The FINANCIAL — Bristol-Myers Squibb Company on February 5 reported results for the fourth quarter and full year of 2017, which were highlighted by strong sales for Opdivo and Eliquis along with regulatory and clinical progress in Oncology for Opdivo and the Opdivo plus Yervoy combination.
“I am proud of our results in 2017, with sales growth driven by strong commercial performance of our prioritized brands and important scientific advances we are making across our pipeline,” said Giovanni Caforio, M.D., chairman and chief executive officer, Bristol-Myers Squibb. “Additionally, we believe the exciting results from CheckMate -227 that we announced today are a meaningful step forward for patients with lung cancer. As we begin 2018, I am confident that we are well positioned for long-term growth through our strong commercial and R&D capabilities in bringing transformational medicines to patients with serious diseases.”
FOURTH QUARTER FINANCIAL RESULTS
Bristol-Myers Squibb posted fourth quarter 2017 revenues of $5.4 billion, an increase of 4% compared to the same period a year ago. Revenues increased 2% when adjusted for the impact of foreign exchange.
U.S. revenues increased 7% to $2.9 billion in the quarter compared to the same period a year ago. International revenues increased 1%. When adjusted for foreign exchange impact, international revenues decreased 3%.
Gross margin as a percentage of revenue decreased from 73.6% to 69.3% in the quarter primarily due to product mix.
Marketing, selling and administrative expenses decreased 11% to $1.3 billion in the quarter.
Research and development expenses increased 37% to $1.9 billion in the quarter primarily due to license and asset acquisition charges of $377 million in the fourth quarter of 2017.
The effective tax rate increased to 434% in the quarter from 17% in the fourth quarter last year primarily due to a one-time $2.9 billion charge resulting from U.S. tax reform.
The company reported net loss attributable to Bristol-Myers Squibb of $2.3 billion, or $1.42 per share, in the fourth quarter compared to net earnings of $894 million, or $0.53 per share, for the same period in 2016. The results in the current quarter include the significant transitional impact from U.S. tax reform.
The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.1 billion, or $0.68 per share, in the fourth quarter, compared to $1.1 billion, or $0.63 per share, for the same period in 2016.
Cash, cash equivalents and marketable securities were $9.3 billion, with a net cash position of $1.3 billion, as of December 31, 2017.
In December, the company announced the U.S. Food and Drug Administration (FDA) accepted its supplemental Biologics License Application for priority review of Opdivo plus Yervoy to treat intermediate- and poor-risk patients with advanced renal cell carcinoma (RCC). The application has an action date of April 16, 2018.
In December, the company announced the FDA approved Opdivo injection for intravenous use for the adjuvant treatment of patients with melanoma with involvement of lymph nodes or metastatic disease who have undergone complete resection.
In November, the company announced the European Medicines Agency (EMA) validated its type II variation application, which seeks to expand the current indications for Opdivo plus Yervoy to include the treatment of intermediate- and poor-risk patients with advanced RCC.
In October, the company announced the EMA validated its type II variation application, which seeks to expand the current indications for Opdivo to include the treatment of patients with melanoma who are at high risk of disease recurrence following complete surgical resection. Validation of the application confirms the submission is complete and begins the EMA’s centralized review process.
In February, the company announced that the pivotal Phase 3 Checkmate -227 study demonstrated superior progression-free survival with the combination of Opdivo plus Yervoy versus chemotherapy in first-line non-small cell lung cancer (NSCLC) patients with high tumor mutation burden, regardless of PD-L1 expression. The company also announced that the trial will continue as planned to assess the Opdivo plus Yervoy combination for the co-primary endpoint of overall survival in patients who express PD-L1.
In January, the company announced new data from a cohort of the Phase 2 CheckMate -142 trial evaluating Opdivo plus Yervoy for the treatment of patients with DNA mismatch repair deficient (dMMR) or microsatellite instability-high (MSI-H) metastatic colorectal cancer (mCRC).
In December, at the American Society of Hematology Annual Meeting, the company and Seattle Genetics announced updated data from an ongoing Phase 1/2 clinical trial evaluating Adcetris® (brentuximab vedotin) in combination with Opdivo in relapsed or refractory classical Hodgkin lymphoma.
