Analyst Conference Summary


Bristol-Myers Squibb

conference date: July 27, 2023 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2023 (second quarter 2023, Q2)

Forward-looking statements

Overview: Declining revenue due to generic competition.

Basic data (GAAP):

Revenue was $11.23 billion, down 1% sequentially from $11.34 billion and down 6% from $11.89 billion year-earlier.

Net income was $2.07 billion, down 8% sequentially from $2.26 billion and up 46% from $1.42 billion year-earlier.

EPS (earnings per share), diluted were $0.99, down 7% sequentially from $1.07, and up 50% from $0.66 year-earlier.


Pretty bad downward guidance revision for 2023. Revenue now expected in low single-digit decline rather than increase. Revlimid revenue much lower. Gross margin 76%. Diluted EPS 43.72 to $4.02, non-GAAP$7.35 to $7.65.

Reaffirmed 2025 guidance.

Conference Highlights:

Giovanni Caforio, M.D., CEO of Bristol-Myers Squibb stated "We saw a more rapid than expected decline in Revlimid sales in the quarter, which led to a revision of our financial guidance for the year. Importantly, we continued to advance the renewal and diversification of our portfolio, delivered strong performance across our key in-line products and new product portfolio, while continuing to advance our pipeline. I am confident in our ability to drive future growth and innovation while carrying out our mission to help patients prevail over serious diseases... We do not take an [guidance] adjustment of this magnitude lightly." Reaffirmed 2025 guidance. GAAP income tax benefit was $218 million despite pre-tax earnings of $1.9 billion, due to a non-U.S. tax ruling regarding the deductibility of a statutory impairment. On a non-GAAP basis, effective tax rate changed from 17.0% to 16.9%. New product portfolio revenues increased to $862 million, compared to $482 million y/y, up 79%, driven by demand for Opdualag, Reblozyl, Breyanzi, Abecma, Camzyos and Zeposia.

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

Authorized a $4 billion share buy-back in Q3. Part of the Revlimid and Pomalyst decline was due to giving more free drug to patients under its assistance program. But by 2025 90% of revenue should come from in-line and new products.

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

In Q2 the EC approved Camzyos for symptomatic New York Heart Association class II-III obstructive hypertrophic cardiomyopathy (HCM) in adult patients. The FDA approved an sNDA for HCM.

In Q2 2023 Milvexian was granted fast track status for stroke, ACS, and AF. In colaboration with Janssen/J&J.

In Q2 2023 Opdivo (nivolumab) had a CHMP recommendation for adjuvant completely resected IIB or IIC melanoma. The EC approved an Optdivo combo for neoadjuvant resectable NSCLC with high PD-L1 expression. The Phase 3 CheckMate-7DX combo trial for mCRPC failed. But CheckMate-901 did meet the endpoints for urothelia carcinoma for patients eligible for cisplatin therapy. In combo with Yervoy the four-year long-term study for NSCLC showed durable survival benefits.

Repotrectinib, acquired with Turning Point Therapeutics, an ROS1/NTRK inhibitor for NSCLC, was granted a PDUFA date of November 27, 2023.

In Q2 2023 the EC approved Breyanzi for DLBCL, HBBCL, PMLBCL, and FL grade 3b.

In Q2 the FDA accepted the BLA for Reblozyl label expansion, with a PDUFA date of August 28, 2023. Also a Phase 3 study showed superiority over epoetin alfa.

Breyanzi for FL and MCL showed strong results in a Phase 2 trial.

In Q2 the Phase 2 study evaluating BMS-986278, a potential first-in-class oral, lysophosphatidic acid receptor 1 (LPA1) antagonist in patients with idiopathic pulmonary fibrosis, showed 26 weeks of treatment with twice-daily 60mg dose reduced the rate of lung function decline, supporting progression into Phase 3.

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.

Non-GAAP numbers: diluted EPS $1,75, down % sequentially from $2.05 and down 9% from $1.93 year-earlier. Net income $3.7 billion, down 13% sequentially from $4.25 billion, and down 12% from $4.2 billion year-earlier.

Cash and equivalents ended at $8.7 billion down sequentially from $9.3 billion. Cash flow from operations $1.9 billion. Long-term debt was $34.7 billion. $0 billion used for stock repurchases, but $7 billion remains authorized.

sales in $ millions
Q2 2023
Q1 2023
Q2 2022
y/y change
Revlimid $1,468 $1,750 $2,501 -41%
Opdivo 2,145 2,202 2,063 4%
Eliquis 3,204 3,423 3,235 -1%
Orencia 927 764 876 6%
Pomalyst/Imnovid 847 832 908 -7%
Sprycel 458 429 544 -16%
Yervoy 585 508 525 11%
Abraxane 258 239 241 7%
Reblozyl 234 206 172 36%
Inrebic 27 25 23 17%
Zeposia 100 78 66 52%
Onureg 44 34 32 38%
Breyanzi 100 71 39 156%
Abecma 132 147 89 48%
Opdualag 154 117 58 166%
Camzyos 46 29 3 na
Sotyktu 25 16 0 na
Mature, Other 472 467 512 -8%
Total 11,226 11,337 11,887 -6%

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 $2.88 billion. SG&A $1.93 billion. R&D $2.26 billion. Amortization $2.26 billion. Acquired IPRD $158 million. Other income $116 million. Total expenses $9.37 billion. Operating profit $1.86 billion. Tax benefit $218 million.

Q&A selective summary:

When do you think we will see the kind of inflection that will build confidence? We are confident in the progress of the new product portfolio, expecting to double its revenue by 2025. Camzyos (mavacampten) launch is on track.

Rational for accelerated share repurchase vs. investing more in the business? We had a $6 billion authorization outstanding. It shows our confidence in our future performance. We are also committed to business development.

Risk of Revlemid copay issue recurrance? Expect that to be limited to this year. Applications for assistance have been returning to normal. Also Part D rules will be reformed next year, which should help.

Sotyktu? Launch is going well, patients will be transitioning to commercial drug this year.

Reblozyl label prospects? We are in discussions with regulatory agencies. All patient subsets were better able to stay off transfusions for long durations. So we are confident. Our team is ready to launch, physicians are eager for it.

Abecma ramp? Our only guidance change was for Revlimid and Pomalyst. Increasing capacity for Abecma and Breyanzi. Looking to rapidly expand our footprint. Our cell therapy pipeline is also exciting.

LPA1 market opportunity? IPF (ideopathic pulmonary fibrosis) and PPF have high unmet medical need. Our early studies of BMS-986278 were positive. Will share data at a medical conference. Phase 3 trials will begin later this year or early next year.

See IRA Part D redesign. We do not see a meaningful IRA impact for us until 2026.

Revlimid, questioned belief in recovery? Saw some softness towards end of Q1. More generics entered market in March, but also saw free drug assistance. Assessing those inputs, gave our analysis. Generic variability is at play, but not a reason for lower guidance. Does not expect free product problem to continue. Generic erosion assumptions remain unchanged, $1.5 billion in 2024 and $2 billion in 2025.

We remain committed to doubling the sales of new products this year.

Does EPS guidance for 2023 include the stock buy back? Yes.

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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 2023 William P. Meyers