10-KPeriod: FY2010

BRISTOL MYERS SQUIBB CO Annual Report, Year Ended Dec 31, 2010

Filed February 18, 2011For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb Company (BMY) reported strong performance in 2010, with net sales increasing by 4% to $19.5 billion, driven primarily by key products like PLAVIX, the HIV franchise, and ABILIFY, alongside new launches ONGLYZA and KOMBIGLYZE. The company also made significant advancements in its pipeline with drugs like YERVOY and ELIQUIS. However, the company faces significant upcoming challenges, most notably the expected loss of market exclusivity for PLAVIX in the U.S. in May 2012, which is projected to lead to a material decline in sales and cash flow. The company is actively managing costs through its Productivity Transformation Initiative (PTI) and focusing on strategic acquisitions and collaborations. Investors should closely monitor the impact of patent expirations, particularly for PLAVIX and AVAPRO/AVALIDE, and the company's ability to successfully bring its late-stage pipeline products to market.

Financial Highlights

59 data points
Beta

Revenue

$19.48B

72.9% Gross Margin

Net Income

$3.10B

15.9% Net Margin

EPS (Diluted)

$1.79

Total Assets

$31.08B

Cash & Equivalents

$5.03B

Free Cash Flow

$4.07B

Financial Statements
Beta
Revenue$19.48B
Cost of Revenue$5.28B
Gross Profit$14.21B
R&D Expenses$3.57B
SG&A Expenses$3.69B
Operating Expenses$13.41B
Operating Income$3.10B
Interest Expense$145.00M
Net Income$3.10B
EPS (Basic)$1.80
EPS (Diluted)$1.79
Shares Outstanding (Basic)1.71B
Shares Outstanding (Diluted)1.73B

Key Highlights

  • 1Net sales grew 4% to $19.5 billion in 2010, driven by key products like PLAVIX and ABILIFY, as well as the HIV franchise and ONGLYZA/KOMBIGLYZE.
  • 2Significant pipeline advancements were reported for YERVOY, ELIQUIS, and other promising compounds.
  • 3The company faces substantial upcoming challenges due to the expected loss of U.S. market exclusivity for PLAVIX in May 2012 and AVAPRO/AVALIDE in March 2012.
  • 4BMY completed the acquisition of ZymoGenetics in October 2010 as part of its 'string-of-pearls' acquisition and licensing strategy.
  • 5The company met its $2.5 billion Productivity Transformation Initiative (PTI) cost savings goal, reflecting a focus on operational efficiency.
  • 6BMY repurchased $576 million of its common stock in 2010, signaling a commitment to shareholder returns.
  • 7A voluntary recall of certain lots of AVALIDE* impacted sales and supply, highlighting manufacturing and supply chain risks.

Frequently Asked Questions

BMY's top-selling products in 2010 were PLAVIX ($6.7 billion in sales, representing 34% of total net sales) and ABILIFY ($2.6 billion in sales, 13% of total net sales). These two products were critical to the company's revenue and earnings. Other significant contributors included AVAPRO/AVALIDE, REYATAZ, and the SUSTIVA Franchise, each with over $1.1 billion in sales.

The most significant near-term risk is the loss of market exclusivity for key products. PLAVIX is expected to lose U.S. market exclusivity in May 2012, and AVAPRO/AVALIDE in March 2012. The company anticipates a "rapid, precipitous and material decline" in sales for PLAVIX following exclusivity loss. Additionally, BMY faces intense competition from generic products and pricing pressures from managed care organizations and government programs.

BMY is focused on a multi-pronged strategy: 1) Supporting and growing its currently marketed products, 2) Advancing its late-stage pipeline to bring new innovative products to market (e.g., YERVOY, ELIQUIS), 3) Managing costs through initiatives like the Productivity Transformation Initiative (PTI), and 4) Pursuing strategic acquisitions and licensing opportunities ('string-of-pearls') to strengthen its product portfolio.

BMY had several promising late-stage pipeline candidates in 2010. Key developments included advancements for YERVOY (ipilimumab) for melanoma, with regulatory submissions in the U.S. and EU; ELIQUIS (apixaban) for thrombosis and atrial fibrillation, with U.S. and EU submissions expected in 2011; and NULOJIX (belatacept) for transplant rejection, awaiting FDA approval. Dapagliflozin for diabetes also advanced with submissions in the U.S. and EU.