In December, the FDA lifted partial clinical holds placed on CA209 -039 and CA204142, the Phase 1 and 2 clinical trials investigating Opdivo-based combinations in patients with relapsed or refractory multiple myeloma, respectively.
In November, the Phase 3 study CheckMate -078, evaluating Opdivo versus docetaxel in previously treated advanced or metastatic NSCLC, was stopped early because the study met its primary endpoint, demonstrating superior overall survival (OS) in patients receiving Opdivo compared with the control arm. CheckMate -078 is a multinational Phase 3 study with predominantly Chinese patients.
In November, at the Society for Immunotherapy of Cancer Annual Meeting, the company announced results from CheckMate -214, a Phase 3 trial evaluating the combination of Opdivo plus Yervoy compared to sunitinib in intermediate- and poor-risk patients with previously untreated advanced or metastatic RCC, as well as results from an exploratory analysis of PD-L1 expression across subgroups.
In November, at the International Kidney Cancer Symposium, the company announced a three-year OS update from its Phase 3 CheckMate -025 study, evaluating patients treated with Opdivo versus everolimus in previously treated advanced RCC.
In November, the company announced the FDA has expanded the indication for Sprycel tablets to include the treatment of children with Philadelphia chromosome-positive chronic myeloid leukemia in chronic phase.
In December, at the American Society of Hematology Annual Meeting, the company announced data from the Phase 2 CA180-372 study in pediatric patients with newly diagnosed Philadelphia chromosome-positive (Ph+) acute lymphoblastic leukemia (ALL) treated with Sprycel added to a chemotherapy regimen modelled on a Berlin-Frankfurt-Munster high-risk backbone.
In January, the company announced that the European Commission expanded the indication of Yervoy to include treatment of advanced (unresectable or metastatic) melanoma in pediatric patients 12 years of age and older.
Investigational Compound Highlights
In November, at the Society for Immunotherapy of Cancer Annual Meeting, the company announced results from studies evaluating BMS-986205, an investigational IDO1 inhibitor, and cabiralizumab (FPA008), an investigational anti-CSF-1 receptor antibody, in combination with Opdivo.
CA017-003: Data from a Phase 1/2a dose escalation and expansion study of BMS-986205 in combination with Opdivo in heavily pre-treated bladder and cervical cancer patients.
NCT02526017: Results from a Phase 1a/1b dose escalation and expansion study with Five Prime Therapeutics, Inc. evaluating the safety, pharmacokinetics and pharmacodynamics of cabiralizumab in combination with Opdivo in patients with advanced solid tumors.
FOURTH QUARTER BUSINESS DEVELOPMENT UPDATE
In December, the company and TARIS Biomedical LLC announced that the companies entered into a clinical trial collaboration to evaluate the safety, tolerability and preliminary efficacy of TARIS’ investigational product, TAR-200 (GemRIS), in combination with Opdivo in patients with Muscle Invasive Bladder Cancer who are scheduled for radical cystectomy.
In December, the company and Ono Pharmaceutical Co., Ltd. announced an agreement that grants Bristol-Myers Squibb an exclusive license for the development and commercialization of ONO-4578, Ono’s selective Prostaglandin E2 receptor 4 antagonist.
Adcetris is a trademark of Seattle Genetics, Inc.
GemRIS is a trademark of TARIS Biomedical LLC.
2018 FINANCIAL GUIDANCE
Bristol-Myers Squibb is setting its 2018 GAAP EPS guidance range at $3.00 to $3.15 and non-GAAP EPS guidance range at $3.15 to $3.30. Key 2018 GAAP and non-GAAP guidance assumptions include:
Worldwide revenues increasing in the low- to mid-single digits.
Gross margin as a percentage of revenue to be approximately 70% for both GAAP and non-GAAP.
Marketing, selling and administrative expenses decreasing in the low- to mid-single digit range for both GAAP and non-GAAP.
Research and development expenses decreasing in the low-double digits for GAAP and increasing in the high-single digits for non-GAAP.
An effective tax rate between 20% to 21% for both GAAP and non-GAAP.
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