0.69, up 47% sequentially from $0.47, and down 16% from $0.82 year-earlier.


Slightly lowered 2021 GAAP EPS guidance to $2.68 to $2.83; non-GAAP EPS guidance slightly raised to between $7.40 and $7.55. Reaffirmed 2021 revenue at a high single-digit increase.

Conference Highlights:

Giovanni Caforio, M.D., CEO of Bristol-Myers Squibb stated "Our teams advanced the product portfolio and achieved significant regulatory and clinical milestones, including for the fixed-dose combination of relatlimab and nivolumab. Our deep and diverse product pipeline, commercial execution and financial flexibility provide a strong foundation that is enabling the company to bring new medicines that benefit patients with serious unmet needs, drive in-line product performance and deliver sustained growth." Realizes will lose exclusivity on some drugs in the next few years, sees newly approved and pipeline drugs leading to future growth despite that. Expects Opdivo sales to continue to grow due to international expansion and new indication launches. Newest products generated $344 million in the quarter. But Abcema sales limited by supply. Business development deals remain a priority. Committed to growing the dividend.

GAAP R&D expenses increased 30% to $3.3 billion in the quarter primarily due to an in-process research and development impairment charge. But the non-GAAP increase was 7%.

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 September 2021, the Court of Appeals for the Federal Circuit affirmed the U.S. District Court's August 2020 decision finding the composition of matter patent US 6,967,208 and formulation patent US 9,326,945 covering Eliquis valid and infringed. The earliest that generic manufacturers are permitted to launch their generic apixaban products is April 1, 2028, subject to additional appeals and challenges.

Non-GAAP numbers: diluted EPS $2.00, up 4% sequentially from $1.93 and up 23% from $1.63 year-earlier. Net income $4.5 billion, up 4% sequentially from $4.34 billion, and up 22% from $3.7 billion year-earlier.

Cash and equivalents ended at $15.7 billion up sequentially from $13.1 billion. total debt was $44.7 billion (avg rate 3.4%), with debt repayment of $6.0 billion year-to-date. $3.5 billion used for stock repurchases ytd.

sales in $ millions
Q3 2021
Q2 2021
Q3 2020
y/y change
Revlimid $3,347 $3,202 $3,027 11%
Opdivo 1,905 1,910 1,780 7%
Eliquis 2,413 2,792 2,095 15%
Orencia 870 814 826 5%
Pomalyst/Imnovid 851 854 777 10%
Sprycel 551 541 544 1%
Yervoy 515 510 446 15%
Abraxane 266 296 342 -22%
Empliciti 82 86 96 -15%
Reblozyl 160 128 96 67%
Inrebic 22 16 13 69%
Zeposia 40 28 2 na
Onureg 21 12 3 na
Breyanzi 30 17 0 na
Abecma 71 24 0 na
Baraclude 105 109 100 5%
Vidaza 36 45 106 66%
Other 339 319 287 18%
Total 11,624 11,703 10,540 10%

In October 2021 the EMA approved mavacamten for obstructive hypertrophic cardiomyopathy. Also Opdivo was approved in combination for first-line HER2-negative gastric, gastroesophageal junction, esophageal adenoccarcinoma expessing PD-L1.

In September 2021 the FDA gave a PDUFA date of May 28, 2022 for Opdivo for esophageal squamous cell carcinoma (ESCC). In July, the EC had approved Opdivo for the adjuvant esophageal or GEJ cancer who have residual pathologic disease following prior neoadjuvant chemoradiotherapy. In August gave approval for Opdivo for adjuvant urothelial carcinoma.

The FDA assigned a PDUFA goal date of March 19, 2022 for the relatlimab and nivolumab fixed-dose combination for unresectable or metastatic melanoma.

The CHMP of the EMA in October 2021 recommended approval of Zeposia for moderate to severe ulcerative colitis.

The FDA gave a December 23, 2021 PDUFA date for Orencia for graft versus host disease.

At ASCO presented Phase 2/3 data for relatlimab, a LAG-3 antibody, and nivolumab, showing positive PFS compared to Opdivo for melanoma.

In 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.

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.

Cost of products sold was $2.29 billion. SG&A $1.79 billion. R&D $3.25 billion. Amortization $2.55 billion. Other income $409 million. Total expenses $9.47 billion. Operating profit $2.16 billion. Tax expense $605 million.

Q&A summary:

New launches, underlying demand? Believes cell therapy market will grow over time. Committed to a broad cell therapy portfolio. Abecema and Brianzi underlying demand remains strong. Vector supply constraints may not ease until second half of 2022.

Flat Opdivo sequentially? Flat sequential was due to inventory dynamics, growth was solid y/y. Was in key tumors, including new approvals. Sees momentum into 2022.

Deucravacitinib issues? We are confident the data establishes it as best in class of oral agents. Believes can get approval by 2H 2022, but no specific time for filing. Trials are ongoing in various indications, may or may not see some of that data in 2022.

Revlimid erosion expected in 2022? We see volume-limited generic impact in the U.S. in 2022 with generic impact ex-US. No estimate of magnitude given. Expects to grow revenue even during loss of exclusivity period for Revlimid. Strong Opdivo and new launch brands should more than compensate Revlimid erosion.

Underperforming stock, affect on capital deployment? New medicine portfolio is rapidly evolving, late stage pipeline is rich. BD is a priority for capital, but we will be disciplined. Looking to raise dividend, continue share repurchases.

LAG3 data timing? Survival data is dependent on events. Then present at medical conferenece. No exact timing. TIGIT new tumor types would depend of future results.

Deucravacitinib sales force? Building out sales teams, medical teams in place for several months now.

Cost savings plans? Execution is going well, now aiming at $3 billion, already achieved 2.5.

TYK2? We believe ours will not have a JAK type signature. Cardio and infections data looks good.

PD-1 in Asian populations? We have seen no significant population differences.

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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