Analyst Conference Summary

biotechnology

conference date: April 29, 2022 @ 5:00 AM Pacific Time
for quarter ending: March 31, 2022 (first quarter 2022, Q1)

Forward-looking statements

Overview: Solid y/y growth and strong new product portfolio.

Basic data (GAAP):

Revenue was $11.6 billion, down 3% sequentially from $12.0 billion and up 5% from $11.1 billion year-earlier.

Net income was $1.28 billion, down 46% sequentially from $2.37 billion and down 37% from $2.03 billion year-earlier.

EPS (earnings per share), diluted were $0.59, down 45% sequentially from $1.07, and down 34% from $0.89 year-earlier.

Guidance:

Adjusted 2022 full year guidance: revenue flat from 2021. GAAP EPS lowered to $2.92 to $3.22; non-GAAP to 47.44 to $7.74. This mainly reflects foreign exchange headwinds and faster than expected Revlimid revenue declines in Europe.

Conference Highlights:

Giovanni Caforio, M.D., CEO of Bristol-Myers Squibb stated "We continue to execute against our strategic priorities, deliver solid revenue and earnings growth and advance our product pipeline. Thanks to our team’s hard work and dedication, we achieved regulatory approvals of Opdualag and Camzyos, our new first-in-class medicines for patients living with metastatic melanoma and symptomatic obstructive hypertrophic cardiomyopathy, respectively. These milestone achievements, combined with our promising product pipeline and strong financial flexibility, provide a solid foundation that will enable us to deliver sustained growth and long-term benefits for our patients." The quarter saw the introduction of Revlimid generics.

The main reasons non-GAAP results and 2021 results were well above GAAP results and 2022 results were a $333 million acquired R&D charge and a $649 million other charge (mainly equity investment losses) in 2022, reversing $702 in other income in Q1 2021. The acquired IPRD increased was primarily due to up-front and milestone charges relating to the Dragonfly and Immatics licensing arrangements. Beginning in Q1 2022 significant R&D charges or other income resulting from upfront or contingent milestone payments from asset acquisitions or licensing of third-party intellectual property rights are no longer excluded from non-GAAP results.

Opdualag (relatlimab and nivolumab) fixed-dose combination for unresectable or metastatic melanoma was approved by the FDA in March 2022.

Camzyos (mavacamten) for symptomatic obstructive hypertrophic cardiomyopathy was approved by the FDA in April 2022.

In February 2022 announced a $15 billion share repurchase program, including $5 billion in Q1.

The FDA in December 2021 approved Orencia for graft versus host disease.

In Q1 2022 the FDA approved Opdivo with chemotherapy as neoadjuvant treatment for resectable NSCLC. The EC approved Opdivo for the adjuvant treatment of adults with high-risk muscle-invasive urothelial carcinoma with PD-L1 expression. The EC also approved Opdivo in combination with Yervoy for the first-line treatment of adult patients with unresectable advanced, recurrent or metastatic esophageal squamous cell carcinoma with tumor cell PD-L1 expression.

In January 2022, the CHMP in the EU recommended approval of Breyanzi (lisocabtagene maraleucel) for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma, primary mediastinal large B-cell lymphoma, and follicular lymphoma grade 3B after at least two prior therapies.

The bempagaldeskeukin plus Opdivo partnership with Nextar (NKTR) Phase 3 melanoma trial failed, so the program has been terminated in all indications.

In January 2022, the CHMP in the EU recommended approval of Breyanzi (lisocabtagene maraleucel) for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma, primary mediastinal large B-cell lymphoma, and follicular lymphoma grade 3B after at least two prior therapies

In Q4 2021 the FDA accepted the NDA and the EMA validated the Marketing Authorization Application for deucravacitinib for the treatment of adults with moderate to severe plaque psoriasis. The FDA assigned a PDUFA goal date of September 10, 2022. Japan also accepted the NDA for deucravacitinib for the treatment of adults with moderate to severe plaque psoriasis, pustular psoriasis and erythrodermic psoriasis.

In January 2022, the Bristol and Century Therapeutics announced a research collaboration and license agreement to develop and commercialize up to four induced pluripotent stem cell derived, engineered natural killer cell or T cell programs for hematologic malignancies and solid tumors.

Non-GAAP numbers: diluted EPS $1.96, up 7% sequentially from $1.83 and up 13% from $1.74 year-earlier. Net income $4.25 billion, up 4% sequentially from $4.1 billion, and up 7% from $3.96 billion year-earlier.

Cash and equivalents ended at $15.0 billion down sequentially from $17.0 billion. Cash flow from operations $3.8 billion. Long-term debt was $37.5 billion (avg rate 3.4%). $4.25 billion used for stock repurchases.

In December 2022 the FDA accepted for priority review the supplemental Biologics License Application for Reblozyl for the treatment of anemia in adults with non-transfusion dependent beta thalassemia. PDUFA goal date is June 27, 2022. The EMA also validated the Type II variation for Reblozyl for NTD beta thalassemia. The applications are based on results from the Phase 2 BEYOND trial.

In December 2021 at ASH, data from the Phase 3 TRANSFORM trial, showed Breyanzi significantly improved EFS compared to chemotherapy plus autologous stem cell transplant as second line treatment in adults with relapsed or refractory large B-cell lymphoma.

In November 2021, the Phase 3 CheckMate 816 trial met the co-primary endpoint of improved event-free survival (EFS) in patients with resectable Stage IB to IIIA non-small cell lung cancer.

In September 2021 the FDA gave a PDUFA date of May 28, 2022 for Opdivo for esophageal squamous cell carcinoma (ESCC).

Cost of products sold was $2.47 billion. SG&A $1.83 billion. R&D $2.26 billion. Amortization $2.42 billion. Acquired IPRD $333 million. Other expense $649 million. Total expenses $9.96 billion. Operating profit $1.69 billion. Taxes $404 million.

Q&A summary:

Camzyos uptake? Community is excited about this. Rems is important to insure patient safety and benefit. Titration period and eligibility given background meds. Seems manageable. Echo monitoring period is not seen as a concern, can be done by a local physician. Patients will be highly motivated.

Milvexian factor XIa? Confident in mechanism of action. Will work with partner Janssen on indications to pursue. Will share when ready. Is in Ph2 SSP trial.

Camzyos will not be on formulary on day one, but other than that expect minimal barriers. Medicare share will grow over time as affordability issues decline.

Breyanzi launch, manufacturing? Happy with launch. Strong physician interest. Growing market share, seen as best in class. Looking forward to label expansion into second-line. Expanding capacity by midyear.

Zeposia access issues? Happy with progress despite gross-to-net and inventory issues. We need to improve access and drive volume. We have broad formulary access, we are driving intent to prescribe. Patients mostly get triaged to bridge program, then we have to convert them to commercial.

Revlimid future? In U.S. generic entry came in later than expected, but that means we will see a faster decline in Q2. In Europe erosian was faster. We think revenue will decline to around $2 billion in 2023 as more generics come to the market.

Milvexian timeline? No change, the words mid-year v. second quarter were not meant to indicate a change.

Deucravacitinib ramp? Volume is important. Psoriasis less competitive than UC. Payers are moving to more open formulary access. Assumes no black box warning. Hope to brand as oral of choice.

M and A? We executed a few deals in the last few months. Realignment of market values from extremely high to present values.

Opdualag launch? Reaction from physicians is positive, aligned with expectations. Initial focus is on PD1 monotherapy segment of first line melanoma market.

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