Bristol-Myers Squibb Reports Second Quarter Financial Results

The FINANCIAL — Bristol-Myers Squibb Company on July 27 reported results for the second quarter of 2017 which were highlighted by strong sales for key products Opdivo and Eliquis and regulatory approvals for Opdivo, the Daklinza and Sunvepra regimen and Orencia.

“We had a strong quarter, particularly for Opdivo and Eliquis, and also advanced our portfolio with important clinical and regulatory milestones across multiple therapeutic areas,” said Giovanni Caforio, M.D., chairman and chief executive officer, Bristol-Myers Squibb. “Looking forward, I am excited by our opportunity to continue delivering across our portfolio, maintaining our focus on strong commercial performance and advancing our diversified pipeline.”

SECOND QUARTER FINANCIAL RESULTS

Bristol-Myers Squibb posted second quarter 2017 revenues of $5.1 billion, an increase of 6% compared to the same period a year ago. Revenues increased 7% when adjusted for foreign exchange impact.

U.S. revenues increased 7% to $2.9 billion in the quarter compared to the same period a year ago. International revenues increased 4%. When adjusted for foreign exchange impact, international revenues increased 7%.

Gross margin as a percentage of revenue decreased from 75.2% to 69.6% in the quarter primarily due to product mix and a $127 million impairment charge in connection with the expected sale of manufacturing operations in Swords, Ireland.

Marketing, selling and administrative expenses decreased 6% to $1.2 billion in the quarter.

Research and development expenses increased 31% to $1.7 billion in the quarter primarily due to license and asset acquisition charges of $393 million in the second quarter of 2017.

The effective tax rate was 28.8% in the quarter, compared to 26.4% in the second quarter last year.

The company reported net earnings attributable to Bristol-Myers Squibb of $916 million, or $0.56 per share, in the second quarter compared to net earnings of $1.2 billion, or $0.69 per share, for the same period in 2016.

The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.2 billion, or $0.74 per share, in the second quarter, compared to $1.2 billion, or $0.69 per share, for the same period in 2016. 

Cash, cash equivalents and marketable securities were $9.1 billion, with a net cash position of $868 million, as of June 30, 2017, according to Bristol-Myers Squibb.

Opdivo

Regulatory

In July, the U.S. Food and Drug Administration (FDA) accepted the company’s supplemental Biologics License Applications to update Opdivo dosing to include 480 mg infused over 30 minutes every four weeks for all currently approved monotherapy indications. The applications are under review with an action date of March 5, 2018.

In June, the company announced the European Commission (EC) approved Opdivo for the treatment of locally advanced unresectable or metastatic urothelial carcinoma in adults after failure of prior platinum-containing therapy.

In May, the company announced the FDA accepted a supplemental Biologics License Application to extend the use of Opdivo to patients with hepatocellular carcinoma (HCC) after prior sorafenib therapy. The FDA granted the application priority review and previously granted Opdivo orphan-drug designation for the treatment of HCC. The FDA action date is September 24, 2017.

In April, the company announced the EC approval of Opdivo as monotherapy for the treatment of squamous cell cancer of the head and neck in adults progressing on or after platinum-based therapy.

Clinical

In July, the company announced interim analysis of results from a Phase 3 study evaluating Opdivo versus Yervoy in patients with stage IIIb/c or stage IV melanoma who are at high risk of recurrence following complete surgical resection. More detail from study results is included in the original press release for this and other data announced in the second quarter. 

In June, at the 14th International Conference on Malignant Lymphoma, the company announced data and analysis from studies evaluating Opdivo monotherapy and Opdivo combination therapy:

CheckMate -205: Extended follow-up data from the Phase 2 study of Opdivo monotherapy in adult patients with relapsed or progressed classical Hodgkin lymphoma (cHL) after autologous stem cell transplant, irrespective of brentuximab vedotin therapy history. 

Updated interim analysis from the ongoing Phase 1/2 clinical study evaluating Seattle Genetics’ ADCETRIS (brentuximab vedotin) and Opdivo in relapsed or refractory cHL patients. 

In June, during ASCO in Chicago, the company announced results from five studies for Opdivo and the Opdivo + Yervoy regimen:

CheckMate -204: First presentation of efficacy data from the Phase 2 study to evaluate the Opdivo + Yervoy regimen in patients with melanoma metastatic to the brain. 

CheckMate -142: Interim data from the Phase 2 study evaluating Opdivo monotherapy or the Opdivo + Yervoy regimen in patients with DNA mismatch repair deficient or microsatellite instability-high metastatic colorectal cancer. 

CheckMate -358: First disclosure of data from the Phase 1/2 study evaluating Opdivo in patients with advanced cervical, vaginal and vulvar cancers, all associated with infection by the human papillomavirus (HPV). 

ECHO-204: Updated data from the Phase 1/2 study evaluating the safety and efficacy of Incyte Corporation’s investigational oral selective IDO1 enzyme inhibitor, epacadostat, in combination with Opdivo in multiple advanced solid tumors. 

IFCT-1501 MAPS-2: The first report of data evaluating the safety and efficacy of Opdivo or the Opdivo + Yervoy regimen for previously treated unresectable malignant pleural mesothelioma patients. 

Yervoy

Regulatory

In July, the company announced the FDA approved an expanded indication for Yervoy to include the treatment of unresectable or metastatic melanoma in pediatric patients.

Clinical

In June, at ASCO, the company presented results of an interim descriptive analysis from an ongoing National Cancer Institute Phase 3 study evaluating Yervoy 3 mg/kg and Yervoy 10 mg/kg in patients with stage III or resectable stage IV melanoma who are at high risk of recurrence following complete surgical resection. (link)

Empliciti

In June, at the annual Congress of the European Hematology Association, the company presented four-year follow-up data from the Phase 3 ELOQUENT-2 study evaluating Empliciti plus lenalidomide/dexamethasone versus lenalidomide/dexamethasone alone in patients with relapsed/refractory multiple myeloma. 

