Analyst Conference Summary

biotechnology

conference date: April 27, 2023 @ 5:00 AM Pacific Time
for quarter ending: March 31, 2023 (first quarter 2023, Q1)

Forward-looking statements

Overview: Good EPS, revenue still declining.

Basic data (GAAP):

Revenue was $11.34 billion, down 1% sequentially from $11.41 billion and down 3% from $11.65 billion year-earlier.

Net income was $2.26 billion, up 12% sequentially from $2.02 billion and up 81% from $1.28 billion year-earlier.

EPS (earnings per share), diluted were $1.07, up 13% sequentially from $0.95, and up 81% from $0.59 year-earlier.

Guidance:

Revised the tax rate on prior 2023 guidance down to 21% GAAP, and so increased GAAP EPS to $4.10 to $4.40. No change in non-GAAP numbers.

Conference Highlights:

Giovanni Caforio, M.D., CEO of Bristol-Myers Squibb stated "We continue to successfully execute against our key strategic priorities and meaningfully advance our portfolio renewal strategy, achieving important regulatory and clinical milestones that will benefit patients with serious unmet needs. We remain focused on commercial execution, progressing our pipeline and leveraging our strong financial foundation to invest in the next wave of innovation and deliver value to all of our stakeholders" New products are not quite ramping revenue as fast as older product revenue declines, but expects new product revenue to double in 2023. FX was a headwind; U.S. revenue was up 4% y/y, ex-US down 16%. Business development remains the top priority for capital allocation.

Giovanni Caforio will be stepping down as CEO. Chris Boerner will become CEO on November 1, 2023.

Sotyktu received an EU approval for the treatment of adults with moderate-to-severe plaque psoriasis in Q2 2023.

In Q1 the CHMP recommended Camzyos for symptomatic New York Heart Association class II-III obstructive hypertrophic cardiomyopathy (HCM) in adult patients.

The FDA accepted the sBLA for Opdivo for adjuvant monotherapy for patients with completely resected stage IIB or IIC melanoma. The PDUFA date is October 13, 2023. In Q1 data continued to be read out from the CheckMate trials.

Bristol plans to launch repotrectinib, acquired with Turning Point Therapeutics, an ROS1/NTRK inhibitor for NSCLC, in 2H 2023.

In Q3 2022 the FDA has accepted a supplemental new drug application for Camzyos (mavacamten) for an expanded indication for the treatment of adults with symptomatic New York Heart Association class II-III obstructive hypertrophic cardiomyopathy and assigned a PDUFA goal date of June 16, 2023. Camzyos for symptomatic obstructive hypertrophic cardiomyopathy was approved by the FDA in April 2022.

With 2seventy bio, FDA PDUFA date for Abecma for r/r multiple meloma fourth line is December 16, 2023. In Q1 2023 data from Phase 3 KarMMa-3 Study showed Abecma reduced the risk of disease progression or death by 51% versus standard regimens in earlier lines of therapy for r/r multiple myeloma.

In Q1 the CHMP recommended approval of Breyanzi for adult patients with: diffuse large B-cell lymphoma, high grade B-cell lymphoma, primary mediastinal large B-cell lymphoma, high grade B-cell lymphoma, primary mediastinal large B-cell lymphoma and follicular lymphoma grade 3B; who relapsed within 12 months from completion of, or are refractory to, first-line chemoimmunotherapy.

Non-GAAP numbers: diluted EPS $2.05, up 13% sequentially from $1.82 and up 5% from $1.96 year-earlier. Net income $4.25 billion, up 9% sequentially from $3.9 billion, and flat from $ billion year-earlier.

Cash and equivalents ended at $9.3 billion up sequentially from $9.25 billion. Cash flow from operations $3.0 billion. Long-term debt was $38 billion, reduced by $1.6 billion in Q1. $0 billion used for stock repurchases, but $7 billion remains authorized.

In Q4 2022 Reblozyl received a CHMP approval for anemia from non-transfusion dependent beta thalassemia; in global collaboration with Merck. Japan approved Breyanzi for large B-cell lymphoma, while Phase 2 data for CLL and SLL were positive.

The mid to late stage pipeline includes repotrectinib, farletuzumab exteribulin, AR-LDD, iberomide, mezigdomide, alnuctamab BCMA TCE, CC-99282, cendakimab, LPA1, and milvexian.

Cost of products sold was $2.57 billion. SG&A $1.76 billion. R&D $2.32 billion. Amortization $2.26 billion. Acquired IPRD $75 million. Other income $413 million. Total expenses $8.57 billion. Operating profit $2.77 billion. Tax benefit $503 million.

Q&A selective summary:

Sotyktu launch? Going very well. Building a position to negotiate with payers. Will not see substantive changes in market access until 2024.

Crohn's disease trial failure? The rest of the Sotyktu development program remains broad. No proof of concept was established in IBD, nor did we see a signal in Crohn's. No safety issue. We are continuing with UC higher dose trials.

CD19 is same platform we tested on heme malignancies. Taking forward in SLE. Good dialog with FDA on Phase 1 initialization. Will be a global trial. Could expand to other indications.

Eliquis and government pricing? It will be in the first wave hit by IRA. But we are not sure how it will play out. Shared with Pfizer.

Capital allocation? Near to market or pipeline prefered? We have good capacity to support ongoing launches and make deals. We look at early deals that strengthen the long term and also near-term opportunities like Turning Point. Still committed to levering debt, growing the dividend, opportunistic on share repurchases.

How do you see Revlimid in 2023 by quarter? $6.5 billion full year revenue. Quarters depend on how the generic makers come to the market. Last year Q1 was our toughest comp. We will update if our projection changes.

Immunology for Bristol? We are excited about Zeposia and Sotyktu. We will allocate resources to make sure that portfolio is successful.

Opdualag? Lots of trials, data coming in. Looking for best path in NSCLC. Opdivo subcutaneous version could be helpful in certain situations. Impact under IRA is unknown.

Reblozyl first line? Met primary and secondary endpoints in trial. Showed good longevity for transfusion independence. It could double the revenue opportunity over the current label.

Abecma space is evolving rapidly. Seeing real patient benefit. We see room for multiple competitors in this space. We need to see the full data set and real world results.

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