Sprycel

Regulatory

In July, the company announced the FDA accepted its supplemental New Drug Application to include an indication for Sprycel to treat children with Philadelphia chromosome-positive chronic phase (CP) chronic myeloid leukemia (CML), as well as a powder for oral suspension (PFOS) formulation of Sprycel. The application is under priority review with an action date of November 9, 2017.

In May, the company announced the European Medicines Agency (EMA) validated its grouped Type II variation/Extension of Application for Sprycel to treat children and adolescents aged one year to 18 years with CP-CML and to include the PFOS. Validation of the application confirms the submission is complete and begins the EMA’s centralized review process, according to Bristol-Myers Squibb.

Clinical

In June, at ASCO, the company presented data from the Phase 2 CA180-226 study evaluating Sprycel in imatinib-resistant or -intolerant and newly diagnosed pediatric patients with CP-CML.

Orencia

Regulatory

In July, the EC approved Orencia for the treatment of active Psoriatic Arthritis (PsA) in adult patients for whom the response to previous disease-modifying antirheumatic drug therapy, including methotrexate, has been inadequate, and additional systemic therapy for psoriatic skin lesions is not required.

In July, the company announced the FDA approved Orencia in intravenous and subcutaneous injection formulation for the treatment of adults with active PsA.

In June, the company announced the availability of a new FDA-approved subcutaneous Orencia administration option for use in patients two years of age and older with moderately to severely active polyarticular Juvenile Idiopathic Arthritis, providing the option of Orencia treatment that can be administered at home.

Clinical

In June, at the Annual European Congress of Rheumatology (EULAR 2017), the company presented 23 abstracts related to Orencia, including new data on the role of biomarkers and magnetic resonance imaging in rheumatoid arthritis patient identification and treatment. (link)

Daklinza

In April, the company announced the China Food and Drug Administration approved a direct-acting antiviral regimen comprised of Daklinza and Sunvepra, for the treatment of treatment-naive or -experienced patients, with or without compensated cirrhosis, infected with genotype 1b chronic hepatitis C virus (HCV). Daklinza was also approved in China for use in combination with other agents, including sofosbuvir, for adult patients with HCV genotypes 1-6.

Investigational Compound Highlights

Oncology

In June, during ASCO in Chicago, the company announced results from a study for the company’s anti-lymphocyte activation gene-3 (LAG-3) monoclonal antibody (BMS-986016):

CA224-020: Proof-of-Concept data from the Phase 1/2a study combining BMS-986016 with Opdivo in heavily pretreated advanced melanoma patients who were relapsed or refractory on anti-PD-1/PD-L1 therapy. (link)

SECOND QUARTER BUSINESS DEVELOPMENT UPDATE

In June, the company and SK Biotek Co., Ltd announced the signing of a definitive purchase agreement to sell Bristol-Myers Squibb’s manufacturing operations in Swords, Ireland, to SK Biotek, a wholly-owned subsidiary of SK Holdings, based in Seoul, South Korea. The companies intend to complete the deal by the fourth quarter of 2017.

In June, the company and Novartis announced a clinical research collaboration to investigate the safety, tolerability and efficacy of Opdivo and the Opdivo + Yervoy regimen in combination with Novartis’ Mekinist®, as a potential treatment option for metastatic colorectal cancer in patients with microsatellite stable tumors where the tumors are proficient in mismatch repair.

In June, the company and QIAGEN announced an agreement to explore the use of next-generation sequencing technology to develop gene expression profiles as predictive or prognostic tools for use with Bristol-Myers Squibb novel immuno-oncology therapies in cancer treatment.

In June, the company and Seattle Genetics, Inc. announced an expanded clinical collaboration agreement for a Phase 3 study to evaluate the combination of Opdivo and Seattle Genetics’ antibody-drug conjugate ADCETRIS® versus ADCETRIS® alone as a potential treatment option for patients with relapsed/refractory or transplant-ineligible advanced cHL.

In May, the company and Array BioPharma announced a clinical research collaboration to investigate the safety, tolerability and efficacy of Array’s investigational MEK inhibitor, binimetinib, in combination with Opdivo and the Opdivo + Yervoy regimen as a potential treatment for metastatic colorectal cancer in patients with microsatellite stable tumors.

In May, the company and Advaxis, Inc. announced a clinical development collaboration to evaluate Opdivo and Advaxis’ ADXS-DUAL, an investigational immunotherapy targeting HPV-associated cancers, as a potential combination treatment option for women with metastatic cervical cancer.

In May, the company and Calithera Biosciences, Inc. announced an expansion of their existing collaboration to evaluate Opdivo in combination with Calithera’s CB-839, an investigational orally administered glutaminase inhibitor, in patients with non-small cell lung cancer and melanoma.

ADCETRIS is a trademark of Seattle Genetics, Inc.

Mekinist is a trademark of Novartis.

2017 FINANCIAL GUIDANCE

Bristol-Myers Squibb is updating its 2017 GAAP EPS guidance range from $2.72 – $2.87 to $2.66 – $2.76 and raising the lower end of its non-GAAP EPS guidance range from $2.85 – $3.00 to $2.90 – $3.00. Both GAAP and non-GAAP guidance assume current exchange rates. Key revised 2017 GAAP and non-GAAP line-item guidance assumptions are:

An effective tax rate of approximately 23% for GAAP with non-GAAP remaining at approximately 21%.